EVANSVILLE — The Evansville City Council voted in favor of a new tax for drivers in Evansville during its Monday night meeting, but at a lower amount than originally proposed.
In a vote of 8-1, an amended Ordinance G-2025-17, is headed to Mayor Stephanie Terry for a signature.
The council voted in favor of lowering the tax by $5 for each level to $30 for commercial vehicles, $20 for passenger vehicles and $10 for motorcycles. Mary Allen, D-At-Large, made the motion to pass the ordinance with lowered amounts, and it was seconded by Missy Mosby, D-Second Ward.
The amendment passed 8-1, with Angela Koehler Lindsey, R-Fifth Ward, voting against it. Lindsey said the council could wait a year to see where the city is, instead of passing the tax right now.
Yes votes on the amended ordinance were Mosby; Allen; Zac Heronemus, D-Third Ward; Jim Brinkmeyer, D-Sixth Ward; Paul Green, D-At-Large; Tanisha Carothers, D-Fourth Ward; Ben Trockman, D-First Ward; and Courtney Johnson, D-At-Large.
What prompted this new tax for Evansville residents?
It was sparked by House Bill 1461, which Gov. Mike Braun, a Republican, signed into law May 1. It requires municipalities to establish wheel taxes if they want to qualify for certain state grants − money Evansville will need following the passage of Senate Bill 1, another Braun-pushed law that will strip $15 million out of Evansville coffers over the next three years.
SB 1 lowers property taxes through a $300 bill credit, with the biggest cuts handed to the wealthy and those paying the highest amount in taxes. That money would have previously gone to cities and counties, partly for use for road repair.
City officials say the wheel tax will generate an estimated $2.2 million per year, which would be used only for road projects.
The city will release a list of street improvements ranked by priority prior to the tax's implementation. There will also be an annual report published each year to show how the money was used.
The tax would be effective Jan. 1, 2026.
Wheel tax vs. excise tax
Cities with a population of 5,000 and above are allowed to institute a municipal wheel tax and vehicle excise tax. Both must be adopted at the same time; by law, one cannot occur without the other.
As outlined by Accelerate Indiana Municipalities, wheel taxes are applied only to commercial vehicles. For Evansville this will include:
• Buses
• Recreational vehicles
• Semitrailers
• Trailers with a gross weight above 9,000 pounds
• Trucks and tractors with a gross weight above 11,000 pounds
A city can give a different tax rate to different types of commercial vehicles, but Indiana law states they all have to be at least $5 annually and are allowed to be up to $40 annually.
Evansville has opted for a $30 rate.
Excise tax is for passenger vehicles including:
• Passenger motor vehicles
• Motorcycles
• Motor-driven cycles
• Collector vehicles
• Trailer vehicles with a declared gross weight of 9,00 pounds or less
• Trucks with a declared gross weight of 11,000 pounds or less
• Mini trucks
• Military vehicles
According to Accelerate Indiana Municipalities, cities can also choose different rates for this tax, but they must be at least $7.50 annually and can be up to $25.
Evansville has opted for $20 for passenger vehicles and $10 for motorcycles.
Is anyone exempt from the wheel tax?
According to the ordinance, there are some exemptions for commercial vehicles to avoid the wheel tax.
These include:
• A vehicle owned by the State of Indiana
• A vehicle owned by a state agency of the State of Indiana
• A vehicle owned by a political subdivision of the State of Indiana
• A bus owned and operated by a religious or non-profit youth organization and used to transport for religious services or for the benefit of its members
• A school bus
• A motor vehicle that is funeral equipment