Indiana lawmakers have introduced House Bill 1427, a significant piece of legislation aimed at establishing a new tax on short-term lodging rentals across the state. Introduced on April 16, 2025, the bill proposes a tax of up to 5% on gross retail income derived from renting rooms or accommodations for periods of less than 30 days in hotels, motels, inns, and similar establishments. Notably, the bill exempts campsites within state or federal parks and forests from this tax.

The primary goal of House Bill 1427 is to generate additional revenue for local governments, which could be crucial for funding community services and infrastructure. The bill allows county councils to adopt ordinances requiring monthly tax payments to the county treasurer, ensuring a steady flow of income. If no ordinance is adopted, the tax will be collected in alignment with existing state gross retail tax procedures.

Debate surrounding the bill has been lively, with proponents arguing that it will provide much-needed financial support to local governments, especially in tourist-heavy areas. Critics, however, express concerns that the tax could deter tourism and negatively impact small businesses that rely on short-term rentals. The potential economic implications are significant, as local economies often depend on the hospitality sector.

House Bill 1427 is set to take effect on July 1, 2025, and will remain in force until January 1, 2047, unless further legislative action is taken. As discussions continue, stakeholders are closely monitoring the bill's progress, recognizing its potential to reshape the landscape of short-term rentals in Indiana. The outcome of this legislation could have lasting effects on both local economies and the tourism industry, making it a pivotal moment for lawmakers and community members alike.