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Vending machine stock

The Indiana House approved a bill Monday that would exempt food purchases from vending machines from the 7 percent sales tax.

INDIANAPOLIS — Hoosiers buying food from vending machines next year might pay a little less if state lawmakers in coming days approve a proposal to exempt those purchases from the 7 percent Indiana sales tax.

The House on Monday voted 93-0 for Senate Bill 124. It now returns to the Senate, where it previously was approved 47-0, for a final decision on whether to send it to Gov. Eric Holcomb for enactment.

Under the plan, food sold through vending machines would be exempt from sales tax, just as it is when purchased at a grocery store or other retailer.

State Rep. Dave Ober, R-Albion, the sponsor of the measure, said it's a simple matter of fairness that identical food items should be taxed the same way no matter how they're sold.

The sales tax exemption only would apply to food products. Candy, soft drinks and other vending machine staples not classified as "food" under Indiana law still would be subject to sales tax, just as they are in stores.

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However, the proposed statute does not mandate vending machine operators reduce their food prices if they currently include sales tax.

The nonpartisan Legislative Services Agency projects the change will shrink Indiana sales tax revenue by approximately $5 million a year.

As a result, if the measure becomes law, it would not take effect until July 1, 2019, to give lawmakers time next year to adjust for the anticipated revenue reduction as they craft Indiana's new two-year state budget.

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Financial Affairs Reporter

Dan has reported on Indiana state government for The Times since 2009. He also covers casinos, campaigns and corruption.