Sales tax hike looms

There's more than one tax deadline for Hoosiers this spring.

There's the traditional April 15 deadline to file your tax return, but there's also an April 1 deadline. That's when Indiana's sales tax will increase 1 percent to 7 percent under the state's property tax relief and reform plan that Gov. Mitch Daniels signed into law last week.

Indiana will take over about $3 billion of costs that were previously on local property tax rolls. It's financing those costs with revenue raised by increasing the sales tax from 6 percent to 7 percent, existing gaming revenue and redirecting existing state sales tax money currently used to subsidize local spending.

Several local businesses have seen a recent increase in sales because of the upcoming sales tax increase.

Don Luecke of Luecke, Audio, Video and Appliance in Seymour said people have mentioned they were buying their items now before the tax goes up.

"There have been a number of people moving up their purchase now rather than after the sales tax increase," Luecke said Tuesday. "Especially when people are buying multiple appliances or high-definition televisions."

Ray Gilbert was shopping for a new dishwasher Tuesday afternoon at Luecke's on West Tipton Street. He said the sales tax didn't effect his decision for buying a dishwasher, but it did influence him to buy a new car.

"We had thought about buying a car and somebody showed us the figures, and we said, ‘Whoa.' We bought it," Gilbert said. "I would say larger purchases would influence people."

Also seeing an increase in sales is Bob Poynter GM Cars and Trucks in Seymour.

J.D. Roberts, general manager, said they are having a "beat the tax man sale" in an effort to move out its inventory by the end of the month.

"We have seen tons of trade-ins, and the new car business has really picked up," Roberts said. "I think it's pushed a lot of people over the edge to go ahead and buy so they don't have to pay the extra sales tax."

Bowman Automotive General Manager Jimmy Adkinson said Tuesday he's not heard that first looker trying to beat the tax deadline, but he expects that to change as more people become aware of the increase.

How much could a consumer save buying a van this week rather than April 1?

"If you buy a van for $28,000, the tax would be $1,680 at 6 percent and $1,960 at 7 percent," Adkinson said. "You could save $280 by buying Saturday versus Tuesday."

Jay Deckard of Deckard Auto Sales, Seymour, agreed with Adkinson that some people will buy large items this week to beat the tax increase, but he doesn't think it will be much of an impact.

Deckard's more concerned with the tax increase coming at a time when many consumers are already worried as the national media beat the drum of a gloomy economy.

"We don't need that extra increase in cost," Deckard said of the third sales tax increase he's seen since starting his used car business in 1982.

"If anything, it's going to be a long-term hurt, but it affects new cars more than used cars," he added.

While business is booming for some, others haven't seen much of a change.

Heather Henson, manager of Stuckwisch Appliances in Brownstown, said business has been slower, but she attributed that to Brownstown Central Community Schools being on spring break this week.

"I've not really noticed anything right off," Henson said. "This is our slow period."