Bill would exempt out-of-state RV buyers from sales tax

ELKHART, Ind. (AP) – A bill proposed in the Indiana Senate would exempt out-of-state recreational vehicle buyers from being double taxed.

Indiana currently has reciprocal agreements with 41 states that exempt out-of-state RV buyers from having to pay Indiana sales tax, with Indiana residents getting similar exemptions for purchases in those states. The proposed bill would exempt out-of-state RV purchasers regardless of whether their states have a reciprocal agreement.

The bill’s sponsor, state Sen. Carlin Yoder, R-Middlebury, told The Elkhart Truth that current sales tax law hurts dealers.

“Indiana has lost a lot of RV dealers because of the way we make customers pay double in sales tax,” Yoder said. “I hear continually from RV dealers about the issue, and I have made several attempts in the past to change things.”

Dave Titus, who owns International RV Wholesaler in Elkhart, said the issue over sales taxes costs him the price advantage he has over dealers outside of Indiana. He said it’s probably costing his business about $1 million in revenue annually.

“Since I deal here in Elkhart, where a lot of the RVs are produced, I can offer better deals, but that is all lost when you have to pay sales tax twice,” Titus said.

Matthew Troup, business manager of Total Value RV in Elkhart, said he hasn’t gotten many complaints from customers. He said typically if they come from a state with a higher sales tax, they get credit for the 7 percent sales tax paid in Indiana and would have to make up the difference.

A state Legislative Services Agency study says the proposal could “significantly reduce sales tax revenue to the state.” Yoder said that study doesn’t account for dealers driving outside of Indiana to close sales and avoid paying the Indiana sales tax.

The state Senate Committee on Tax and Fiscal Policy was scheduled to hear the RV bill Tuesday morning.