Bill requiring Amazon to collect sales taxes passes committee

INDIANAPOLIS (WISH) - Amazon.com and other online retailers will have to start collecting Indiana sales taxes this year under a bill that advanced in the Indiana House of Representatives Thursday. 

It's a victory for retail stores and also an attempt to undo an agreement made by former governor Mitch Daniels.

Under the previous agreement Amazon agreed to start collecting Indiana sales taxes on purchases made in 2014.  The bill passed on a 20-to-1 vote by the House Ways and Means committee calls for tax collections to start on July 1, 2013. 

"It only has to do with them doing the same thing that other businesses in the state of Indiana do," said Rep. Dan Leonard (R-Huntington,) "and that's to collect sales taxes when they sell something in the state of Indiana."

Then-governor Mitch Daniels made the deal with Amazon two years ago to begin tax collections in 2014.  At the time Daniels called it the best deal in the country.  In the time since, four states have made better deals. 

"The governor really didn't have the authority to do that," says Rep. Ed DeLaney (D-Indianapolis.)  "The matter of tax collections should not be a matter of quiet agreements between any one governor and any business."

Lawmakers say that acting now is a fairness issue. 

"Internet retailers have a 7 percent advantage over stores that pay taxes and employ Hoosiers," says Grant Monahan of the Indiana Retail Council.

But there's another factor, too.  Lawmakers are looking for new ways to bring in tax money. 

"Back to school in the fall, the holiday season at the end of the year, it was time to do it now," says Rep. Tom Dermody (R-LaPorte.)  "There's no reason to wait."

The Amazon tax bill now goes to full House for a vote.