# Indiana SB 1: Local government finance. Indiana SB 1, Local government finance., is a First Regular Session 124th General Assembly (2025) Senate bill sponsored by Travis Holdman (Republican); status signed, last action 2025-04-15 (Signed by the Governor); PRIA reads it as touching household money (as of 2026-10-17). - Canonical: https://policyrisk.com/state-bill/IN-SB1-2025 - As of: 2026-10-17 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Indiana SB 1 - State: Indiana - Session: First Regular Session 124th General Assembly (2025) - Title: Local government finance. - Status: signed - Chamber: Senate - Introduced: 2025-01-14 - Last action: 2025-04-15, Signed by the Governor - Sponsor: Travis Holdman (Republican) - Cosponsors: 10 - Subjects: tax and fiscal policy, the house, ways and means - Touches household money: yes - Roll calls: 25 (657 yes, 1,210 no in all) - Economic provisions PRIA read: 108 ## Summary Places restrictions on the issuance of certain general obligation bonds. Amends a capitalization rate percentage under the statewide agricultural land base rate determination. Provides that the percentage cap used to determine the maximum levy growth quotient is 4% in 2026. Provides that, notwithstanding any growth in a political subdivision's assessed value (AV) in the previous year, a political subdivision's ad valorem property tax levy shall not exceed the ad valorem property tax levy for its last preceding annual budget, unless the fiscal body of the political subdivision adopts an affirmative tax rate and tax levy increase by ordinance following a separate public hearing. Requires a resulting decrease in tax rates for each political subdivision in which there was an increase in the political subdivision's AV in the previous year, subject to any affirmative tax rate and tax levy increase adopted by the fiscal body of the political subdivision. Phases out the authority for the department of local government finance (department) to permit an excess tax levy that is based on AV growth, school transportation costs, and other circumstances. Retains the provisions that permit an excess tax levy if the civil taxing unit cannot carry out its governmental functions in the case of annexation, a natural disaster, an accident, or an emergency. Phases in an increase in the acquisition cost threshold for the business personal property tax exemption from $80,000 to $2,000,000. Provides that the 30% minimum valuation limitation does not apply to business personal property placed in service after January 1, 2025. Phases down the homestead standard deduction over five years to zero beginning for taxes due and payable in 2031. Phases in an increase in the supplemental homestead deduction to 2/3 of the AV of the homestead. Phases in an AV deduction for all property that is subject to the 2% circuit breaker credit for excessive property taxes for assessment dates beginning in 2025 up to a 1/3 AV deduction for taxes due and payable in 2031, and each taxable year thereafter. Expires certain property tax deductions allowed in current law, and instead allows a credit against local property taxes in certain instances. Makes certain changes to the qualification requirements and credit amount for the over 65 circuit breaker credit. Provides a supplemental homestead tax credit for property taxes for a person's homestead if the person qualifies for a standard homestead deduction for the same homestead property. Provides that specified referendums may be placed on the ballot only at a general election. Amends the ballot language for controlled project, school operating, and school public safety referendums. Provides that a school corporation may not adopt a resolution to place a controlled project referendum on the ballot during the second calendar year after the final calendar year in which a previously approved controlled project referendum levy is imposed. Modifies the threshold amounts used for determining whether a political subdivision's project is a controlled project and whether the petition and remonstrance process or the referendum process applies based on the political subdivision's total debt service tax rate. Adds provisions to authorize a county fiscal body to adopt an ordinance to establish a property tax payment deferral program (program). Provides that a qualified individual participating in the program may defer the payment of part of the property taxes that would otherwise be due on a homestead. Provides that property taxes deferred under the program are due after the occurrence of a deferral termination event. Provides that the maximum amount of taxes that may be deferred cumulatively year over year may not exceed $10,000. Increases, beginning in 2028, the maximum local income tax (LIT) expenditure rate for all counties to 2.9%. Authorizes a city or town to impose a municipal LIT rate beginning in 2028 not to exceed 1.2%. Provides that within a county's total expenditure rate, the county may adopt: (1) up to a 1.2% rate for county general purpose revenue; (2) up to a 0.4% rate for fire protection and emergency medical services; (3) up to a 0.2% rate for nonmunicipal civil taxing unit general purpose revenue; and (4) up to 1.2% for certain cities and towns that are not eligible to adopt a municipal LIT rate. Eliminates provisions that provide for a distribution of LIT expenditure rate revenue to schools and civil taxing units in counties that imposed a rate under the prior county adjusted gross income tax. Authorizes a county fiscal body to impose a local income tax expenditure rate to provide property tax relief for property tax liability attributable to homesteads in the county before January 1, 2028. Expires the authority to impose a property tax relief rate under the LIT and repeals the levy freeze rate. Provides that, in order to continue to impose an expenditure tax rate after 2027, each county must adopt a new ordinance on or before October 1, 2027, to impose the rate. Provides that, for counties that fail to adopt an ordinance to renew an existing expenditure tax rate in 2027, the expenditure tax rate for the county in 2028 shall be the minimum tax rate necessary for existing debt service. Specifies that this does not prevent the county from renewing, imposing, or modifying an expenditure tax rate in subsequent years. Eliminates local income tax councils beginning July 1, 2027, and instead provides that the county fiscal body is the adopting body in all counties for purposes of the county LIT, and the city or town fiscal body is the adopting body in the case of a municipal LIT. Establishes the state and local income tax holding account within the state general fund for purposes of LIT distributions. Requires the budget agency to maintain an accounting for each county imposing a county LIT based on annual returns filed by or for county taxpayers (same as current law). Requires undistributed amounts so accounted to be held for purposes of the state and local income tax holding account beginning after