A local food and beverage tax rate in Indiana is typically “1% of the gross retail income received from taxable food and beverage transactions.” However, when both a county and a municipality located within that county have imposed a food and beverage tax, the rate is 2% in the municipality.
Localities that have adopted the tax food and beverage tax applies it whenever “food or beverage is furnished, prepared, or served by a retail merchant for consumption at a location or on equipment provided by the retail merchant….”
“For consumption at a location or on equipment provided by the retail merchant” is defined as:
- When food or drink is served by a retail merchant off the merchant’s premises;
- When food or drink is sold in a heated state or is heated by a retail merchant;
- When food or drink is made of two or more food ingredients,mixed or combined by a retail merchant for sale as a single item (other than food that is only cut, repackaged, or pasteurized by the seller and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal Food and Drug Administration); or
- Food sold with eating utensils provided by the retail merchant. Eating utensils include plates, cups, napkins and straws but not containers or packages used to transport food.
Catering activities are subject to the tax, as is food sold at deli counters in grocery stores.
Food that is only cut, repackaged or pasteurized by the seller is not subject to the food and beverages tax, nor are sales of eggs, fish, meat and poultry that require cooking by the consumer.
Like sales tax
The food and beverage tax is similar to a sales tax. It is “imposed, paid and collected in the same manner as the sales tax,” and food that is exempt from the state sales tax must also be exempt from the food and beverage tax. However, retailers must use different returns for sales tax and the food and beverage tax.
Johnson County, the outlier
All returns and remittances for the food and beverage tax should be filed with the Indiana Department of Revenue EXCEPT returns for Johnson County. In Johnson County, the food and beverage tax must be remitted to the county treasury.
A 1% food and beverage tax is imposed in the following counties:
- Allen County (since 1986);
- Boone County (since 2005);
- Delaware County (since 1986);
- Hamilton County (since 2005);
- Hancock County (since 2005);
- Hendricks County (since 2005);
- Henry County (since 1987);
- Johnson County (since 2005);
- Madison County (since 1989);
- Marion County (since 1981). The rate has been 2% since 2005;
- Monroe County (authorized in 2009 but not yet imposed);
- Shelby County (since 2005);
- Steuben County (authorized in 2008 but not yet imposed); and
- Vanderburgh County (since 1985).
The following table lists municipalities that impose a 1% municipal food and beverage tax. Note the two 2013 taxes.
|Locality||Effective Date||Combined Municipal and County Rate|
|Avon, Hendricks County||2005||2%|
|Brownsburg, Hendricks County||1995||2%|
|Carmel, Hamilton County||2005||2%|
|Cloverdale, Putnam County||September 2013||1%|
|Fishers, Hamilton County||Authorized July 2013, not yet imposed||1%|
|Lebanon, Boone County||2005||2%|
|Martinsville, Morgan County||2005||1%|
|Mooresville, Morgan County||1990||1%|
|Nashville, Brown County||1987||1%|
|Noblesville, Hamilton County||2005||2%|
|Plainfield, Hendricks County||1995||2%|
|Shipshwana, LaGrange County||1990||1%|
|Westfield, Hamilton County||2005||2%|
|Zionsville, Boone County||2005||2%|