Amazon, Indiana strike state sales tax deal

Amazon and Indiana Governor Mitch Daniels unveiled an agreement that may mean that the world's largest Internet retailer starts collecting sales tax in the state in 2014.

Amazon will voluntarily begin collecting Indiana sales tax on Internet purchases on Jan 1, 2014, or 90 days from any federal online sales tax legislation that may pass before that time, according to a statement from Daniels' office. Online retailers without a physical presence in a state do not have to collect sales tax on purchases by those residents. As e-commerce ballooned in recent years, that exemption came under pressure from several states looking to fill big budget gaps. Brick and mortar retailers have been pushing hard behind the scenes to get Amazon to collect sales tax. Some traditional retailers argue Amazon has an unfair price advantage because it does not collect the tax in many states, although Amazon has said customers shop with it for other reasons, such as wide product selection and availability.