State To List Businesses Behind On Taxes

INDIANAPOLIS -- The Indiana Department of Revenue is going public in hopes of spurring businesses to make good on unpaid sales tax.

Beginning on Jan. 1, 2010, the agency will post a list online of businesses that have not remitted their sales tax to the state, 6News' Kara Kenney reported.

Businesses that collect the tax from consumers are required to give it to the state, which then uses it to provide vital services and programs. The state currently has $107 million in uncollected sales tax revenue.

"For the most part, they’re delinquent. They didn’t pay their sales tax," said spokeswoman Stephanie McFarland.

Officials said hope making the list public will inform consumers, and give businesses an incentive to do the right thing.

"They have reputations. Their names are going to be on a list. Consumers are going to see it, and other members of the public are going to see it," McFarland said.

Indiana collects $6 billion a year in sales tax. Combined with income tax, that's about 75 percent of the state's entire budget, according to the Department of Revenue.

The Attorney General’s Office, which regularly takes legal action against tax evaders, said collecting sales tax revenue could help the state's financial situation.

"The state needs the money, and these businesses aren't paying their taxes," said spokesman Andrew Swain. "It's important we go after them."

The office has filed criminal charges against sales tax evaders including a businessman they claim sold stereos and didn't pay $823,000 in sales tax.

"It sends the wrong message to people that pay their taxes to not go after the ones that don't," Swain said.

Kristin Kohn, the owner of Silver in the City on Massachusetts Avenue, said agrees with the state's decision to post delinquent businesses online.

"I hope it collects more taxes so our state has more money. We're collecting it as a tax, and we should pay it back to the state as a tax. It's not our money," she said.

The Department of Revenue will launch the list on its Web site in January, and will updated it once a month.