Google Earth time-lapse of Carmel between 1984-2020
Google Earth time-lapse of Carmel between 1984-2020
Google Earth, Indianapolis Star
A new hotel and conference center district is in the works in Carmel, and city officials are hoping to levy a new tax on lodging to support public infrastructure for the district.
The city is sharing few details about the plans and has not revealed where it’s planned for or how many new hotels would be included in the district.
The legislation that would allow Carmel, as well as the City of New Haven in Allen County, to impose an innkeeper’s tax at a flat rate of up to $5 per night is facing opposition from statewide tourism organizations.
Currently, lodging taxes in Indiana are only levied at the county level and no Indiana cities have their own innkeeper’s tax.
Carmel Mayor Sue Finkam, during a Senate Tax and Fiscal Policy Committee hearing on Jan. 13, told lawmakers that the innkeeper’s tax would be a tool for Carmel to reinvest visitor spending directly into the city’s visitor economy.
Finkam said the district is projected to drive nearly $1 billion in investment.
“The local innkeeper’s tax authorized by this bill would allow Carmel to help finance the public facilities and infrastructure needed to make that growth possible,” Finkam told the lawmakers.
An independent market analysis shows Carmel can support a significant conference center and meeting space, particularly for mid-sized conventions, corporate meetings, community events and large weddings, Finkam said.
She added that the project would complement and not compete with the Indiana Convention Center in downtown Indianapolis.
“The goal is simple,” Finkam said. “Attract more visitors, create more room nights, and generate more business for hotels, restaurants and hospitality employers throughout Central Indiana.”
Hamilton County already has a lodging tax
Hamilton County already has an 8% innkeeper’s tax that applies to all rentals that are booked for less than 30 days throughout the county. That means someone who books one night in a hotel in Carmel for $150 would pay an additional $10.50 for the state sales tax, $12 for the countywide innkeeper’s tax and up to $5 for the would-be city innkeeper’s tax.
Sen. Travis Holdman, R-Markle, the bill’s author, asked Finkam why Carmel would need to have its own innkeeper’s tax on top of the county tax.
“One of the purposes (of Carmel’s innkeeper tax listed in the bill) would be to promote and encourage conventions, visitors, and tourism within the city,” Holdman said. “Is that not the function of the county-wide organization (Hamilton County Tourism)?”
Finkam said some of the language from the bill could be tweaked so that dollars from the would-be Carmel innkeeper’s tax are dedicated to infrastructure development, such as infrastructure to support the new hotel and conference center district.
But 3% of the dollars collected as part of the existing countywide innkeeper’s tax are already slated for tourism capital improvement projects. Those dollars are distributed by the Hamilton County Visitor and Convention Commission, which includes appointees from the county commission and council and mayoral appointees from the leaders of Carmel, Fishers, Westfield and Noblesville.
“Under the current county innkeeper’s tax structure, however, Carmel does not have a local, dedicated revenue stream tied to that activity, and our role in the governance of those dollars has become very limited over time,” Finkam said.
She pointed out that nearly half of the hotel rooms in Hamilton County are located in Carmel, and that city invests heavily in attractions, like the Carmel Christkindlmarkt, that bring in tourists.
“Rather than shifting or reallocating existing county revenue, the bill allows Carmel to generate a small, dedicated local funding stream to help build the infrastructure that drives more room nights across the region,” Finkam said.
But Patrick Tamm, president and CEO of the Indiana Restaurant and Lodging Association, said his organization opposes the bill, citing the already high costs of taxes and fees travelers pay for lodging. And, it could open the door for other cities to ask to implement their own innkeeper’s tax, he said.
“If we throw this on top, we are concerned what it may do to our current business, let alone our future business,” said Tamm, who is also president of the Westfield City Council in Hamilton County.
Jim Epperson, advocacy chair for the Indiana Tourism Association, said his organization also opposes the bill.
“The legislation would upend Indiana’s longstanding uniform innkeeper’s tax law, which has been a county function,” said Epperson, who is also the executive director of the Clark-Floyd Counties Convention Tourism Bureau.
Sen. Scott Baldwin, R-Noblesville, whose district includes part of Carmel, said there’s work still to be done on the legislation. Senate Bill 242 is expected to be discussed once again in the Senate Tax and Fiscal Policy Committee on Jan. 20.
“My goal is to allow cities to have a revenue stream upon which they can count and against which they can bond, to build things that are accretive,” Baldwin said. “Currently, that’s not in place in Hamilton County.”
Contact Jake Allen at [email protected]. Follow him on X, formerly Twitter, @Jake_Allen19.
