Indiana Code Title 7.1. Alcohol and Tobacco § 7.1-3-22-3

Sec. 3.  (a) The commission may grant only one (1) three-way permit, one (1) two-way permit, and one (1) one-way permit in an incorporated city or town or in an unincorporated town for each one thousand five hundred (1,500) persons, or fraction thereof, residing within the incorporated city or town or the unincorporated town.  The commission shall include liquor retailer permits issued to clubs, but not those issued to fraternal clubs, in its quota computation when it is considering an application for a new liquor retailer's permit.

(b) This subsection applies when a city or town annexes into the city or town unincorporated territory where a retailer's permit has been granted before the annexation.  The commission may only reclassify a retailer's permit for a premises in the former unincorporated territory as a permit for a premises in an incorporated city or town if the permittee has actually conducted a business of selling alcoholic beverages to customers for consumption on the licensed premises for two (2) consecutive years.  The period of two (2) consecutive years may begin to run either before or after the annexation occurs.  However, the following apply when a person applies for a retailer's permit after notice of an annexation hearing is made under IC 36-4-3-2.1 and before the annexation occurs: