County enacts new lodging tax rates for residents and tourists

Indiana House Bill 1427, introduced on April 24, 2025, aims to implement a new lodging tax across various counties in Indiana, targeting accommodations such as hotels, motels, and tourist cabins. This legislation seeks to generate additional revenue for local governments while addressing the growing demand for funding in community services and infrastructure.

The bill proposes a tiered tax structure, allowing counties to impose a lodging tax of up to 5% in most areas, with specific counties like Howard, Daviess, and Parke allowed to charge higher rates of 8% or 9% based on their unique circumstances. Notably, the tax will not apply to students renting accommodations in university residence halls or to long-term rentals exceeding 30 days, ensuring that the legislation does not burden those in educational programs or long-term housing situations.

Debate surrounding House Bill 1427 has highlighted concerns from local business owners and tourism advocates, who argue that increased lodging taxes could deter visitors and negatively impact the hospitality industry. Proponents, however, emphasize the necessity of additional funding for local projects and services, arguing that the tax could enhance community amenities that benefit both residents and tourists.

The economic implications of this bill are significant. By generating new revenue streams, local governments could invest in infrastructure improvements, public safety, and community services, potentially leading to enhanced quality of life for residents. However, the balance between generating revenue and maintaining a competitive tourism sector remains a critical point of contention.

As House Bill 1427 moves through the legislative process, stakeholders are closely monitoring its progress. The outcome could reshape the financial landscape for Indiana counties, influencing how local governments fund essential services and manage tourism in the coming years.