# Indiana SB 243: Various tax matters. Indiana SB 243, Various tax matters., is a Second Regular Session 124th General Assembly (2026) Senate bill sponsored by Travis Holdman (Republican); status signed, last action 2026-03-05 (Public Law 128); PRIA reads it as touching household money (as of 2026-11-01). - Canonical: https://policyrisk.com/state-bill/IN-SB243-2026 - As of: 2026-11-01 - Plain-text twin of the page above; the HTML and this file carry the same facts. ## Facts - Bill: Indiana SB 243 - State: Indiana - Session: Second Regular Session 124th General Assembly (2026) - Title: Various tax matters. - Status: signed - Chamber: Senate - Introduced: 2026-01-12 - Last action: 2026-03-05, Public Law 128 - Sponsor: Travis Holdman (Republican) - Cosponsors: 6 - Subjects: tax and fiscal policy, the house, ways and means - Touches household money: yes - Roll calls: 8 (307 yes, 252 no in all) - Economic provisions PRIA read: 52 ## Summary Amends and adds state income tax statutes to conform with certain provisions enacted in Public Law 119-21 (H.R. 1) (commonly known as One Big Beautiful Bill Act of 2025). Specifies rounding provisions for cash transactions with regard to the penny phaseout. Amends state income tax withholding provisions for gambling winnings. Amends the definition of "contribution" for purpose of the state income tax credit for contributions to an ABLE account. Amends provisions regarding computation of specified research or experimental expenditures. Authorizes the department of state revenue (department) to mail documents electronically through its online tax system. Allows taxpayers to request to receive all documents from the department through the department's online tax system. Makes changes to certain tax warrant procedures. Extends the deadline for filing revenue agent report (RAR) adjustments from 180 days to one year from the Internal Revenue Service's finalization of the federal adjustments. Amends the statute of limitations for issuing assessments and refunds based on an RAR to one year. Adds certain sales tax enforcement provisions regarding motor vehicles, cargo trailers, aircraft, and watercraft. Amends provisions regarding confidentiality of tax information. Makes various changes to the cigarette tax chapter, the petroleum severance tax chapter, and the alcoholic beverage excise tax chapters. Specifies the liability of responsible persons for trust fund taxes. Defines the term "responsible person" with regard to trust fund taxes. Specifies application of the Indiana adoption tax credit. Revises provisions in the pass through entity tax regrading credit for taxes paid to another state. Amends provisions in the tax amnesty program. Specifies the determination of estimated tax penalties. Makes amending changes to the aircraft license excise tax. ## Bill overview: provisions PRIA read - Qualifying aircraft owners get tax credits: benefit, medium. Beginning July 1, 2026, aircraft owners eligible for the property tax deduction under IC 6-1.1-51-10 also qualify for an aircraft tax credit. The credit equals the deduction left after amounts used against property taxes. It cannot exceed the aircraft tax due. For aircraft subject to both personal… - Residents get qualifying car-interest tax relief: benefit, medium. For tax year 2026, Indiana residents can deduct passenger-vehicle loan interest covered by the matching federal deduction. They must be Indiana residents when the interest is paid or accrued. Estates and trusts cannot claim this deduction. For joint filers, eligibility follows the spouse treated as… - Tax amnesty clears penalties and liens: benefit, medium. Indiana offers amnesty for covered unpaid taxes from periods ending before January 1, 2024. Prior participants in the named amnesty programs and specified wagering-tax cases are excluded. Taxpayers must pay all covered taxes for the period, accept the required written terms, and agree not to seek a… - Taxpayers gain routes to erase warrants: benefit, medium. Beginning July 1, 2026, taxpayers can request tax-warrant expungement through routes involving warrant age, litigation status, resolved debts, or compliance history. The compliance-based discretionary route requires five years of timely filing and payment or resolution of outstanding state tax issu… - Workers get a temporary overtime deduction: benefit, medium. For tax year 2026, workers claiming the federal qualified-overtime deduction can also deduct that amount from Indiana income. The state deduction is reduced proportionally if only part of that qualified pay is included in Indiana income. This does not make all overtime pay tax-free. - Workers get a temporary tip deduction: benefit, medium. For tax year 2026, taxpayers who claim the federal qualified-tip deduction can also deduct that amount from Indiana income. The state deduction is reduced proportionally if only part of those tips is included in Indiana income. This lowers taxable income, not the tax bill dollar for dollar. - Business owners gain interstate tax credits: benefit, medium. For tax years beginning after December 31, 2024, electing pass-through businesses can claim credits for resident direct owners' qualifying out-of-state income. The business must elect to tax those owners, and the other state must offer its residents a substantially similar credit. The credit uses t… - Businesses gain clearer overpaid-tax refund rules: benefit, medium. Beginning July 1, 2026, refunds of overpaid trust taxes, penalties, and interest are split between businesses and responsible people. The split reflects what each paid and the business's unpaid balance. An agreed split cannot exceed amounts attributable to the parties or what a party actually paid.