This guide provides resources for navigating the tax structure in Bloomington/Monroe County, Indiana. It is intended as a general overview to help you better understand how taxes are collected and spent. As you'll see, it's complicated.
If you're interested in a deeper dive, we recommend watching this presentation by Geoff McKim, an at-large Monroe County Councilor who is an expert in how our local tax system works.
If you're interested in a deeper dive, we recommend watching this presentation by Geoff McKim, an at-large Monroe County Councilor who is an expert in how our local tax system works.
Local Taxes: Overview
Revenue used to operate local government comes primarily from property taxes and income taxes. Other revenue sources include: fees and fines (such as stormwater fees, planning application fees, etc.), grants, transfers from the state (such as the gas tax), the innkeeper's tax, and the food & beverage tax.
These sources are restricted in two primary ways: 1) the amount that can be levied, and 2) the way in which particular tax revenue can be spent.
These sources are restricted in two primary ways: 1) the amount that can be levied, and 2) the way in which particular tax revenue can be spent.
Property Taxes
If you own property in Monroe County, you will receive property tax bills that are due in May and November. It is calculated based on the value of your property and the tax rate that's levied by local taxing authorities, including Monroe County, municipalities (Bloomington, Ellettsville and Stinesville), townships, schools, library and special taxing districts, depending on where your property is located. Click here for a more detailed explanation on the Indiana Dept. of Local Government Finance site.
Local property tax rates are limited by the state in two ways: 1) the "frozen" levy (Assessed Value Growth Quotient), which prevents rates from increasing by more than a state-mandated amount each year, and 2) "circuit breakers" (tax caps), which prevent individual tax bills from exceeding a fixed percentage of assessed value each year.
Circuit breakers are defined in the state Constitution, and limit property taxes from exceeding the following percentage increases on assessed value:
Click here for the most recent local tax rates and a tax calculator to estimate your property tax bill.
Local property tax rates are limited by the state in two ways: 1) the "frozen" levy (Assessed Value Growth Quotient), which prevents rates from increasing by more than a state-mandated amount each year, and 2) "circuit breakers" (tax caps), which prevent individual tax bills from exceeding a fixed percentage of assessed value each year.
Circuit breakers are defined in the state Constitution, and limit property taxes from exceeding the following percentage increases on assessed value:
- 1% for owner-occupied homes (homesteads)
- 2% for agricultural land and other residential, including rental
- 3% for commercial and industrial properties
Click here for the most recent local tax rates and a tax calculator to estimate your property tax bill.
Local Income Tax (LIT)
Monroe County currently levies a local income tax (LIT) of 1.345% on residents. This is in addition to the Indiana personal income tax of 3.23% and federal income tax.
The Monroe County Local Income Tax Council (LITC) is responsible for adopting the local income tax (LIT). It is comprised of four fiscal entities: the Bloomington City Council, the Ellettsville Town Council, the Monroe County Council, and the Stinesville Town Council. Voting shares for these entities are apportioned by population, so Bloomington City Council controls 58% of the LITC vote. (Note: The LITC is a "virtual" council, because it doesn't actually meet. Its votes are cast by the four fiscal entities.) Each of those fiscal bodies is authorized to allocate the portion of LIT revenues that each jurisdiction receives, based on population.
The state requires that the LIT is levied for one of four categories: 1) distributive shares (used for any lawful purpose), 2) public safety, 3) economic development, and 4) corrections. Currently, Monroe County only levies LIT for distributive shares and public safety.
The county's four fiscal entities also comprise the Public Safety LIT Committee (known as PS-LIT), which makes recommendations on setting the local income tax rate to fund public safety operations. Click here for a 2019 PS-LIT analysis report.
The Monroe County Local Income Tax Council (LITC) is responsible for adopting the local income tax (LIT). It is comprised of four fiscal entities: the Bloomington City Council, the Ellettsville Town Council, the Monroe County Council, and the Stinesville Town Council. Voting shares for these entities are apportioned by population, so Bloomington City Council controls 58% of the LITC vote. (Note: The LITC is a "virtual" council, because it doesn't actually meet. Its votes are cast by the four fiscal entities.) Each of those fiscal bodies is authorized to allocate the portion of LIT revenues that each jurisdiction receives, based on population.
The state requires that the LIT is levied for one of four categories: 1) distributive shares (used for any lawful purpose), 2) public safety, 3) economic development, and 4) corrections. Currently, Monroe County only levies LIT for distributive shares and public safety.
The county's four fiscal entities also comprise the Public Safety LIT Committee (known as PS-LIT), which makes recommendations on setting the local income tax rate to fund public safety operations. Click here for a 2019 PS-LIT analysis report.
Food & Beverage Tax
The local Food & Beverage Tax is a 1% tax on food or beverage in Monroe County that's consumed at the location where it is purchased. The tax is collected at the point of purchase, primarily at restaurants.
The FAB tax revenues are divided between the City of Bloomington and Monroe County. Revenues are designated, by ordinance, for a convention center, conference center or related tourism or economic development projects. Click here to read the Dec. 12, 2017 ordinance passed by the Monroe County Council to enact the FAB tax. The bulk of the revenues will be used to fund the expansion of the Monroe Convention Center.
The FAB tax is overseen by the Monroe County Food & Beverage Tax Advisory Commission, which holds regular public meetings to vote on allocation requests from the city and county. Click here for the November 2019 FAB tax distribution report.
Click here for Monroe County's Business Guide to the FAB.
The FAB tax revenues are divided between the City of Bloomington and Monroe County. Revenues are designated, by ordinance, for a convention center, conference center or related tourism or economic development projects. Click here to read the Dec. 12, 2017 ordinance passed by the Monroe County Council to enact the FAB tax. The bulk of the revenues will be used to fund the expansion of the Monroe Convention Center.
The FAB tax is overseen by the Monroe County Food & Beverage Tax Advisory Commission, which holds regular public meetings to vote on allocation requests from the city and county. Click here for the November 2019 FAB tax distribution report.
Click here for Monroe County's Business Guide to the FAB.
Innkeeper's Tax
Since 1977, Monroe County has levied an innkeeper's tax on accommodations and room rentals. The current tax is 5%. The tax revenues are used to operate the Monroe Convention Center and the Monroe County Convention & Tourism Bureau (Visit Bloomington). The Convention & Visitors Commission on Monroe County oversees the funds.
