LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6407 NOTE PREPARED: Feb 4, 2025
BILL NUMBER: HB 1080 BILL AMENDED: Jan 30, 2025
SUBJECT: Innkeeper's and Food and Beverage Taxes.
FIRST AUTHOR: Rep. Mayfield BILL STATUS: As Passed House
FIRST SPONSOR: Sen. Holdman
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: Monroe County Food and Beverage Tax: This bill provides that the fiscal body
of the town of Ellettsville may, not later than December 31, 2025, adopt an ordinance to receive revenue
collected from the food and beverage tax. The bill specifies the distribution of revenue and provides that the
ordinance must specify that the town's collection of the revenue terminates not later than July 1, 2027.
LaGrange County Innkeeper’s Tax: This bill authorizes LaGrange County to impose an innkeeper's tax to
replace the innkeeper's tax the county currently imposes under the uniform innkeeper's tax law. It allows a
maximum tax rate of 8%.
Shelbyville Food and Beverage Tax: This bill allows the city of Shelbyville to impose a food and beverage
tax.
Brown County Innkeeper’s Tax: This bill allows Brown County to impose its innkeeper's tax at a rate that
does not exceed 8% (instead of 5% under current law) under its enabling statute.
Vanderburgh County Innkeeper’s Tax: This bill reallocates the amounts of revenue received from the
Vanderburgh County innkeeper's tax to be deposited in the convention and visitor promotion fund, the
tourism capital improvement fund, and the convention center operating, capital improvement, and financial
incentive fund.
Delaware County Innkeeper’s Tax: This bill authorizes Delaware County to increase the county's innkeeper's
tax rate from 5% to not more than 8% under the uniform innkeeper's tax statute.
Effective Date: Upon passage; July 1, 2025.
Explanation of State Expenditures: Shelbyville Food and Beverage Tax: The city of Shelbyville food and
beverage tax would be collected and remitted to the Department of State Revenue (DOR) in the same
manner as Sales Tax. The DOR should be able to implement the bill's requirements within existing levels
of staff and resources.
HB 1080 1 Explanation of State Revenues:
Explanation of Local Expenditures: Monroe County Food and Beverage Tax: If the town of Ellettsville
adopts an ordinance to receive food and beverage tax revenue, the fiscal officer of the town would establish
a food and beverage tax receipts fund. Money in this fund may only be used for transit related purposes.
Shelbyville Food and Beverage Tax: The city of Shelbyville 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 purposes outlined in the bill.
Explanation of Local Revenues: Monroe County Food and Beverage Tax: The bill provides that the town
of Ellettsville may adopt an ordinance by December 31, 2025, to receive a share of the Monroe County food
and beverage tax revenue that is collected in the town. The town’s share would equal 50% of the revenue
collected outside the city of Bloomington. The town could receive an estimated $245,000 in CY 2026 and
$124,000 in CY 2027. A smaller amount could also be distributed to Ellettsville in CY 2025, depending on
when the ordinance is adopted. The town's collection of revenue would terminate not later than July 1, 2027.
These estimates are based on actual revenue from the Monroe County food and beverage tax and the city of
Bloomington’s share of the generated revenue.
LaGrange County Innkeeper’s Tax: This bill allows LaGrange County to increase the rate of the tax from
5% to 8% beginning July 1, 2025. The table below shows the estimated revenue increase for CY 2025
through CY 2027 with the tax rate change, assuming the county adopts an ordinance to increase the tax rate
on or before July 15, 2025. Actual revenues may be lower than the estimated amounts listed to the extent that
consumer demand for lodging is reduced due to the price increase from the tax.
LaGrange County Innkeeper’s Tax Estimated Revenue Increase
CY 2025 CY 2026 CY 2027
$109,000 $664,000 $677,000
LaGrange County collected about $1.06 M in innkeeper's tax revenue in CY 2023. Under current law,
LaGrange County innkeeper's tax revenue funds the county's convention, visitor, and tourism promotion
fund.