December 31, 2026. (Under current law, undistributed amounts are required to be held in reserve separate from the state general fund.) Requires the budget agency to present each December to the budget committee a report of the following: (1) An estimate of the monthly certified distribution amounts for the immediately succeeding calendar year. (2) A description of the method used to determine the monthly estimates. Beginning in 2028, requires the budget agency to make monthly transfers to the state and local income tax holding account of the amount determined for the month in the budget agency's report to the budget committee. Repeals a provision that requires the budget agency to adjust the certified distribution of a county for the succeeding year following a tax rate change. Requires the department to develop and maintain a property tax transparency portal through which taxpayers may: (1) compare the property tax liability in their current tax statement compared to their potential property tax liability based on changes under a proposed tax rate; and (2) provide taxpayer feedback to the department. Prohibits the northern Indiana commuter transportation district from issuing new bonds after May 9, 2025, that are payable in whole or in part from amounts distributed from the commuter rail service fund or the electric rail service fund. Requires all school corporations that adopt a resolution for an operating referendum tax levy that is imposed for the first time with property taxes first due and payable beginning after 2027 to share revenue with certain charter schools. Requires, beginning with distributions in 2028, that all school corporations begin sharing revenue from the school corporation's operations fund levy with certain charter schools. Provides for the phasing in of the sharing of revenue with certain charter schools from the school corporation's operations fund levy. Provides for the appointment of additional board members to the governing board of a charter school that receives property tax revenue. Sets forth additional procedures related to the closure of a charter school. Dissolves the Union School Corporation. Provides that for a fire protection territory established after January 1, 2025, each unit in a territory may not impose a tax rate that exceeds $0.40 per $100 of assessed valuation. Makes conforming changes. Makes technical corrections. Makes an appropriation. ## Bill overview: provisions PRIA read - Automatic property deductions grow through 2030: benefit, high. Property eligible under categories (2) through (4) of Indiana's excessive property-tax credit receives an automatic assessed-value deduction. The deduction is 6% for 2025 assessments, 12% for 2026, and 19% for 2027. It rises to 25% for 2028, 30% for 2029, and 33.4% for 2030 and later. County audito… - Home tax relief for disabled veterans: benefit, high. Qualifying disabled veterans receive a deduction for a home provided free by a federally tax-exempt organization. Veterans need at least 90 days of service, an honorable discharge, and qualifying records showing at least 50% disability. The stated deduction is 50% of assessed home value for disabil… - More seniors qualify for property-tax relief: benefit, high. Beginning January 1, 2025, income limits rise for the existing senior homestead property-tax credit. The single-return limit doubles from $30,000 to $60,000; the joint-return limit rises from $40,000 to $70,000. Limits adjust annually for Social Security cost-of-living increases. Applicants must me… - Larger supplemental deductions for homeowners: benefit, high. The law increases the supplemental deduction, which reduces the home value subject to property tax. For taxes first due in 2025, rates are 37.5% on the first $600,000 and 27.5% above that, after the standard deduction. Rates on value remaining after the standard deduction are 40% in 2026, 46% in 20… - Disabled veterans get property tax credits: benefit, medium. A $150 property tax credit covers honorably discharged veterans with at least 90 days of service and a total disability. Veterans age 62 or older also qualify with a disability of at least 10%. A separate $250 credit covers honorably discharged wartime veterans with a service-connected disability o… - Homeowners get an automatic tax credit: benefit, medium. For property taxes first due in 2026 onward, eligible homeowners get a credit equal to 10% of eligible taxes. The credit cannot exceed $300 a year. It covers people who qualify for the standard homestead deduction and surviving spouses married at death to someone who qualified. Taxes imposed throug… - Seniors get a property tax credit: benefit, medium. Beginning January 1, 2025, qualifying seniors get a $150 annual property tax credit on their residence. Claimants must be 65 by the prior December 31 and have owned or held a qualifying purchase contract for at least one year. Income from two years before the tax-payment year cannot exceed $60,000… - Hancock County library tax credits allowed: benefit, medium. Beginning July 1, 2027, Hancock County may allocate up to 0.15% of its local income tax rate to library property tax credits. This authority lasts only before the funding tax expires on December 31, 2027. All county territory must be in a library district. A participating library must have reciproc… - New fire territories face tax cap: benefit, medium. The law caps the applicable fire territory property tax rate at $0.40 per $100 of assessed value. The cap covers provider and participating units in territories established by ordinances or resolutions adopted after December 31, 2024. It limits the rate, but does not guarantee a reduction from a pr… - Vehicle tax credits survive deduction changes: benefit, medium. Beginning January 1, 2027, eligible owners can use remaining qualifying property-tax deductions toward vehicle excise tax for the same payable year. This credit equals $2 per $100 of taxable vehicle value, or a major portion, limited by the deduction left after real and personal property deductions… - Businesses keep qualifying county property exemptions: benefit, medium. Beginning July 1, 2027, the county adopting body replaces the local income tax council in managing new personal property exemptions. It can adopt, amend, or repeal an exemption ordinance, with notice and a public hearing required before adoption. Property exempt when placed in service keeps its exe… - Enterprise district businesses gain valuation relief: benefit, medium. Beginning January 1, 2025, qualifying depreciable business property in entrepreneur and enterprise districts avoids minimum tax-valuation limits. The owner must place the property in service after the district is designated. At least one employee must use the property there and perform most of thei… - More business equipment earns tax breaks: benefit, medium. Approved new farm, research, distribution, and information technology equipment joins manufacturing equipment in qualifying for economic revitalization tax