The Food and Beverage Tax is a funding mechanism available to some Indiana Counties to collect a tax on transactions in which food or beverages are furnished, prepared, or served by a retail merchant for consumption at a location or on equipment provided by a retail merchant for consideration (payment). This includes food sold in a heated state or heated by the retail merchant or if two or more food ingredients are mixed or combined by a retail merchant for sales as a single item. It also includes food or beverages served by a retail merchant off the merchant’s premises.

FAB is available to some Indiana Counties individually by state statute. If the tax is imposed, “…the county fiscal officer shall establish an economic development project fund…” (IC 6-9-26-11) and those funds collected “shall be used solely to: (1) finance, construct, improve, equip, operate, maintain, and promote first, a civic center, and then an economic development project, if there is money not needed for a civic center…” (IC 6-9-26-12). Each participating municipality may utilize these funds as defined above. However, each municipality must follow the method, purpose, process, and use of these funds as defined in Indiana Code for their respective community.  

Madison County Rate = 1% 
These funds are limited for an “Economic Development Project” and must “…(A) attract new business enterprises to the county or retain or expand existing business enterprises in the county, (B) benefit the public health and welfare and be of public utility and benefit, (C) protect and increase state and local tax bases or revenues, and (D) result in a substantial increase and permanent employment opportunities and private sector investment within the county.” (IC 6-9-26-12)

Delaware County Rate = 1%
The funds collected may only be used by the Civic Center Authority to “…finance, construct, improve, equip, operate, maintain, and promote the use of a civic center or to renovate, equip, operate, maintain, and promote the use of any existing structure that may be used as a civic center.” (IC 6-9-21-9)

Fifty percent (50%) of the revenues received and up to five million dollars ($5,000,000) is distributed to the Capital Improvement Board for disbursement. The revenues may be used for any purpose permitted under IC 6-9-3.5-24, including the pledge of County Tax Revenues to the payment of bonds, leases, or other obligations in accordance with IC 5-1-14-4. (Hancock County Ordinance 2005-6B)