Politics
Marion County Sales Tax Referendum: Effects on Indianapolis Household Spending
A November ballot measure in Marion County proposes raising the local sales tax by half a percentage point to fund roads and transit, which would increase costs for typical Indianapolis households on everyday purchases.
How we reported this
Voters across Marion County will decide in November on a ballot measure that would increase the local sales tax rate from 7 percent to 7.5 percent beginning in 2027, a change that applies to most retail purchases made by Indianapolis residents.
The measure arrives amid ongoing pressure on household budgets from higher prices for food, fuel and housing in central Indiana, where local governments have cited rising maintenance costs for infrastructure as a reason for seeking additional revenue through the referendum.
Daily Costs for Indianapolis Residents
Under the proposal, residents buying groceries, clothing and household items would pay the higher rate at checkout, with the added revenue directed toward road repairs and expanded bus routes in the city. A household with $700 in monthly taxable spending would face roughly $42 more per year in sales tax, based on figures from the Marion County auditor's office.
Local advocates note that the tax applies uniformly across the county, including in neighborhoods such as Broad Ripple and the Near Eastside, where many residents already allocate significant portions of income to transportation and basic goods. The legislation states that exemptions remain in place for prescription drugs and unprepared food items.
Budget Figures and Next Steps
The Marion County 2026 budget document lists current sales tax collections at approximately $380 million annually, with the proposed increase projected by county officials to generate an additional $27 million each year for specified projects. The government says the policy will support pavement resurfacing on 150 miles of local streets over the next decade.
Ballots will be mailed to registered voters starting in mid-October, with in-person early voting available at the City-County Building from October 20 through November 2. Results are scheduled to be certified by the Marion County Election Board by November 18.