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 6395 NOTE PREPARED: Dec 22, 2023
BILL NUMBER: HB 1116 BILL AMENDED:
SUBJECT: Hammond Food and Beverage Tax.
FIRST AUTHOR: Rep. Jackson BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: The bill authorizes the city of Hammond to impose a food and beverage tax.
Effective Date: July 1, 2024.
Explanation of State Expenditures: The Hammond food and beverage tax would be collected and remitted
to the Department of State Revenue (DOR) in the same manner as the state Sales Tax. The DOR should be
able to implement the bill’s requirements within existing levels of staff and resources.
Explanation of State Revenues:
Explanation of Local Expenditures: The city of Hammond could potentially incur a one-time increase in
costs if it holds an additional public hearing to discuss a proposed ordinance to impose a food and beverage
tax.
If the city imposes a food and beverage tax, the city fiscal officer would establish a food and beverage tax
receipts fund, in which all revenue from the tax would be deposited. Money in this fund may only be used
for the following purposes:
• Development related to the Northern Indiana Commuter Transportation District's construction of the
West Lake Corridor Commuter Rail Project.
• Development in the city's downtown area.
• Expansion and improvement of the Hammond Sportsplex and Community Center.
• Expansion and improvement of the Pavilion at Wolf Lake Memorial Park.
HB 1116 1 • The pledge of money for bonds, leases, or other obligations incurred for a purpose listed above.
Explanation of Local Revenues: The bill authorizes the city of Hammond to impose a food and beverage
tax at a rate not to exceed 1% of gross retail income from food and beverage transactions in the city. If the
city adopts an ordinance to impose the tax in July 2024, the tax could go into effect as early as September
1, 2024. The following table shows the estimated potential revenue for CY 2024 through CY 2026.
Estimated Potential Hammond Food and Beverage Tax Revenue, 1%
CY 2024 CY 2025 CY 2026
$242,000 $975,000 $984,000
These estimates are based on sales data for the food services industry in Lake County, as published in the
2017 Economic Census, and actual revenue of counties that currently collect food and beverage taxes. A
portion of the county total was allocated to Hammond based on the city’s estimated share of the food and
beverage industry in the county. The Hammond food and beverage tax expires on July 1, 2047.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: City of Hammond.
Information Sources: : U.S. Census Bureau; 2017 Economic Census. Legislative Services Agency, Indiana
Handbook of Taxes, Revenues, and Appropriations, FY 2023. OFMA Quarterly Census of Employment and
Wages Data.
Fiscal Analyst: Qian Li, 317-232-9671.
HB 1116 2