r/Elkhart

Hey folks,

This coming week we have a Wheel Tax and Vehicle Excise Surtax (26-O-28) on Monday night's City Council agenda for first read, so let's do a quick Q&A.

Q: Is the City of Elkhart raising my taxes?

A: For about 90% of city residents, no. If you own a passenger car, small truck, or motorcycle, you already pay a $25 vehicle excise surtax when you renew your registration. That amount doesn't change.

Q: Then what's changing?

A: Right now, if you live in the City of Elkhart, those dollars are collected by the State and distributed through the County before the City receives its share.

If this ordinance passes, those same dollars go directly to the City of Elkhart instead.

Q: Am I going to pay both the City and County?

A: No. In 2026, the Indiana General Assembly passed SEA 179, which prevents new municipal wheel taxes and vehicle excise surtaxes from duplicating existing county taxes. That means no double taxation for Elkhart residents.

Q: But Goshen passed a wheel tax and they have to pay both a city and county wheel tax.

A: That's true. Goshen's municipal wheel tax was already in place before SEA 179. The 2026 law applies to new municipal wheel taxes, which is why Elkhart residents would not pay both if this ordinance is adopted.

Q: So who actually sees a change?

A: Commercial vehicles. About 10% of vehicle registrations fall into that category. Those vehicles currently pay a county wheel tax ranging from $10 to $35, depending on the type of vehicle. Under this proposal, those fees would instead become a flat $40 municipal wheel tax.

Q: Why is the City doing this?

A: Because state law now ties eligibility for the Lane Mileage Direct Distribution (LMDD) program to adopting a municipal wheel tax and vehicle excise surtax. If we don't adopt them, Elkhart could lose access to up to $1 million per year in additional state road funding.

Q: If you don't pass it, will my taxes go down?

A: Unfortunately not, Voting no doesn't lower taxes for Elkhart residents. It just means those dollars don't stay with the City, and we risk losing up to $1 million in additional state road funding.

Q: Is the City getting more money from this?

A: Not from the wheel tax itself. The City currently receives about $1.3 million in wheel tax and vehicle excise surtax revenue, and it would continue receiving about $1.3 million under this ordinance. The real benefit is preserving our eligibility for up to $1 million annually in additional state road funding.

Please feel free to ask any questions.