Wednesday, July 30, 2014

On Internet sales tax and Subaru’s Hoosier roots

Posted on May 14, 2013 at 1:00 a.m. | Updated on May 14, 2013 at 6:10 p.m.

Recent editorials from Indiana newspapers:

The Muncie Star Press:

Online shopping for many users might become more expensive in the not-too-distant future, as Congress takes up the issue of charging sales taxes for purchases made over the Internet.

That’s good for states and municipalities facing dwindling tax revenue and a growing demand for services.

It also levels the playing field for businesses that have a presence online vs. the more traditional stores that exist along Main Street.

This week, the Senate voted 69-27 to make online purchases subject to state sales taxes. Indiana Sen. Dan Coats-R, and Sen. Joe Donnelly-D, voted for the bill, which pundits predict will face a tougher time in the House.

A Supreme Court ruling issued in 1992 allows states to charge a sales tax if an online retailer has a physical presence in the state. That’s why your iTunes purchase includes a sales tax since Apple has a store in the Indianapolis area.

The move could result in about $77 million more in the state’s coffers, according to figures provided by the Indiana Fiscal Policy Institute. That infusion of cash would help offset falling revenue as the state’s ubiquitous casinos and racinos now face competition from other states.

More importantly, the bill removes a price advantage large online retailers have enjoyed, to the detriment of smaller businesses. Some retailers complain the existing tax structure has turned them into showrooms where shoppers browse, then go home to buy the same item online without paying a sales tax. The National Conference of State Legislators says states lost $23 billion last year.

Businesses with less than $1 million in online sales would be exempt from the bill. EBay wants to raise that to $10 million in sales or fewer than 50 employees.

One hurdle for smaller online retailers is how to collect sales taxes for 45 states and several cities, totaling an estimated 9,000 sets of requirements. The bill requires states to provide retailers with software to figure their taxes. It’s a challenge, but technology can be deployed to overcome it.

And in doing so, Indiana, other states, plus the overall retail industry will benefit. This is not a new tax, as some groups charge. It’s simply collecting what is rightfully owed. Congress should pass this bill and level the playing field for everyone.

Lafayette Journal & Courier:

Not since the days of Jim Riehle, the former Lafayette mayor who worked overtime to help bring a Japanese auto plant to Tippecanoe County 25 years ago, have there been as many domo arigato shoutouts.

Gov. Mike Pence gave his Wednesday, offering the Japanese version of “thank you very much” from a podium where officials laid out details of a $400 million expansion of the Subaru of Indiana Automotive Inc. plant on Indiana 38.

After thanking Subaru officials publicly for making the investment — one that promises 900 new jobs at the Lafayette plant — the governor wrapped up the morning with something appropriately succinct: “Great day for Subaru. Great day for Indiana.”

Great day for Lafayette, too.

Subaru, coming off a long run of record monthly and annual sales, has been tipping to the need to increase capacity for some time. Earlier this year, Lafayette Mayor Tony Roswarski fed that speculation with a state of the city speech that mentioned a possible $200 million expansion at the Subaru plant.

Turns out Roswarski was correct by exactly half.

“This really is a game changer for the community,” Roswarski said Wednesday. “A $400 million investment. Nine hundred jobs. The potential collateral jobs to be created from that in our entire region really can help, again, amplify our advanced manufacturing presence in the world.”

The plan is to start building Subaru’s Impreza models at the plant in 2016. The SIA plant pumped out 271,583 cars — Subaru’s Outback, Legacy and Tribeca models, along with Toyota Camry models — in a fiscal year that ended March 31. The plan is to build production room for an additional 100,000 vehicles.

With news like that, giving thanks — in whatever language — was pretty easy.