Indiana Legislature recently proposed two bills aimed at exempting out-of-state buyers of recreational vehicles from paying state sales tax, even if their states don’t have a similar agreement in place.
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More than forty states currently have shared agreements with Indiana that exempt the seven percent state sales tax. Residents of the other nine states, which include Michigan, Florida and California, could potentially pay the tax, in addition to sales tax in their home state.
Republican state Senator Blake Doriot stated that a number of RV dealers have complained that they’ve lost a significant amount of business due to out-of-state buyers going elsewhere to avoid double taxation, which Doriot says will impact RV dealers as well as other industries in Elkhart County.
In the past, bills regarding the state sales tax have been proposed, but none have been considered. That’s in part because, as the Legislative Services Agencies’ fiscal analysis accompanying the bill states, it would “reduce sales tax revenue to the state by a potentially significant amount.” The agency estimates the state could lose a total of $2.6 million in revenue during the 2018 fiscal year and $2.8 million in 2019.
Ron Breymier, spokesman of the Indiana Manufactured Housing Association-Recreation Vehicle Indiana Council, argued that the analysis is limited and lacks a presentation of the actual impact that the changes to the sales tax system could have on the RV industry.
“The state is using 2012 Bureau of Motor Vehicle records to compile its stats and there is no sales data,” Breymier disputed. He added that the RV industry is armed with an abundance of information that he hopes can be used to sway hesitant lawmakers.
A recent study of the RV industry shows it has a $9.5 billion impact on the state’s economy and that it employs over 22,500 Indiana residents.
Breymier said the Legislative Service Agency has not accounted for the large number of RVs that are already sold out of state and aren’t required to pay Indiana sales tax.
According to Breymier, when the bill was initially introduced, all states were required to pay Indiana sales tax, but now that it has slowly faded away, leaving only nine, which Breymier says are critical states.
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