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 7156 NOTE PREPARED: Dec 30, 2020
BILL NUMBER: HB 1257 BILL AMENDED:
SUBJECT: Merrillville Food and Beverage Tax.
FIRST AUTHOR: Rep. Smith V BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill authorizes the town of Merrillville to impose a food and beverage tax.
Effective Date: July 1, 2021.
Explanation of State Expenditures: The Merrillville 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 town of Merrillville 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 town imposes a food and beverage tax, the town 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:
• Property tax levy reduction.
• Infrastructure improvements necessary to support tourism.
• Finance, construct, improve, equip, operate, maintain, and promote a convention center, and then
other economic development projects.
• Finance, construct, improve, equip, operate, maintain, and promote a community center, and then
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 other economic development projects.
• The pledge of money for bonds, leases, or other obligations incurred for a purpose listed above.
Explanation of Local Revenues: The bill authorizes the town of Merrillville to levy a food and beverage
tax at a rate not to exceed 1% of gross retail income from food and beverage transactions in the town. The
tax could go into effect as early as September 1, 2021, in which case Merrillville 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 Merrillville Food and Beverage Tax Revenue, 1%
CY 2021 CY 2022 CY 2023
$419,900 $1,601,900 $1,668,000
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 Merrillville based
on the town’s estimated share of the food and beverage industry in the county.
State Agencies Affected: Department of State Revenue.
Local Agencies Affected: Town of Merrillville.
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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