deductions. Owners must submit a benefits statement before the applicable hearing or equipment installation. The local approving body must find… - More business equipment qualifies for exemption: benefit, medium. Businesses qualify for a county personal-property tax exemption when their total acquisition cost falls below the applicable limit. The limit rises from $80,000 for pre-2025 assessments to $1 million for the 2025 assessment. It rises again to $2 million for 2026 and later assessments. Businesses mu… - Local property-tax increases need separate approval: benefit, medium. Beginning January 1, 2029, local property-tax levies generally cannot exceed the previous budget's levy, even when assessed values grow. Tax rates must decrease as assessed values rise, unless officials authorize an increase. An increase requires a separately noticed public hearing and an ordinance… - New districts face lower property-tax caps: benefit, low. Special benefits districts established after December 31, 2024, face a lower property tax rate cap. Their rate cannot exceed $0.05 per $100 of assessed value, rather than $0.0667. Actual bills depend on property value and the rate the district sets. - School candidates keep prior residency credit: benefit, low. People who lived in territory annexed from Union School Corporation receive credit for that earlier residence in the successor district. This applies only to the school candidacy residency requirement, not general residency status. - County income taxes need annual renewal: benefit, low. After December 31, 2030, county expenditure income-tax rates expire each December 31 unless local officials renew them. Renewal requires an ordinance for the succeeding year, even when the rate and its parts remain unchanged. Without renewal, the rate ends. - Cross-border workers gain potential tax exemptions: benefit, low. Beginning January 1, 2028, Indiana counties and municipalities can make local income tax reciprocity agreements with local governments in other states. Agreements provide reciprocal exemptions for resident taxpayers' income to the extent stated in the agreement. The agreement must also take effect… - More filing time for homeowners: benefit, low. The homestead deduction filing deadline moves from January 5 to January 15 in the year taxes are first due. Applicants must complete, date, and file the certified statement by then. Any required recording must also be completed by January 15. - Fire and ambulance providers gain funding: benefit, low. Beginning July 1, 2027, eligible fire and emergency medical service providers can seek next-year public safety tax distributions. Applications are due before July 1, including from qualifying providers not otherwise entitled to distributions. Officials can allocate up to all revenue from the public… - Changed public projects need another vote: benefit, low. At least 10 property owners or registered voters can request a hearing on changes to a voter-approved controlled project. They must petition within one year after final approval. A finding of material change requires a new public vote. The ballot must show the project term, maximum principal and fi… - Schools face a project financing pause: benefit, low. Schools face a one-calendar-year pause after the final year of a previously approved controlled-project referendum levy. During that year, the school corporation cannot adopt a preliminary resolution for covered bonds or leases. It also cannot adopt a resolution extending a referendum levy. - Taxpayers get online property tax comparisons: benefit, low. The Department of Local Government Finance must maintain an online tool comparing current property taxes with taxes under proposed rates. Taxpayers can also send feedback to the department and local governments. The law specifies a January 1, 2026 availability deadline, although this provision take… - School operating ballots explain home taxes: benefit, low. Beginning July 1, 2025, operating referendum ballots identify the school, purpose, duration, maximum tax rate, and maximum annual levy. New-levy ballots show the estimated annual tax increase for a median home and the latest operating referendum’s year and outcome within five years. Levy-extension… - School safety votes get clearer disclosures: benefit, low. Beginning July 1, 2025, covered school safety referenda require school website disclosures at least 30 days before the general-election vote. In Lake, Marion, St. Joseph, and Vanderburgh counties, this covers resolutions adopted after May 10, 2023, and participating charter schools. Disclosures inc… - School voters get more referendum information: benefit, low. School corporations and participating charter schools must post disclosures at least 30 days before covered general-election referendum votes. Disclosures include salaries ranked by position, Gateway and audit links, enrollment by student group and race, and graduation rates. They also include five… - Local development money gets broader uses: benefit, low. Beginning January 1, 2028, counties, cities, and towns have broader uses for revenue allocated for economic development. Allowed uses include financing, capital projects, operating costs, venture capital funds, and lawful purposes available to another fund. This does not create household payments o… - Marion County gains service funding options: benefit, low. Beginning July 1, 2027, Marion County can use general-purpose revenue for libraries, public transportation, and public communications and computer facilities. Allocations follow the county fiscal body’s election under the applicable law. They are no longer limited to revenue that otherwise goes out… - Charter schools receive operations tax shares: benefit, low. County auditors must distribute qualifying school operations levy revenue to eligible charter schools, excluding virtual charter schools and adult high schools. For 2025–2027, this covers specified school corporations’ levies imposed after June 30, 2024, and before January 1, 2028. Annual distribut… - Charters share qualifying school referendum money: benefit, low. County auditors must share qualifying operating and safety referendum revenue with eligible charter schools, excluding virtual schools and adult high schools. In Lake, Marion, St. Joseph, and Vanderburgh counties, participating schools share qualifying safety levies approved after May 10, 2023. The… - Network charter schools gain financial protections: benefit, low. School corporations generally cannot charge participating innovation network charter organizers more for goods and services than their specified operations levy receipts. An agreement entered before July 1, 2024, can provide a different rule. School corporations also cannot change the use of an occ… - Counties can direct leftover tax money: benefit, low. A county financial plan may state how to use local income tax revenue left after the plan's needs are met. The plan can direct that money to property tax relief before that authority