LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6735 NOTE PREPARED: Dec 21, 2020
BILL NUMBER: HB 1105 BILL AMENDED:
SUBJECT: Hobart Food and Beverage Tax.
FIRST AUTHOR: Rep. Olthoff BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill authorizes the city of Hobart to impose a food and beverage tax.
Effective Date: July 1, 2021.
Explanation of State Expenditures: The Hobart food and beverage tax would be collected and remitted to
the Department of State Revenue (DOR) in the same manner as the state Sales Tax. The DOR should be able
to implement the bill’s requirements within existing levels of staff and resources.
Explanation of State Revenues:
Explanation of Local Expenditures: The city of Hobart could potentially incur a one-time increase in costs
if it holds an additional public hearing to discuss a proposed ordinance to impose a food and beverage tax.
If the city imposes a food and beverage tax, the city fiscal officer would establish a Food and Beverage Tax
Receipts Fund, in which all revenue from the tax would be deposited. Money in this fund may only be used
for the following purposes:
• Economic development.
• Capital improvements.
• Parks and recreation.
• The pledge of money for bonds, leases, or other obligations incurred for a purpose listed above.
Explanation of Local Revenues: The bill authorizes the city of Hobart to levy a food and beverage tax at
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a rate not to exceed 1% of gross retail income from food and beverage transactions in the city. The tax could
go into effect as early as September 1, 2021, in which case Hobart could receive three months of revenue in
CY 2021 and a full year of revenue beginning in CY 2022. The following table shows the estimated potential
revenue for CY 2021 through CY 2023.
Estimated Potential Hobart Food and Beverage Tax Revenue, 1%
CY 2021 CY 2022 CY 2023
$219,100 $836,100 $870,600
These estimates are based on sales data for the food services industry in Lake County, as published in the
2017 Economic Census. LSA adjusted the Economic Census data based on actual revenue of counties that
currently collect food and beverage taxes. A portion of the county total was allocated to Hobart based on the
city’s estimated share of the food and beverage industry in the county.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: City of Hobart.
Information Sources: U.S. Census Bureau; 2017 Economic Census; IHS Markit; Legislative Services
Agency, Indiana Handbook of Taxes, Revenues, and Appropriations, FY 2020; OFMA ES-202 Data.
Fiscal Analyst: Seth Payton, 317-233-3546.
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