Bills would exempt out-of-state RV buyers from Indiana sales tax

New camping trailers are lined up at Camping World RV Sales in North Little Rock, Ark., Tuesday, Dec. 2, 2014. Recreational vehicle industry leaders point to pent-up consumer demand, low interest rates, available credit and an improved economy for putting RV makers and dealers who survived the hard times back on the road to sustained growth. (AP Photo/Danny Johnston)

INDIANAPOLIS Ind. (WISH) – The 2017 legislative session is well underway, and supporters of a pair of bills making their way through the Statehouse say the legislation would benefit one of Indiana’s largest manufacturing industries: recreational vehicles.

Two bills, one moving through the House and the other though the Senate, are essentially identical. The proposals would exempt out-of-state RV buyers from having to pay state sales tax, even if their states don’t have a “reciprocal agreement” in place.

People living outside the state currently have to pay double the sales tax if they want to buy an RV from an Indiana dealer. That makes the vehicles more expensive, and critics say it discourages people from spending their money in Indiana. We talked to Jerry Smith from Colerain RV on the south side of Indianapolis. He supports the plan and says eliminating the “double sales tax” would benefit the RV industry as a whole.

“The bulk of the RVs — about 75 percent of the RVs — are built in the northern part of the Indiana, so we’re getting business from just about all 50 states,” Smith said.

He said the Indiana RV business may have lost 5 to 8 percent as a result of the double sales tax.

Smith estimates he could have hired someone else for his store just from the revenue he lost last year. 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 local residents. According to the Recreational Vehicle Industry Association, more than 60 percent of recreation vehicles are made in Elkhart Country.

House Bill 1045 is moving through the Ways and means committee while Senate Bill 172 has been referred to the Senate Committee on Tax and Fiscal Policy.

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