expires, or treat it as additional revenue. This option does not guarantee a household tax cut or payment. - Local debt payments keep pledged revenue: benefit, low. Beginning July 1, 2027, officials cannot cut a local taxing unit’s general-purpose revenue share below covered debt-payment needs. The protection includes required reserve deposits for obligations secured by that revenue. It also protects required payments to the Northwest Indiana Regional Developm… - Local property levy growth stays limited: benefit, low. For 2026, local levy limits use 80% of calculated growth above 1.00, with the growth quotient capped at 1.04. This applies to civil taxing units and school operations funds. The law also removes the assessed-value growth appeal, whose former qualifying quotient was at least 1.02. Goshen loses its s… - Local tax distribution methods stay longer: benefit, low. The local income tax distribution method used before July 1, 2027, continues throughout 2027. The calculation for 2027 certified distributions also applies in 2028 and 2029, despite new county or municipal tax rates. This preserves the distribution method among local governments, not household tax… - More local projects face public review: benefit, low. New debt-service rate thresholds bring bond- or lease-funded projects into controlled-project review for preliminary decisions after June 30, 2025. Thresholds are above $0.40 per $100 of assessed value for schools and $0.25 for cities, counties, or towns. Other local units have a $0.05 threshold. V… - Steel mini-mills gain equipment valuation option: benefit, low. Beginning January 1, 2025, mini-mill taxpayers can elect a special equipment valuation method on their business personal-property returns. It multiplies adjusted cost by the applicable Pool No. 5 percentage, without the minimum valuation limit. Eligible steel-production equipment excludes special t… - Towns gain population-based tax choices: benefit, low. Beginning July 1, 2027, cities and towns crossing the 3,500-person census threshold can elect to retain their prior population-based tax treatment. They must adopt an ordinance by September 1 of the year after the relevant federal census, effective the next January 1. Separately, municipalities wit… - Homeowners lose the standard homestead deduction: cost, high. The law phases out the maximum standard homestead deduction by assessment year. The limit is $48,000 in 2025, $40,000 in 2026, $30,000 in 2027, $20,000 in 2028, and $10,000 in 2029. It reaches zero with the 2030 assessment date. The same schedule covers qualifying mobile and manufactured homes asse… - Tighter limits on home repair deductions: cost, high. The residential rehabilitation deduction covers only qualifying work completed before January 2, 2017, and assessment dates before January 1, 2025. It expires January 1, 2027. The deduction is the smaller of the assessed-value increase or $18,720 per dwelling unit, generally for five years. Local o… - Cities can add local income taxes: cost, high. Beginning January 1, 2028, qualifying cities and towns can add an income tax of up to 1.2%, beyond county taxes. Eligibility generally requires at least 3,500 residents, subject to statutory population rules and elections. The tax covers resident local taxpayers and nonexempt professional athletes… - Home energy property deductions end: cost, high. Solar, wind, hydroelectric, and geothermal device deductions cover only assessment dates before January 1, 2025; their sections expire January 1, 2027. Wind, hydroelectric, and geothermal deductions cover the assessed-value increase caused by the device. Hydroelectric and geothermal devices must ha… - Local property tax relief sources expire: cost, high. County property tax relief rates and their governing tax chapter expire December 31, 2027. Lake County ordinances under the covered allocation provision also expire that day, ending their funded credits. The Lake County allocation section expires July 1, 2028. Beginning January 1, 2028, covered loc… - Narrower deductions for trust-owned homes: cost, high. The trust-held property deduction pathway applies only to assessment dates before January 1, 2025, and expires January 1, 2027. The county auditor must confirm that the occupant has a beneficial trust interest or qualifying rent-free occupancy right. The occupant must also qualify for the underlyin… - Surviving spouses lose older veteran deduction: cost, high. The $18,720 assessed-value deduction for qualifying surviving spouses covers only assessment dates before January 1, 2025. The deceased spouse must have served before November 12, 1918, and received an honorable discharge. The survivor must own or be buying the property when filing and cannot also… - Enterprise-zone property deduction winds down: cost, high. The obsolescence deduction for enterprise-zone property in a county containing a consolidated city covers only assessments before January 1, 2025. The property must have received an obsolescence depreciation adjustment in the assessment year before purchase. Owners must apply and obtain county fisc… - Farm storage improvement deductions end: cost, high. The fertilizer and pesticide storage improvement deduction covers only assessment dates before January 1, 2025. It deducts the assessed value attributable to qualifying improvements. Owners must own or be buying the property on the assessment date and file a certified statement with state chemist c… - Blind and disabled homeowners lose deduction: cost, medium. The $12,480 assessed-value deduction for blind or disabled residents applies only to assessment dates before January 1, 2025. The section expires January 1, 2027. Applicants must be blind or have a qualifying disability and principally live in the property. Their taxable gross income for the prior… - Broader income tax for county nonresidents: cost, medium. Beginning January 1, 2028, local tax rules remove an income limit for taxpayers who are not county residents. Previously, the limit counted only income from their principal business or workplace. More of an affected taxpayer’s adjusted gross income can now enter the local tax calculation. The law d… - Grant County can authorize jail taxes: cost, medium. Beginning July 1, 2027, Grant County’s county adopting body controls the authority to impose an additional jail income tax. The tax funds jail facilities and related bonds or leases. Its rate cannot exceed 0.5% or the rate needed, whichever is lower. The county must first repeal the ordinance provi… - Local debt can sustain taxpayer costs: cost, medium. Beginning July 1, 2025, the state finance department can authorize property-tax levy increases for covered debts, judgments, and lease rentals. This authority overrides the new levy limit, but other property-tax and school levy limits still apply. Beginning January 1, 2028, officials cannot reduce… - Senior homeowners lose an older deduction: cost, medium. The senior property-tax deduction applies only to assessment dates before