If you live out-of-state and want to buy a recreational vehicle in Indiana, sales tax questions will pop up during the financing process, according to a report by the Elkhart Truth.
Currently, 41 states have reciprocal agreements with Indiana that exempt out-of-state RV buyers from having to pay the 7% Indiana sales tax, with Indiana residents receiving a similar exemption for purchases in those states.
If you live in the other nine states — Michigan, Florida, California, Arizona, Hawaii, Massachusetts, Mississippi, North Carolina and South Carolina — there is the potential you could be double taxed. That means customers from one of those states could pay Indiana’s 7% sales tax at the time of purchase only to turn around and have to pay sales tax in their home state as well.
Two proposed bills at the Indiana Statehouse — Senate Bill 172 and House Bill 1045 — hope to eliminate that extra tax burden by exempting out-of-state RV purchasers from having to pay Indiana sales tax, regardless of whether their states have a reciprocal agreement in place.
Sen. Blake Doriot, a Republican from New Paris, introduced SB 172 because he has heard from numerous dealers who say they have lost significant business due to out-of-state buyers going elsewhere to avoid double taxation. He says the loss of out-of-state buyers not only impacts RV dealers, but also other industries in Elkhart County.
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