Bill > HB1142

This bill creates a uniform food and beverage tax authorization framework for cities and counties in Indiana that are not already authorized to impose such a tax under existing laws. The bill establishes a detailed process for implementing a local food and beverage tax, with several key provisions: local governments can impose up to a 1% tax in 0.25% increments on prepared food and beverage transactions, the tax must be approved through a multi-step public hearing process, and the revenue can only be used for specific capital improvements that promote economic development, such as fairgrounds, convention centers, or infrastructure projects. The tax cannot be used for operating expenses and is collected similarly to the state gross retail tax. Each local government must establish a dedicated uniform food and beverage tax fund, and the tax is limited to 22 years or can be rescinded earlier by the local fiscal body. The bill includes protections for bondholders by ensuring the tax rate remains sufficient to cover outstanding obligations, and it explicitly prevents the Department of Local Government Finance from reducing property tax levies because of this new revenue source. The legislation applies separately to cities and counties, providing a standardized approach for implementing local food and beverage taxes across Indiana.

Budget and Finance

https://iga.in.gov/legislative/2026/bills/house/1142/details