Inside INdiana Business

Fort Wayne, Allen County councils rebuke mayor’s call for tax increase

(photo courtesy of the National Restaurant Association)

FORT WAYNE, Ind. (Inside INdiana Business) — Officials from the Fort Wayne City Council and Allen County Council have introduced a joint resolution against any potential legislation that would allow city governments to raise the food and beverage tax. The resolution comes less than a week after Fort Wayne Mayor Tom Henry announced he would push for such a law in order to raise the county’s food and beverage tax by one cent.

Council officials called Henry’s lobbying efforts for the legislation “premature” and said his administration “does not have the support of the local fiscal body required to pass it.” 

“This tax proposal directly targets and industry that is already facing incredible challenges,” Fort Wayne City Councilor Tom Didier said. “Putting this kind of threat over their heads would cripple these establishments we as a community have worked so hard to support over the last year.”

Henry’s office says raising the county’s food and beverage tax by one cent would generate an estimated $6 million in additional annual revenue that would be use for future development projects.

The mayor said if such legislation would be passed by the Indiana General Assembly, he would not put his plan into effect until after it is determined that the city’s restaurant industry has fully recovered from the economic impact of the pandemic.

Meanwhile, state Sen. Travis Holdman, a Republican from Markle and the chair of the Senate Tax and Fiscal Policy Committee, said Wednesday the committee will not hear any bills related to increasing local food and beverage taxes during this legislative session.

“According to an industry survey, about one in five Indiana restaurants has permanently closed since the start of the pandemic, making it more critical now than ever to support Indiana’s restaurants,” Holdman said. “I know that there are some localities that may not like this decision, but we firmly believe that a tax increase on our restaurants is simply not appropriate at this time.”

The Fort Wayne City Council says if the resolution passes, it will be the first significant joint resolution by the two councils in the last decade.