House Bill 1427, introduced in Indiana on April 16, 2025, seeks to establish a town food and beverage tax aimed at generating revenue for community and economic development projects. The proposed legislation allows towns to impose a tax rate of up to 1% on gross retail income from food and beverage transactions, with the tax collected in a manner similar to the state gross retail tax.

Key provisions of the bill include the stipulation that the tax must be imposed in increments of 0.25% and that it will not apply to transactions exempt from the state gross retail tax. The funds generated from this tax will be deposited into a dedicated food and beverage tax receipts fund, which can only be used for specific purposes outlined in the Wayne County Strategic Plan, excluding infrastructure projects.

The bill has sparked discussions among lawmakers regarding its potential impact on local businesses and the community. Proponents argue that the tax could provide essential funding for development initiatives that enhance local economies. However, opponents express concerns about the additional financial burden on consumers and the potential negative effects on the hospitality industry, which has been recovering from the impacts of the COVID-19 pandemic.

As the bill progresses through the legislative process, its implications could be significant for towns looking to boost economic development while balancing the interests of local businesses and residents. The outcome of House Bill 1427 will be closely monitored, as it may set a precedent for similar tax initiatives across the state.