SB238 allows Jefferson, Elkhart, and Knox Counties to increase their innkeeper’s tax rates to 8%. For Jefferson and Elkhart Counties, this is an increase from 5%, and for Knox County, it’s an increase from 6%. The innkeeper’s tax applies to accommodations rented for less than 30 days, also known as short-term rentals.
The Indiana State Senate passed SB238 on March 8, 2024 by a vote of 41 to 7. We have assigned pluses to the nays because expanding government authority through increased taxation grows the size of government. This bill is anti-free market as it disrupts the natural competition in the hospitality industry, where lower taxes could lead to lower prices and increased demand. Additionally, the bill violates the Constitution, particularly the Fifth and Fourteenth Amendments’ protection against arbitrary government interference with property rights.