Indiana Lawsuit Results in Suspension of Sales Tax Collection Statute

We’re excited to report an important positive development in the Hoosier state. Earlier this week, in response to a Complaint we filed with our TruST partner association NetChoice, the Indiana Department of Revenue acknowledged that it has no authority under current law to enforce its new “economic presence” nexus statute (House Enrolled Act 1129). This litigation challenging the law’s constitutionality is now pending in state Superior Court in Indianapolis.

Under the new law, which went into effect on July 1, 2017, retailers with more than $100,000 in Indiana sales or 200 transactions annually with Indiana customers would be required to collect and remit Indiana sales tax. Before the law took effect, in late June Brann & Isaacson filed suit on our behalf alleging that the statute violates the long-standing physical presence “substantial nexus” requirement for state sales taxes under Quill Corp. v. North Dakota.

In a court filing this past Monday answering the ACMA/NetChoice Complaint and also initiating a declaratory judgment action against the internet retailers Wayfair and Overstock.com, the Indiana DOR informed the Superior Court that the Department, during the pendency of the litigation, will not enforce the new law’s sales/use tax collection and remittance requirements against out-of-state retailers that do not voluntarily register to collect the tax.

More Funding = More Victories
This is a prime example of how with sufficient funding we can continue to beat back these rogue state efforts to illegally rewrite the Quill sales tax precedent. But the battles continue. Other states, such as Washington, Rhode Island and Massachusetts, continue to introduce rules like the one in Indiana and tattle-tale laws like the one in Colorado. We are looking out for the greater catalog/e-commerce industry’s best interests here, so please step up and get your peers to do the same.

Click here to make your donation today to help continue keeping catalog marketing free from the potential nightmare of collecting sales taxes in states in which you have no physical presence.
© 2017 American Catalog Mailers Association, Inc. Please share this important news with others in the catalog and e-commerce industries..

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