INDIANAPOLIS (AP) - Indiana has filed a
lawsuit in defense of a new law that would allow the state to collect sales
tax from out-of-state businesses.
The law, which took effect July 1,
requires businesses that sell at least $100,000 in the state annually or
have 200 separate transactions to collect sales tax, even if they don't have
a physical presence in the state.
Gov. Eric Holcomb said Monday that he
wants the U.S. Supreme Court to overturn its 1992 ruling that said
out-of-state retailers don't have to collect and remit sales tax if they
don't have a physical presence in the state. He said the court needs to
revisit the ruling because of online sales growth and improvements in
software and technology.
Attorney General Curtis Hill filed the
lawsuit in Marion County Superior Court on behalf of the state Department of
Revenue. It's been filed against Boston-based home goods retailer Wayfair
Inc. and Utah-based closeout retailer Overstock.com Inc.
The lawsuit is in response to another
lawsuit the American Catalog Mailers Association and NetChoice filed in June
challenging the state's new sales tax law and its implementation. It aims to
level the playing field between Indiana businesses and out-of-state
businesses that sell products online.
More than 40 percent of the state's $18
billion revenue came from sales taxes in 2016. E-commerce sales rose by
almost 15 percent between 2016 and 2017, while retail increased by just over
5 percent, according to the U.S. Department of Commerce.
An Indiana Fiscal Policy Institute and
Ball State University study estimates the state lost around $77 million in
2012 because it couldn't collect online sales taxes.
The Indiana sales-tax law is similar to a
law put forth in South Dakota, which could reach the U.S. Supreme Court.