State Files Lawsuit to Level the Sales-Tax Playing Field Between Hoosier-Based and Out-of-State Businesses

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Today at Indiana Governor Eric J. Holcomb’s request,  Attorney General Curtis Hill filed a lawsuit on behalf of Indiana’s Department of Revenue asking a court to find House Enrolled Act 1129 (Ind. Code § 6-2.5-2-1) constitutional. The new law, which became effective July 1, 2017, seeks to level the playing field between Hoosier-based businesses and those outside our state that do business here through online sales. HEA 1129 requires these out-of-state businesses to collect and remit the same sales/use taxes as Hoosier-based businesses.

The Indiana General Assembly enacted HEA 1129, and Gov. Holcomb signed it into law, with full awareness that the United States Supreme Court ruled in 1992 that out-of-state retailers need not collect and remit sales/use taxes.

“In light of the rapid evolution and capabilities of software and technology, the incredible growth of online sales in recent years and other factors, it’s time for the Supreme Court to revisit and overturn this ruling,” Gov. Holcomb said. “Hoosier-based businesses need the ability to compete on a level playing field as soon as possible.”

The legislature included, and the state’s lawsuit relies upon, a provision in HEA 1129 that allows Indiana to put into motion a legal process to challenge the 1992 Supreme Court ruling.  HEA 1129 also calls for the court(s) to act “expeditiously.”

The full lawsuit is attached.

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