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News & Press: Government Affairs

WIBC: Local Governments Seek More Leeway to Impose Food and Beverage Taxes

Friday, October 9, 2015  
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Eric Berman I WIBC

 Legislators are debating whether local governments should have blanket authority to impose food and beverage taxes.

When cities and counties want to tax restaurant meals to raise money for a special project, they have to get legislative approval. Angola Mayor Richard Hickman says especially with property tax caps and the abolition of the inventory tax, cash-strapped local governments shouldn't need permission to find a new source of money.

Restaurant and Lodging Association president Patrick Tamm says it's one thing to use restaurants to finance projects like Lucas Oil Stadium, which bring in additional business. But he argues letting cities use restaurant checks for operating expenses will damage restaurant profits.

Senate Tax and Fiscal Policy Chairman Brandt Hershman (R-Buck Creek) questions whether a blanket food-and-beverage taxing authority would create an issue of taxation without representation, since Hoosiers driving to a restaurant in another county would be paying a tax imposed by officials they couldn't vote for. But he also challenged Tamm's predictions of economic harm -- he notes a two-percent tax on a 30-dollar tab would add just 60 cents to the bill.

13 counties and six cities and towns tack on an extra restaurant tax on top of sales tax.

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