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Johnson County council votes 6–1 to have Indiana collect local food and beverage tax
Summary
After an hour of debate over lost interest, vendor convenience and local control, the Johnson County Council approved an ordinance to transfer collection of the county's 1% food and beverage tax to the Indiana Department of Revenue; Treasurer Kim Hamilton said the county's software is at end of life and the state can improve compliance.
Johnson County Treasurer Kim Hamilton recommended that the council amend county ordinance so the Indiana Department of Revenue will collect the county's 1% food and beverage tax, saying the county's current software is no longer supported and that vendors and tax professionals have asked for an online, state‑run process.
"The existing software contains glitches, and one of our biggest issues coming up is we are unable to print the 2027 vouchers that need to be sent out to all of the vendors," Hamilton told the council. She said the county's $150,000 vendor software effort failed to produce a supported system and that other vendor solutions quoted development costs of more than $1 million.
Hamilton said shifting collection to the state will cost Johnson County the modest amount of interest it now earns on county deposits — she estimated the county would lose "just a little over $5,000" in interest — but that the change should increase compliance and make it easier for roughly 600 vendors to pay online.
"If they were to pay this at the state level, they could pay it on their INtime account where they pay their sales tax," Hamilton said, describing outreach the treasurer's office will provide during the 60–120 day transition window. She said penalties would be forwarded to the county and that the treasurer's office would continue to monitor vendor payments during and after the change.
County Commissioner Ron West urged caution. West recounted the county's long history collecting the tax and warned that moving collection to the state could reduce local oversight of receipts and the interest float the county accrues. "We're the only county that does that," West said, arguing the county has used the collection as a barometer and watchdog to find errors and recover money. He noted past disputes with the state over refunds and said he "highly question[s]" whether the state will pass through penalties and other amounts exactly as the county expects.
Council members asked whether the change could be reversed; Hamilton and other officials said the council could revert to county collection by passing another ordinance, but several members noted reversal would be administratively difficult. Supporters said the state's system has built‑in validation, reduces manual voucher work, and will make it easier for food trucks and younger business owners that do not use checks.
"It will be a one‑stop shop for any food and beverage merchant in Johnson County," the chair said during discussion.
After extended discussion and questions about transition steps and monitoring, Council member John Dittmers moved to approve the ordinance shifting collection to the Department of Revenue; Council member Jonathan T. Myers seconded. The council voted 6 in favor and 1 opposed; the motion passed.
The council agreed the treasurer's office will send vendor notices and help businesses sign up for the state system and that the county will continue to monitor collections after the change.
