State Files Suit Over Sales Tax Law

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Indiana Attorney General Curtis Hill. Indiana Attorney General Curtis Hill.

Indiana Attorney General Curtis Hill has filed a lawsuit asking a court to uphold a bill recently passed by the Indiana General Assembly. House Enrolled Act 1129 requires out-of-state businesses to collect and remit sales and use taxes, just as Indiana-based businesses are required to do.

The lawsuit was filed at the request of Governor Eric Holcomb and on the behalf of the Indiana Department of Revenue. Holcomb's office says the bill was enacted and signed into law "with full awareness" of a 1992 United States Supreme Court ruling that out-of-state retailers were not required to collect and remit sales and use taxes.

Holcomb says the bill was designed to "level the playing field" between Hoosier businesses and those who conduct business in Indiana through online sales.

"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," Holcomb said in a news release. “Hoosier-based businesses need the ability to compete on a level playing field as soon as possible."

The bill was passed with a provision allowing the state to file a lawsuit challenging the 1992 ruling. Per the terms of the bill, the state will not be allowed to enforce the collection of sales and use taxes from out-of-state retailers while the lawsuit is pending.

The lawsuit also calls for the court to act "expeditiously." You can read the lawsuit below:

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