The Christ Church Cathedral has been giving away hot chocolate and selling cookies at Circle of Lights as a youth fundraiser for decades.
However, on Friday night, kids running the church's stand were told by police to leave because they didn't have a special permit, The Indianapolis Star reported.
A city ordinance enacted before the Super Bowl in 2012 that allows special events downtown to establish a "clean zone" where vendors are closely regulated or prohibited. The cookie sale fell inside the Circle of Lights "clean zone," officials said.
Church hospitality director Carl Michaelis said he asked if the kids could just give away the cookies that hadn't been sold yet but the request was denied.
"It's a little distressing," Michaelis said. "We have a lot of cookies."
Typically at the event, the church makes about $1,000 for youth programs. They brought in about $600 that night.
Starbucks was also told to shut down its sidewalk sale, code enforcement spokesman Adam Baker said.