January 1, 2025; its section expires January 1, 2027. The deduction is the lesser of half the assessed value or $14,000, with a $240,000 property-value cap. Applicants must be at least 65, except qualifying surviving spouses,… - Veterans lose two property tax deductions: cost, medium. Two veterans’ assessed-value deductions apply only to assessment dates before January 1, 2025; both sections expire January 1, 2027. The $24,960 deduction requires wartime service, honorable discharge, and a documented service-connected disability of at least 10%. The $14,000 deduction requires at… - Property owners cannot stack repair deductions: cost, medium. Beginning January 1, 2025, owners cannot combine an economic revitalization deduction with specified deductions for the same repairs or improvements. The restriction involving deductions under sections 18 and 22 expires January 1, 2033. A separate restriction bars combining that deduction with the… - Tax filers must identify their main home: cost, low. Indiana individual income-tax filers must give the address of their main home on their returns. The rule takes effect January 1, 2027, and covers tax years beginning in 2025 or later. It adds a reporting requirement without changing the tax owed. - Employers must track municipal tax withholding: cost, low. Beginning January 1, 2028, employers must report withholding amounts for each municipality imposing the specified municipal income tax. They must include this breakdown when sending withheld taxes and in their annual withholding report. This reporting rule does not itself change tax rates. - Charter schools face referendum advocacy limits: cost, low. Charter schools that may receive operating or school safety referendum levy revenue face the same referendum-promotion restrictions as school corporations. The rule limits school advocacy, not household speech. - Local tax votes move to November: cost, low. Beginning July 1, 2025, school operating, school safety, and covered major capital project questions appear only at general elections. Local officials must certify each question by noon on August 1. The law narrows election timing without itself approving a tax. - Local governments face bond waiting period: cost, low. Covered local governments must wait one year after certain short-term general obligation bonds expire before issuing new general obligation bonds. The trigger includes qualifying bonds issued for two years or less, including those issued before May 1, 2025. The covered borrowing rules concern prope… - Local rainy day funding narrows: cost, low. Beginning July 1, 2026, local governments lose one allowed source for rainy day funds. They can no longer use unused, uncommitted funds covered by the specified local income tax provision. Other lawful sources listed in the fund’s ordinance or resolution remain available. - Charter funding requires public budget deadlines: cost, low. Starting with 2026 referendum distributions, charter schools must adopt a current-year budget by October 15. They must present it to their board publicly at least 10 days before adoption. The budget, compliance dates, and attestation are due November 1. Missing these steps costs the school that yea… - Charter schools face operating fund limits: cost, low. Charters receiving the specified operations levy distributions must limit spending to allowed facility, capital, transportation, overhead, and playground costs. Capital spending over $10,000 generally needs a board-approved plan after a public hearing; bus replacement also needs an approved plan. T… - Fire territories face tax allocation limits: cost, low. For fire territories established by measures adopted after December 31, 2024, county approval is required for certain extra income tax allocations. This applies when creating the territory raises the property tax levy and produces extra income tax revenue for its provider unit. The rule assigning p… - Lake County development revenue falls: cost, low. Beginning July 1, 2027, economic development allocations in Lake County certified distributions face these reductions: Lake County 25%; Crown Point 10%; Dyer 15%; Gary 7.5%; Hammond 15%; Highland 12%; Hobart 18%; Lake Station 20%. The remaining reductions are Lowell 15%; Merrillville 22%; Munster 3… - Resource recovery systems lose tax deduction: cost, low. The resource recovery system deduction, generally 95% of assessed value, applies only to assessment dates before January 1, 2025. The section expires January 1, 2027. Systems must have environmental certification for 1993 or earlier and a timely deduction application for the 1993 assessment year. S… - State delays some new local-tax revenue: cost, low. Beginning January 1, 2028, the state holds back revenue from qualifying local income tax rates first imposed after 2027. The holdback equals 5% of each of the first three annual certified distributions from the new rate. The money goes into the county's or municipality's trust account instead of it… - County income taxes can fund homeowner credits: mixed, high. Beginning July 1, 2025, counties can adopt an income tax to fund uniform credits for homesteads eligible for the 1% property-tax limit. Rates must use 0.01% steps and cannot exceed 0.3%. Credits apply after other applicable credits and exclude voter-approved referendum taxes. Revenue can only repla… - New limits for county income taxes: mixed, high. Beginning July 1, 2027, counties can authorize income-tax components totaling up to 2.9% of residents’ adjusted gross income. Caps are 1.2% for county services, 0.4% for fire and emergency medical services, and 0.2% for nonmunicipal units; together, these cannot exceed 1.7%. Another 1.2% municipal-… - Counties recover improper homeowner tax deductions: mixed, medium. County auditors can recover taxes, interest, and penalties for an improper standard homestead deduction, with findings made within three years after taxes were first due. Payment normally is due within 30 days. Owners get one year without interest or penalties when the auditor made an error and the… - Homeowners can defer taxes through counties: mixed, medium. Beginning July 1, 2025, counties can adopt tax-deferral programs by November 1 before the first tax-payment year, starting in 2026. Eligible homeowners can defer $100–$500 yearly, up to $10,000 total, with interest up to 4%; deferred taxes become a lien. Applicants need five years of qualifying own… - Property tax relief for disabled homeowners: mixed, medium. Beginning January 1, 2025, blind homeowners and homeowners with a qualifying disability get a $125 property tax credit. Claimants must own their main residence or buy it under a recorded contract. A qualifying disability prevents substantial paid work and is expected to cause death or last at least… - Project location controls movers' local taxes: mixed, medium. Beginning January 1, 2028, a special rule applies to people moving during the year to start project employment or business. The move must make them local taxpayers where the qualified economic development tax project is located. Only the county or municipality containing that project can tax the in… - Residence reshapes who owes local taxes: mixed, medium. Beginning January 1, 2028, local income-tax residence follows your January 1 home, not your principal workplace or business. Moving to another county or municipality later does not change that year’s local tax liability. Municipal tax status follows residence; a work-only connection does not qualif… - School transportation levy appeals phase out: mixed, medium. Schools can seek higher operations levies for levies imposed before January 1, 2026; the appeal authority expires December 31, 2026. Appeals cover specified transportation cost increases of at least 10% or necessary bus purchases under an adopted replacement plan. Schools must show transportation c… - Farm property gets new valuation rules: mixed, medium. For assessments beginning in 2023, agricultural improvements cannot use residential, commercial, or industrial adjustment factors; other parcel portions use similar-property factors. Beginning January 1, 2025, the state calculates the land base rate by March 1 using a six-year average, excluding th… - Counties apply property credits in order: mixed, low. Beginning January 1, 2025, the credit under Indiana Code chapter 6-1.1-51.3 has a set place in property-tax calculations. Counties apply it after the excessive property-tax credit under section 6-1.1-20.6-7.5 and before other listed credits. The law does not change any credit's stated amount. - Emergency building repairs can bypass review: mixed, low. Beginning July 1, 2025, the state finance department can waive specified controlled-project rules for emergency building maintenance. The building must be owned or leased by the local government. The government must request a waiver and provide required information; the department must decide withi… - Local debt projects face more public review: mixed, low. For bond or lease decisions after June 30, 2025, additional projects face public notice, hearings, and petition review. Covered debt-service rates per $100 of assessed value are above $0.40 through $0.70 for schools, above $0.25 through $0.40 for cities, counties, and towns, and above $0.05 through… - Project votes show costs at general elections: mixed, low. Beginning July 1, 2025, covered project ballots show the maximum tax term, principal and financing costs, and annual levy. They also show the annual tax increase for a median home, using its assessed value rounded up to the next $50,000. These figures replace average percentage increases for homes… - Counties appoint members to charter boards: mixed, low. Beginning July 1, 2025, covered charter schools receiving property-tax revenue must have a county-appointed board member. The county executive where the organizer is incorporated makes the appointment, including for organizers operating in several counties. Appointees cannot currently serve on a sc… - Union schools split between neighboring districts: mixed, low. On July 1, 2027, Union School Corporation and its governing body are dissolved. Its Henry County territory joins Blue River Valley Schools, and its Randolph County territory joins Monroe Central School Corporation. The successor corporations must begin any needed board-composition planning by July… - Local fire funding follows new formulas: mixed, low. Beginning July 1, 2027, eligible fire and emergency medical providers receive county tax shares based on population plus 20 times service-area square miles. Population uses the latest federal decennial census; county councils can also fund township and volunteer departments. Separately, matching lo… - Northwest Indiana revenue must fund regional projects: mixed, low. Covered local governments must use general-purpose revenue allocated for economic development first to fund a rail project. The State Comptroller withholds the state finance department's determined amount and pays the Northwest Indiana Regional Development Authority. Beginning January 1, 2028, Port… - Northwest rail funding gains new rules: mixed, low. Beginning July 1, 2027, local units that previously committed support can use any legally available revenue for covered rail projects. This includes economic development allocations, transferred to the Northwest Indiana Regional Development Authority before local certified distributions. Beginning… - Local debt gets revenue protections: mixed, low. While covered bonds or leases remain, pledged revenue cannot fall below 1.25 times the highest annual debt service, plus the highest annual lease payments. Other specified bodies can pledge general-purpose revenue to help meet that level. For obligations incurred after May 9, 2025, pledges cannot e… - Charter schools share local operating funds: mixed, low. A temporary rule shares school operations levy revenue by student counts in Lake, Marion, St. Joseph, and Vanderburgh Counties. Effective January 1, 2025, through December 31, 2027, it covers revenue collected after June 30, 2024, and before January 1, 2028. Distressed school corporations, virtual… - Charter schools share school operating taxes: mixed, low. Starting in 2028, school operating-tax revenue is shared when charter attendance reaches the greater of 100 qualifying students or 2% of spring enrollment. Shares depend on qualifying student counts; virtual charter schools, adult high schools, and students receiving over 50% virtual instruction ar… - Charters gain referendum money with limits: mixed, low. Beginning July 1, 2025, auditors share qualifying school operating referendum revenue with participating charters in Lake, Marion, St. Joseph, and Vanderburgh Counties. The rule covers referenda approved after May 10, 2023, but excludes levies first imposed on taxes due after December 31, 2027. Vir… - Closing charters must repay public funds: mixed, low. Closing charter schools must return unspent money from the specified operations levy distributions to the distributing school corporation. They lose access to future distributions from those levies. Schools closing with debt must repay it using legally available revenue. A school owning a building… - New charter shares carry participation rules: mixed, low. Qualifying referendum levies first payable in 2028 or later share revenue using fall enrollment counts for students receiving no more than 50% virtual instruction. Resident charter enrollment must reach the greater of 100 students or 2% of the corporation’s spring enrollment, excluding students rec… - Schools face referendum revenue planning rules: mixed, low. For covered referenda, school corporations must request state education information at least 60 days before their resolution vote; replies are due within 10 days. Resolutions must project charter payments, while spending plans must address possible differences, appear in proposed budgets, and be pr… - Union school taxes go to successors: mixed, low. For the second property tax