Senate committee advances amendment to tighten oversight and add sunset for local food and beverage taxes; dozens of communities seek authority to raise inn‑tax

A Senate committee on a bill tied to the Department of Local Government Finance (DLGF) on Monday advanced an amendment that would require new reporting and place a statewide sunset on many local food and beverage and innkeeper taxes, and it heard testimony from more than a dozen counties and towns seeking permission to adopt or increase such levies.

The measure under consideration would (1) give some towns explicit authority to adopt their own food and beverage or innkeeper taxes in specified circumstances, (2) require the Indiana State Board of Accounts to annually confirm that localities have submitted required spending reports and that proceeds were spent according to statute, and (3) subject many local levies to a sunset of Dec. 31, 2026, except where taxes are pledged to pay outstanding bonds. The committee adopted the sunset language by consent after a motion by Senator Baldwin.

Why it matters: county and municipal leaders said the taxes are a critical local revenue tool for tourism, downtown redevelopment and, in some cases, to pay for services strained by visitors — while several senators said the state needs stronger transparency and tools to address localities that do not follow statutory spending limits.

The committee hearing opened with Senator Eric Gaskell presenting “amendment 13,” which he described as giving the town of Ellettsville the authority to implement its own food and beverage tax if it chooses and asking for stronger oversight. "Amendment 13 simply gives the town of Ellettsville the authority if they choose to implement their own food and beverage tax," Senator Gaskell said. Gaskell also told the panel the amendment would require annual findings from the State Board of Accounts on whether localities filed reports and spent proceeds according to statute.

Several colleagues pressed for stronger remedies if a locality fails to comply. Senator Shana Mishler (transcript: "Mischner/Mischler" in parts of the record) proposed…