The Indiana Association of Cities and Towns said this week it would begin lobbying state lawmakers for new municipal taxing authority.
The group, which represents 470 cities and towns across the state, said it wants the Indiana General Assembly to pass a law allowing municipalities to adopt local-option income taxes as well as a food and beverage tax of up to 1%.
The new tax revenue is needed to help offset ongoing declines in property tax revenue, according to the association. Along with counties, Indiana’s cities, towns, and other local governments are facing sometimes deep declines in property tax revenue stemming from a state law that caps property tax bills at 1% for residential properties, 2% for rentals, and 3% for commercial properties.
As part of the law, the legislature allowed counties to impose a local income tax, but not other local governments. Lawmakers are expected to consider the proposal when the new session starts in January.