Shelbyville Food and Beverage Tax: The bill authorizes the city of Shelbyville 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 2025, the tax would be effective in September 2025, and
collections would likely begin in October 2025. The Shelbyville food and beverage tax expires on July 1,
2047. The following table shows the estimated potential revenue for CY 2025 through CY 2027.
Estimated Potential City of Shelbyville Food and Beverage Tax Revenue, 1%
HB 1080 2 CY 2025 CY 2026 CY 2027
$226,000 $893,000 $889,000
These estimates are based on employment data for the food services industry in Shelby County, as reported
in the 2023 Quarterly Census of Employment and Wages, and data from counties that currently impose food
and beverage taxes. A portion of the county total was allocated to Shelbyville based on the city's estimated
share of the food and beverage industry in the county.
Brown County Innkeeper’s Tax: This bill allows Brown County to increase the rate of the tax from 5% to
8% beginning July 1, 2025. The table below shows the estimated revenue increase for CY 2025 through CY
2027, assuming the tax rate is increased to 8% effective July 1, 2025. Actual revenues may be lower than the
estimated amounts listed to the extent that consumer demand for lodging is reduced due to the price increase
from the tax.
Brown County Innkeeper’s Tax Estimated Revenue Increase
CY 2025 CY 2026 CY 2027
$558,000 $1,102,000 $1,094,000
Brown County collected about $1.66 M in innkeeper's tax revenue in CY 2023. Under current law, Brown
County innkeeper's tax revenue is deposited in the county's convention and visitors fund.
Vanderburgh County Innkeeper’s Tax: The bill changes the distribution of Vanderburgh County innkeeper’s
tax revenue beginning in CY 2026. Compared to current law, the bill increases the amount that will be
distributed to the convention and visitor promotion fund and the convention center operating, capital
improvement, and financial incentive fund and decreases the distribution to the tourism capital improvement
fund. The overall innkeeper's tax rate will remain the same at 8%.
Under current law, the distribution of Vanderburgh County innkeeper's tax revenue to the tourism capital
improvement fund and the convention center operating, capital improvement, and financial incentive fund
will change in CY 2026, with the tourism capital improvement fund receiving a share increase from a 3.5%
rate to a 4.5% rate, while the convention center operating, capital improvement, and financial incentive fund
would have a revenue share decrease from 2% to 1%.
This bill provides that beginning in CY 2026, the convention and visitor promotion fund share will increase
from 2.5% to 3%. The tourism capital improvement fund share will decrease from 3.5% to 3% in CY 2026
and an increase to 4% beginning in CY 2029. The convention center operating, capital improvement, and
financial incentive fund will remain at 2% in CY 2026 and decrease to 1% in CY 2029.
[In CY 2023, Vanderburgh County received $6.39 M in innkeeper's tax revenues.]
Delaware County Innkeeper’s Tax: This bill allows Delaware County to increase the rate of the tax from 5%
to 8% beginning July 1, 2025. The table below shows the estimated revenue increase for CY 2025 through
CY 2027, assuming the tax rate is increased to 8% effective July 1, 2025. Actual revenues may be lower than
the estimated amounts listed to the extent that consumer demand for lodging is reduced due to the price
increase from the tax.
HB 1080 3 Delaware County Innkeeper’s Tax Estimated Revenue Increase
CY 2025 CY 2026 CY 2027
$362,000 $730,000 $742,000
Delaware County collected about $1.20 M in innkeeper's tax revenue in CY 2023. Under current law,
Delaware County innkeeper's tax revenue is deposited in the county's convention and visitors fund.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: Town of Ellettsville, Monroe County, LaGrange County, City of Shelbyville,
Vanderburgh County, Delaware County.
Information Sources: Legislative Services Agency, Indiana Handbook of Taxes, Revenues, and
Appropriations, FY 2024. Quarterly Census of Employment and Wages Data.
Fiscal Analyst: Abdulrahman Abdulkadri, 317-232-9852.
HB 1080 4