ELKHART, Ind. (WNDU) – A wheel tax ordinance is moving to a second reading before Elkhart City Council after a 2025 Indiana General Assembly law required cities to implement a local wheel tax in order to access annual state funding.
City officials said a majority of vehicle owners would not see a change in the amount they pay. If adopted, the revenue would be received by the city rather than passing through the county.
What the change would mean for drivers
Elkhart has collected a wheel tax since 2019 and a surtax since 2015. Most vehicle owners currently pay a $25 fee that the state requires to pass through the county — a cost city leaders said would remain the same for most vehicles.
“Elkhart County residents, when they register their vehicle with the BMV, pay a county surtax or wheel tax that goes to help maintain our roads,” said Megan Erwin, chief of staff for the City of Elkhart.
Commercial vehicles may see an increase, with the wheel tax moving up to $40. The county currently charges $10–$35 for commercial vehicles. Erwin said commercial vehicles represent only 10% of all vehicle registrations.
State funding tied to local adoption
The change would affect one line on a vehicle registration but would unlock state funds for local road maintenance and infrastructure improvements.
“The only reason that we are doing this is because the state legislature required that if we wanted to capture a portion of funding that they have for road maintenance for us they are requiring that the city adopt the wheel tax,” Erwin said.
Last night, the Indianapolis City-County Council approved an increase to vehicle taxes in Marion County.
Elkhart officials said the ordinance will go before City Council for a second and third hearing on July 27. The city has until Sept. 1 to make a decision.
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