Tuesday, March 18, 2025
The Honorable Michael Crider
Indiana Senate Homeland Security & Transportation Committee
Indiana State Senate
200 W. Washington Street
Indianapolis, IN 46204-2785
Dear Chairman Crider and members of the committee,
Thank you for the opportunity to share our comments on H.B. 1461. We represent National Taxpayers Union, a nonprofit organization dedicated to advocating for lower taxes, responsible government spending, and economic policies that support hardworking Americans.
H.B. 1461 would allow counties to impose a new tax of up to $1 on every retail delivery. While this may sound like a small fee, in practice, it is a regressive tax that will add up quickly for Indiana’s workers, families, and businesses—many of whom are already struggling with rising costs.
A Costly Burden on Families, Especially in a Time of High Inflation
The last few years have been tough for working families. Groceries, gas, rent, and other everyday necessities have all become more expensive due to inflation. This bill would make it even harder for Hoosiers to make ends meet by increasing the cost of essential goods.
Many families rely on delivery services for groceries, prescriptions, household essentials, and even school supplies. This is especially true for busy parents, seniors with mobility challenges, and rural residents who don’t have easy access to stores. By adding up to a dollar to every order, this tax could cost the average family more than $50 a year—money that could instead go toward gas, utilities, or other essentials.
Indiana taxpayers should not be punished simply for choosing the convenience of delivery, a service that has become a necessity in the modern economy. Unlike luxury taxes that target non-essential spending, this particular tax would hit everyday necessities that families rely on to save time and money.
Harmful to Small Businesses and the Local Economy
H.B. 1461 would be particularly harmful to Indiana’s small businesses, which depend on deliveries to restock shelves, fulfill online orders, and compete with larger competitors. Small businesses already face high costs for shipping and logistics—this tax would only add to their burden, forcing them to either raise prices or absorb the cost themselves.
Unlike large corporations, many small businesses operate on thin margins. A delivery tax could push them to cut jobs, reduce hours, or pass higher costs onto consumers. This is bad for Indiana’s economy at a time when we should be supporting small business growth, not making it harder for them to compete.
Additionally, this tax could drive customers away from local businesses and toward big-box stores that can afford to absorb the cost. Rather than helping local economies, H.B. 1461 could hurt small, independent retailers already facing tough competition from national chains.
A Pay Cut for Delivery Workers
Delivery drivers—many of whom work for services like DoorDash, Instacart, or Amazon Flex—are some of the hardest-working people in our economy. They depend on a high volume of orders to make a living. This tax could lead to fewer deliveries, meaning less income for these workers.
If customers cut back on deliveries due to higher costs, drivers will feel the impact directly in the form of fewer orders and lower tips. At a time when gig workers are already dealing with fluctuating gas prices and vehicle maintenance costs, this bill would make it even harder for them to earn a stable income.
The Wrong Approach to Government Revenue
Rather than making life more expensive for Indiana families, we suggest lawmakers focus on responsible budgeting and spending reforms. Before imposing new taxes, the state should work even harder to identify areas where savings can be found.
Several other states have considered delivery taxes and ultimately abandoned them due to the negative consequences. Louisiana, Nebraska, and Maryland all dropped similar proposals last year after recognizing the burden they would place on taxpayers and businesses. In Minnesota, lawmakers were forced to add major exemptions before passing a version of the tax. Even in Colorado, where a delivery tax was enacted, there are now multiple efforts to repeal it because of its harmful effects.
Indiana should learn from these experiences and reject H.B. 1461 before it creates unnecessary financial strain on Hoosiers.
Conclusion
At its core, this bill would raise costs for everyday people, make it harder for small businesses to compete, and reduce income opportunities for delivery workers—all at a time when inflation has already taken a toll on household budgets. Indiana can do better than imposing new taxes on working families.
For these reasons, the National Taxpayers Union urges you to oppose H.B. 1461. Thank you for your time, and please contact us with any questions.
Sincerely,
Mattias Gugel
Director of State External Affairs
National Taxpayers Union
Leah Vukmir
Senior Vice President of State Affairs
National Taxpayers Union