installment first due in 2027, auditors redirect revenue otherwise collected for Union School Corporation. Revenue from Randolph County property goes to Monroe Central School Corporation. Revenue from Henry County property goes to Blue River Valley Schools School Corpora… - Union schools settle debts and assets: mixed, low. Beginning July 1, 2025, Union School Corporation cannot issue new bonds, sign leases, or incur other new obligations. Before dissolution, it must offer buildings and land on the open market, then offer unsold buildings through the statutory purchase process. Property still unsold transfers to Monro… - Development funding gets revised planning rules: mixed, low. Beginning July 1, 2027, capital planning rules apply to general-purpose revenue allocated for economic development. Plans must list projects, estimated costs, funding sources, and schedules for at least two years. Included projects must cost at least 75% of the unit’s expected share for that period… - Local development funds gain financing flexibility: mixed, low. Beginning July 1, 2027, counties and municipalities can fund economic development revolving loans with eligible local income-tax revenue. Their fiscal bodies can authorize transfers of that revenue and related loan repayments to their economic development income-tax funds. The law also repeals the… - Business equipment gets valuation floors and exceptions: mixed, low. Beginning January 1, 2025, covered business and utility equipment generally has a minimum taxable value of 30% of adjusted cost. The floor covers property placed in service on or before that date, measured within each taxing district. Later equipment generally escapes the floor, except in qualifyin… - Counties face revised state tax distributions: mixed, low. County-specific accounting and reserve requirements for undistributed income taxes expire December 31, 2027; the old system credited investment income to counties. Beginning January 1, 2028, counties lose supplemental distributions triggered when trust balances exceed 15% of certified distributions… - Counties gain spending control over taxes: mixed, low. Beginning July 1, 2027, revenue from the specified county-services income-tax rate goes directly to the county. Counties can use it for public safety, hospitals, economic development, corrections, county judicial staff, and other county purposes. They can also fund homestead credits that replace th… - Counties set taxes and share local revenue: mixed, low. Beginning July 1, 2027, counties can set income-tax rates for nonmunicipal civil units: 0.05% per type and 0.2% combined. Revenue is shared by population; eligible cities and towns can also receive population-based shares under a separate county tax component. Units generally request funds by July… - Counties take charge of local taxes: mixed, low. On July 1, 2027, county fiscal bodies take over income tax councils’ powers, records, and property; existing ordinances remain binding until changed. County fiscal bodies also become the adopting bodies for county vehicle surtaxes and wheel taxes. City and town fiscal bodies adopt municipal income… - Dedicated county service tax authorities end: mixed, low. Beginning January 1, 2028, the law repeals three dedicated county local income tax authorities. They fund public safety answering points, acute care hospital operations, and correctional or rehabilitation facilities. Counties can no longer impose dedicated rates under those provisions. The repeal d… - Development zones get tax allocation safeguards: mixed, low. From 2026 through 2033, the state adjusts tax increment financing base values for rate changes caused by specified property deductions. Revenue increases from those changes go only to the base, rather than the development increment. When revenue falls, an area can receive a positive adjustment if i… - Emergency levy appeals can raise taxes: mixed, low. Civil taxing units can seek higher levy limits when annexation, disasters, accidents, or unexpected emergencies prevent them from carrying out governmental functions. Appeals must include reasonably detailed facts, and the state must determine that an emergency prevents those functions. Continuing… - Fast-growing towns' levy exception expires: mixed, low. The municipal levy-limit exception covers levies imposed after December 31, 2016, and before January 1, 2026. A municipality needs prior-year assessed-value growth at least twice that year's levy growth quotient. Its population must also have increased by at least 150% between the last two decennia… - Former levy-freeze counties can raise levies: mixed, low. Beginning January 1, 2028, the law repeals the former levy-freeze tax's rate, reduction, and revenue-use rules. In covered counties, civil taxing units' levy limits increase by the prior year's levy-freeze revenue adjustment, including in later years. Counties may use stabilization funds for operat… - Residential value changes redevelopment tax sharing: mixed, low. Beginning July 1, 2027, qualifying redevelopment areas include residential value in their tax-allocation base when not already included. A larger base leaves less growth in assessed value available to the redevelopment district. The rule covers areas established after June 30, 2025 under IC 36-7-14… - State creates dedicated local tax holding account: mixed, low. Beginning July 1, 2027, the Indiana Budget Agency administers a local income-tax holding account within the state general fund. Monthly estimated transfers begin in 2028. After December 31, 2027, undistributed county amounts are held for the account, and county certified distributions come from it.… ## Sponsors and cosponsors - Sponsor: Travis Holdman (Republican), Senate - Cosponsor: Brian Buchanan (Republican), Senate - Cosponsor: Chris Garten (Republican), Senate - Cosponsor: Craig Snow (Republican), House - Cosponsor: Edward Clere (Republican), House - Cosponsor: Jack Jordan (Republican), House - Cosponsor: Jeffrey Thompson (Republican), House - Cosponsor: Linda Rogers (Republican), Senate - Cosponsor: Mike Gaskill (Republican), Senate - Cosponsor: Scott Baldwin (Republican), Senate - Cosponsor: Tyler Johnson (Republican), Senate ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2025-04-15 | Senate | Senate concurred with House amendments | pass | 27 | 22 | | | 2025-04-10 | House | Third reading: passed | pass | 65 | 29 | | | 2025-04-09 | House | Amendment #7 (DeLaney) failed | fail | 27 | 66 | | | 2025-04-09 | House | Amendment #8 (DeLaney) failed | fail | 27 | 65 | | | 2025-04-09 | House | Amendment #20 (Porter) failed | fail | 22 | 60 | | | 2025-04-09 | House | Amendment #24 (Porter) failed | fail | 23 | 60 | | | 2025-04-09 | House | Amendment #14 (Porter) failed | fail | 25 | 62 | | | 2025-04-09 | House | Amendment #26 (Porter) failed | fail | 22 | 59 | | | 2025-04-09 | House | Amendment #16 (Porter) failed | fail | 24 | 61 | | | 2025-04-09 | House | Amendment #15 (Porter) failed | fail | 25 | 60 | | | 2025-04-09 | House | Amendment #1 (Campbell) failed | fail | 27 | 64 | | | 2025-04-09 | House | Amendment #2 (Pryor) failed | fail | 22 | 65 | | | 2025-04-09 | House | Amendment #11 (DeLaney) failed | fail | 26 | 63 | | | 2025-04-09 | House | Amendment #3 (Jackson C) failed | fail | 20 | 68 | | | 2025-04-09 | House | Amendment #36 (Thompson) prevailed | pass | 70 | 27 | | | 2025-04-09 | House | Amendment #9 (DeLaney) failed | fail | 27 | 64 | | | 2025-04-09 | House | Amendment #19 (Porter) failed | fail | 27 | 58 | | | 2025-04-09 | Senate | Roll Call 417 on SB0001.04.ENGH.CON01 | pass | 27 | 22 | | | 2025-04-09 | House | Amendment #22 (Porter) failed | fail | 25 | 57 | | | 2025-02-17 | Senate | Third reading: passed | pass | 37 | 10 | | | 2025-02-13 | Senate | Amendment #1 (Qaddoura) failed | fail | 10 | 36 | | | 2025-02-13 | Senate | Amendment #4 (Young M) failed | fail | 16 | 30 | | | 2025-02-13 | Senate | Amendment #5 (Young M) failed | fail | 9 | 37 | | | 2025-02-13 | Senate | Amendment #3 (Young M) failed | fail | 15 | 31 | | | 2025-02-13 | Senate | Amendment #2 (Young M) failed | fail | 12 | 34 | | ## Actions (50) - 2025-04-15: Signed by the Governor (Senate) - 2025-04-15: Public Law 68 (Senate) - 2025-04-15: Signed by the President of the Senate (Senate) - 2025-04-15: Signed by the President Pro Tempore (Senate) - 2025-04-15: Signed by the Speaker (House) - 2025-04-15: Senate concurred with House amendments; Roll Call 417: yeas 27, nays 22 (Senate) - 2025-04-10: Committee report: Pursuant to Senate Rule 82(e); approved by Rules Committee as amended by the House Committee on Ways and Means. (Senate) - 2025-04-10: Motion to concur filed (Senate) - 2025-04-10: Returned to the Senate with amendments (House) - 2025-04-10: Third reading: passed; Roll Call 433: yeas 65, nays 29 (House) - 2025-04-10: Pursuant to Senate Rule 68(b); reassigned to Committee on Rules and Legislative Procedure (Senate) - 2025-04-09: Amendment #19 (Porter) failed; Roll Call 426: yeas 27, nays 58 (House) - 2025-04-09: Amendment #11 (DeLaney) failed; Roll Call 421: yeas 26, nays 63 (House) - 2025-04-09: Amendment #8 (DeLaney) failed; Roll Call 420: yeas 27, nays 65 (House) - 2025-04-09: Second reading: amended, ordered engrossed (House) - 2025-04-09: Amendment #2 (Pryor) failed; Roll Call 431: yeas 22, nays 65 (House) - 2025-04-09: Amendment #24 (Porter) failed; Roll Call 430: yeas 23, nays 60 (House) - 2025-04-09: Amendment #22 (Porter) failed; Roll Call 429: yeas 25, nays 57 (House) - 2025-04-09: Amendment #26 (Porter) failed; Roll Call 428: yeas 22, nays 59 (House) - 2025-04-09: Amendment #16 (Porter) failed; Roll Call 425: yeas 24, nays 61 (House) - 2025-04-09: Amendment #15 (Porter) failed; Roll Call 424: yeas 25, nays 60 (House) - 2025-04-09: Amendment #14 (Porter) failed; Roll Call 423: yeas 25, nays 62 (House) - 2025-04-09: Amendment #3 (Jackson C) failed; Roll Call 422: yeas 20, nays 68 (House) - 2025-04-09: Amendment #6 (Jackson C) failed; voice vote (House) - 2025-04-09: Amendment #36 (Thompson) prevailed; Roll Call 416: yeas 70, nays 27 (House) - 2025-04-09: Amendment #7 (DeLaney) failed; Roll Call 418: yeas 27, nays 66 (House) - 2025-04-09: Amendment #1 (Campbell) failed; Roll Call 417: yeas 27, nays 64 (House) - 2025-04-09: Amendment #9 (DeLaney) failed; Roll Call 419: yeas 27, nays 64 (House) - 2025-04-09: Amendment #20 (Porter) failed; Roll Call 427: yeas 22, nays 60 (House) - 2025-04-07: Committee report: amend do pass, adopted (House) - 2025-03-03: First reading: referred to Committee on Ways and Means (House) - 2025-02-19: Representatives Snow and Jordan added as cosponsors (House) - 2025-02-18: Representative Clere added as cosponsor (House) - 2025-02-18: Representatives Snow and Jordan removed as cosponsors (House) - 2025-02-18: Referred to the House (Senate) - 2025-02-17: House sponsor: Representative Thompson (Senate) - 2025-02-17: Third reading: passed; Roll Call 132: yeas 37, nays 10 (Senate) - 2025-02-17: Cosponsors: Representatives Snow and Jordan (Senate) - 2025-02-13: Second reading: ordered engrossed (Senate) - 2025-02-13: Amendment #4 (Young M) failed; Roll Call 119: yeas 16, nays 30 (Senate) - 2025-02-13: Amendment #2 (Young M) failed; Roll Call 117: yeas 12, nays 34 (Senate) - 2025-02-13: Amendment #1 (Qaddoura) failed; Roll Call 115: yeas 10, nays 36 (Senate) - 2025-02-13: Amendment #3 (Young M) failed; Roll Call 116: yeas 15, nays 31 (Senate) - 2025-02-13: Amendment #5 (Young M) failed; Roll Call 118: yeas 9, nays 37 (Senate) - 2025-02-11: Committee report: amend do pass, adopted (Senate) - 2025-01-30: Senators Gaskill, Rogers, Buchanan, Johnson T added as coauthors (Senate) - 2025-01-30: Senator Baldwin added as third author (Senate) - 2025-01-30: Senator Garten added as second author (Senate) - 2025-01-14: Authored by Senator Holdman (Senate) - 2025-01-14: First reading: referred to Committee on Tax and Fiscal Policy (Senate) ## Bill text - Engrossed Senate Bill (S): [PDF](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.04.ENGH?format=pdf) - Enrolled Senate Bill (S): [PDF](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.05.ENRH?format=pdf) - Introduced Senate Bill (S): [PDF](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.01.INTR?format=pdf) - Senate Bill (H): [PDF](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.02.COMS?format=pdf), [PDF](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.03.COMH?format=pdf) ## Related bills - SB 231: Various corrections matters. (signed) - SB 324: Criminal procedures. (signed) - SB 80: Code publication. (signed) - SB 453: Various tax matters. (signed) - SB 464: Financial institutions and consumer credit. (signed) - SB 371: Workforce matters. (signed) ## Sources - [Engrossed Senate Bill (S) (PDF)](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.04.ENGH?format=pdf) - [Enrolled Senate Bill (S) (PDF)](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.05.ENRH?format=pdf) - [Introduced Senate Bill (S) (PDF)](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.01.INTR?format=pdf) - [Senate Bill (H) (PDF)](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.02.COMS?format=pdf) - [Senate Bill (H) (PDF)](https://api.iga.in.gov/2025/bills/SB0001/versions/SB0001.03.COMH?format=pdf) ## Related - [SB 231: Various corrections matters.](https://policyrisk.com/state-bill/IN-SB231-2025) - [SB 324: Criminal procedures.](https://policyrisk.com/state-bill/IN-SB324-2025) - [SB 80: Code publication.](https://policyrisk.com/state-bill/IN-SB80-2025) - [SB 453: Various tax matters.](https://policyrisk.com/state-bill/IN-SB453-2025) - [SB 464: Financial institutions and consumer credit.](https://policyrisk.com/state-bill/IN-SB464-2025) - [SB 371: Workforce matters.](https://policyrisk.com/state-bill/IN-SB371-2025) - [Indiana bills](https://policyrisk.com/states/indiana/bills) - [Indiana state hub](https://policyrisk.com/states/indiana) - [All state legislation](https://policyrisk.com/state-bills) Source: PRIA, https://policyrisk.com/state-bill/IN-SB1-2025 (as of 2026-10-17).