Indianapolis's Hotels & Lodging: The Rules That Matter

Every city handles hotels & lodging a little differently. In Indianapolis, Indiana, there are 2 distinct rules that residents and property owners should be aware of. Some are stricter than what neighboring cities enforce, and others are more relaxed. Here is what you need to know.

Transient Occupancy Tax

Indianapolis hotels collect a 10% Marion County Innkeeper's Tax under IC 6-9-8 plus 6% Indiana sales tax for a 16% effective rate. Revenue funds the Capital Improvement Board, which operates Lucas Oil Stadium, Gainbridge Fieldhouse, and the Indiana Convention Center.

Key details: County tax rate: 10%. State sales tax: 6%. Total guest pays: 16%. State law: IC 6-9-8. Revenue use: CIB sports/convention venues.

Hotel operators failing to register, collect, or remit the 10% county innkeeper's tax plus 6% state sales tax. Indiana DOR penalties include interest, late-filing fees, and tax-warrant collection.

Hotel Worker Retention

Indianapolis has not adopted a hotel worker retention ordinance. Unlike Los Angeles or Long Beach, Indianapolis hotels purchased or rebranded do not face local mandates to keep prior staff. Indiana state preemption of employment scheduling under IC 22-2-16 limits future local action.

Key details: Local ordinance: None. Preemption statute: IC 22-2-16. Min wage preemption: IC 22-2-2-10.5. CBA coverage: UNITE HERE Local 23. Federal backstop: WARN Act 60-day notice.

There is no ordinance to violate. Hotel sales and rebrands proceed without local retention obligations. Workers depend on collective-bargaining agreements or federal WARN Act notice for displacement protection.

Indianapolis is more permissive than most cities when it comes to hotel worker retention. That said, there are still limits.

The Bottom Line

Indianapolis's hotels & lodging rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Indianapolis is broadly strict or permissive.

This guide is based on Indianapolis's current municipal code. Local rules can and do change, so check the individual ordinance pages for the latest details, penalties, and FAQs.