LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6928 NOTE PREPARED: Jan 5, 2022
BILL NUMBER: SB 390 BILL AMENDED:
SUBJECT: Food and Beverage and Innkeeper's Taxes.
FIRST AUTHOR: Sen. Gaskill BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: The bill requires each local unit that imposes an innkeeper's tax or food and
beverage tax to annually report information concerning distributions and expenditures of amounts received
from the innkeeper's tax or food and beverage tax. It also allows property owners or registered voters residing
within a local unit that imposes an innkeeper's tax or a food and beverage tax to petition the Department of
Local Government Finance (DLGF) if the person believes that the fiscal body of the local unit or other entity
is not using the innkeeper's tax or food and beverage tax revenue as statutorily authorized. The bill requires
the DLGF to make a final determination on a petition within 30 days. It specifies the consequences if the
DLGF determines that a local unit or other entity used innkeeper's taxes or food and beverage taxes for a
purpose that is not consistent with the statutorily authorized uses.
The bill provides that food and beverage taxes currently authorized under IC 6-9 and that do not otherwise
contain an expiration date shall expire on the later of: (1) January 1, 2029; or (2) the date on which all bonds
or lease agreements outstanding on July 1, 2022, are completely paid.
The bill requires each local unit that imposes a food and beverage tax that is subject to the expiration
provision to provide to the DLGF a list of each bond or lease agreement outstanding on July 1, 2022, and the
date on which each will be completely paid. It requires the DLGF to publish the information on the gateway
Internet web site.
The bill declares the intention of the General Assembly to only authorize local units to impose new food and
beverage taxes based on specified criteria.
Effective Date: Upon passage; July 1, 2022.
SB 390 1 Explanation of State Expenditures: Department of Local Government Finance (DLGF): The bill requires
the DLGF to review petitions from property owners and registered voters residing within local units that
impose an innkeeper’s tax or a food and beverage tax. The bill also requires the DLGF to prescribe a format
and form for local units to report certain information regarding an innkeeper’s tax or a food and beverage
tax and post those reports on the gateway portal.
There would be a short-term workload increase with the requirement of prescribing a format and form for
local units to report required information regarding the innkeeper’s tax or food and beverage tax. A long-term
workload increase would be dependent upon the number of petitions filed by property owners and registered
voters. The workload increase would likely be completed with existing staff and resources.
Explanation of State Revenues:
Explanation of Local Expenditures: Distributions and Expenditures Reporting: Each local unit that
imposes a food and beverage tax must report certain information to the DLGF. The report must be in the
format prescribed by the DLGF.
Public Hearing Provision: A local unit may need to hold additional public hearings on the imposition a new
food and beverage tax in the community before adopting the resolution to request General Assembly
authorization. Under this bill, the General Assembly should give preference to requests from local units in
which the fiscal body has held a series of public hearings on the imposition of a new food and beverage tax
in the community.
Explanation of Local Revenues: Local Petition Provision: The bill authorizes property owners or registered
voters residing within a local unit that imposes the innkeeper’s tax or a food and beverage tax to file a
petition with the DLGF if they believe the tax is being used for purposes that are not consistent with the
statute.
Depending on determinations made by the DLGF, there could be a decrease in revenues for local units
currently imposing an innkeeper’s tax or a food and beverage tax. The bill provides that local units must stop
collecting the innkeeper’s tax or food and beverage tax if the DLGF determines that the tax has been used
for purposes that are not consistent with authorizing statute. Upon the same determination, the innkeeper’s
tax or food and beverage tax will be deemed expired and the local unit may not be reauthorized to impose
the tax.
Expiration Provision: Under this bill, local units must submit a report to the DLGF providing certain
information regarding bonds or lease agreements and expiration dates in the prescribed format. The bill
specifies an expiration date for all local units with an existing food and beverage tax.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Counties and municipalities.
Information Sources:
SB 390 2 Fiscal Analyst: Seth Payton, 317- 233-3546.
SB 390 3