Senate Bill 131 – Sales Tax on Recreational Vehicles
Authored by Sen. Blake Doriot (R-Syracuse)
Removes the expiration of the provision in current law that provides that the sales tax rate on certain cargo trailers or recreational vehicles is the rate of the other state or other country in which the cargo trailer or recreational vehicle will be titled or registered under certain circumstances. (This provision was set to expire on June 30, 2019.) Amends the provision to apply only to sales that are made to a resident of a nonreciprocal state or a foreign country. Repeals the provision that authorizes the Department of Revenue to enter into reciprocal agreements with other states concerning a sales tax exemption for cargo trailers and recreational vehicles that will be purchased in a state by a nonresident and then titled in another state.
Chamber Position: Support
The Latest: The House Ways and Means Committee heard testimony and is holding the bill for possible amendment.
Chamber Action/Commentary: The Legislature has struggled with this issue for several years now. The objective is to determine the most desirable policy and procedures regarding the collection of sales tax when an out-of-state resident buys a recreational vehicle in Indiana with the intent to register it in their home state.
Complexities associated with collecting Indiana sales tax when the buyer is from a state that we do not have reciprocal collection agreements with has made Indiana a much less desirable state in which to locate as an RV sales dealer. So even though Indiana is the nation’s RV manufacturing capital, we don’t serve in the logical role as a retail sales hub as well – because non-residents don’t want to deal with the sales tax hassles. The Chamber has supported numerous past legislative efforts to rectify this situation. This week our testimony focused on: “We manufacture this huge percentage of RVs here, we ought to be selling a volume of them here too.” Our state laws need to establish an environment for Hoosier RV dealerships to thrive in the backyard of the manufacturers, instead of letting neighboring states do so.
Senate Bill 322 – Marketplace Facilitators
Authored by Sen. Travis Holdman (R-Fort Wayne)
Provides that a marketplace facilitator is required to collect and remit state sales tax as a retail merchant when it facilitates a retail transaction for sellers on the marketplace facilitator’s marketplace. Specifies circumstances in which a marketplace facilitator or a seller would not be required to collect and remit the state sales tax on the retail sale. Retains provisions that go into effect on July 1, 2019, for state sales tax collection and remittance requirements of a person or marketplace facilitator that facilitates a retail transaction for sellers that rent or furnish rooms, lodgings or accommodations in Indiana. Repeals the definition of facilitator that is set to go into effect on July 1, 2019.
Chamber Position: Support
The Latest: Heard by the House Ways and Means Committee, but no vote yet.
Chamber Action/Commentary: The Chamber once again testified in support of this bill, which provides a reasonable approach to addressing the administrative and compliance issues that exist now that online sales are subject to tax following the U.S. Supreme Court decision in Wayfair v. South Dakota in May 2018. Under the new scheme of things, states across the country are obligating those who operate internet platforms to bring buyers and sellers together, referred to as “marketplace facilitators,” to collect the associated sales tax from the buyers at the point of the online transaction. This is a sensible and convenient mechanism to collect the tax. However, the bill has reignited what has been an issue since well before the Wayfair decision – whether sales tax should be applied to the fee paid to online hotel booking platforms. This debate is now dominating and overshadowing the primary purpose of the marketplace facilitators bill. The Chamber is not weighing in on this ancillary issue.
Resource: Bill Waltz at (317) 264-6887 or email: [email protected]