Legislation that would change a law enacted last year charging Indiana sales tax to out-of-state residents purchasing recreational vehicle in Indiana cleared a Senate committee Tuesday (Feb. 8).
According to a report in the South Bend Tribune, the bill is a compromise between old Indiana law, which exempted out-of-state sales from any Indiana tax, and current law that taxes all RV purchases at the current 6% rate.
The RV industry had lobbied for a return to the complete sales tax exemption for RVs that are bought here but titled and registered in another state. That exemption, which retailers had enjoyed for years, helped make Indiana a retail center for RVs and not just a manufacturing center.
But lawmakers eliminated the exemption last year as they sought additional revenues to support the sagging state budget. The result, according to the industry, was a 40% drop in sales of new RVs in two of the last four months.
Aircraft, boat and automobile dealers complained about similar effects after losing the same tax exemption, but the bill that cleared committee only addresses RV sales.