ELKHART — Gov. Eric Holcomb, with one stroke of his pen, may have opened a path for Elkhart County to become once again a major player in the sale of recreational vehicles, according to local officials.
Holcomb signed Senate Bill 172 into law on Thursday, which will save out-of-state RV buyers from nine states thousands-of-dollars when it comes time to pay sales tax. Before this law, 41 states had reciprocal agreements with Indiana that exempt out-of-state RV buyers from having to pay the 7 percent Indiana sales tax, with Indiana residents receiving a similar exemption for purchases in those states.
If you lived in the other nine states — Michigan, Florida, California, Arizona, Hawaii, Massachusetts, Mississippi, North Carolina and South Carolina — there was the potential you could be double taxed. That means customers from one of those states could pay Indiana’s 7 percent sales tax at the time of purchase and then be required to pay sales tax in their home state as well.
That all changed on Thursday.
S.B. 172 will enact a two-year trial period from June 30, 2017, to July 1, 2019, that will enable the state's Department of State Revenue to work out reciprocal agreements with the nine states that do not currently have them in place. While that is being accomplished, the state will only collect the amount of sales tax equal to the state in which the RV or cargo trailer is being registered.