LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7007 NOTE PREPARED: Jan 1, 2025
BILL NUMBER: SB 304 BILL AMENDED:
SUBJECT: Marion Food and Beverage Tax.
FIRST AUTHOR: Sen. Zay BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill authorizes the city of Marion to impose a food and beverage tax of not
more than 1% of the gross retail income received from a taxable transaction.
Effective Date: July 1, 2025.
Explanation of State Expenditures: The 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 Marion 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:
•Reducing the city's property tax levy for a particular year at the discretion of the city.
•Economic development, including the pledge of money under IC 5-1-14-4 for bonds, leases, or other
obligations.
•Park and recreation purposes, including the purchase of land for park and recreation purposes and the
pledge of money under IC 5-1-14-4 for bonds, leases, or other obligations.
•Construction, renovation, improvement, equipping, or maintenance of city capital improvements,
including the pledge of money under IC 5-1-14-4 for bonds, leases, or other obligations.
Explanation of Local Revenues: The bill authorizes the city of Marion 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 could go into effect as early as September 1,
2025. The following table shows the estimated potential revenue for CY 2025 through CY 2027.
SB 304 1 Estimated Potential City of Marion Food and Beverage Tax Revenue, 1%
CY 2025 CY 2026 CY 2027
$210,000 $846,000 $859,000
These estimates are based on sales data for the food services industry in Grant 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 the city of Marion based on the city's estimated share of the food
and beverage industry in the county. The Marion food and beverage tax expires on July 1, 2048.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: City of Marion.
Information Sources:
Fiscal Analyst: Abdulrahman Abdulkadri, 317-232-9852.
SB 304 2