… - Cash tax payments round down: benefit, low. Beginning January 1, 2027, state and local tax amounts paid in cash round down to a multiple of five cents. Tax amounts below five cents become zero. Agents and trustees calculate collected or withheld taxes before rounding. Remittances use the combined tax on one form or separate totals by tax typ… - Gambling withholding limits track federal inflation: benefit, low. Beginning in 2027, Indiana's listed gambling and prize withholding thresholds adjust when the federal reporting amount rises for inflation. This covers slot-machine winnings, keno, lottery prizes, and prizes from qualified organizations. Keno winnings are measured after subtracting the wager. The l… - Higher withholding thresholds for gambling winners: benefit, low. Beginning January 1, 2026, Indiana withholding starts at $2,000 for slot winnings and keno winnings after subtracting the wager. Lottery prizes and prizes from qualified organizations trigger withholding only when their value exceeds $2,000. The slot threshold rises from $1,200; the keno threshold… - Taxpayers gain time after federal changes: benefit, low. For federal tax changes made after December 31, 2025, taxpayers have one year to notify Indiana. An Indiana amended return is also required when the change affects federal or Indiana adjusted gross income. A separate refund deadline grows from 180 days to one year after an IRS modification or audit… - Reliable cigarette distributors avoid bond requirements: benefit, low. Cigarette distributors with at least five consecutive years of good credit standing with Indiana need no bond or letter of credit. The waiver applies to the security otherwise required for tax-stamp payments. - Sellers exclude required retail price adjustments: benefit, low. Beginning January 1, 2027, sellers exclude amounts added or subtracted to comply with Indiana Code 23-15-13 from gross retail income. These specific price adjustments do not enter the retail tax base. The rule creates no separate tax break for buyers. - Banks gain longer federal-change reporting deadlines: benefit, low. Financial institutions taxpayers have one year, rather than 180 days, to notify Indiana about covered federal return changes. The rule concerns tax years beginning after December 31, 1988. Changes affecting federal adjusted gross income or Indiana income require an amended Indiana return and a copy… - Cigarette sellers get targeted tax exemptions: benefit, low. Beginning July 1, 2026, cigarette sales to the federal government, its agencies, and instrumentalities are exempt from Indiana cigarette tax. Shipments leaving Indiana and not returning also qualify, and distributors must prove the exemption. Sales within Indiana to individuals, private stores, or… - Partnership entities gain adjustment reporting time: benefit, low. Covered tier-one entities have one year to report a final federal adjustment determined after December 31, 2025. For determinations before January 1, 2026, the deadline remains 180 days. This gives affected partnership entities more reporting time without changing the tax amount. - Business tax handlers face personal liability: cost, high. Beginning July 1, 2026, covered taxes collected, withheld, or held for Indiana become state property when received or accrued. Sole proprietors, employees, contractors, officers, and members with a duty to remit trust taxes can be responsible persons. Responsibility is decided separately for each t… - Out-of-state vehicle arrangements face tax scrutiny: cost, medium. Indiana presumes tax evasion in specified vehicle arrangements involving out-of-state closely held businesses and registration in states without equivalent sales taxes. A related presumption affects recreational-vehicle and cargo-trailer exemptions involving owners from Indiana or nonreciprocal sta… - Some forgiven student debt remains taxable: cost, medium. For tax years ending in 2021 through 2025, some federally excluded student loan forgiveness must be added to Indiana income. The federal insolvency exclusion takes priority and avoids this add-back for amounts it covers. Amounts covered by the student-debt exclusion as it stood on January 1, 2020,… - Unpaid amnesty debts bring added penalties: cost, medium. The amnesty penalty rule covers eligible listed-tax debts for periods ending before January 1, 2023. Eligible taxpayers face an added penalty unless they pay in full through an accepted written payment program or before amnesty ends. The added penalty equals the sum of the specified penalties impos… - Businesses face limits on equipment write-offs: cost, medium. Indiana does not allow federal bonus depreciation under Section 168(k) in the year property enters service. Retroactive to July 4, 2025, businesses claiming the federal special allowance for qualified production property must remove its Indiana effect. They must calculate Indiana income as though t… - Overdue education loans allow data sharing: cost, low. Indiana’s Department of Revenue can share personal records with an institution that proves a borrower owes it overdue education loans. Records include the borrower’s name, address, Social Security number, and place of employment. Approved postsecondary schools receive the information free. Fees for… - Aircraft owners must prove exemption eligibility: cost, low. Beginning July 1, 2026, Indiana residents who are not aircraft dealers must provide proof for this registration and tax exemption. The aircraft must never be based in Indiana, with evidence satisfactory to the Department of Revenue. Owners must file the required form no later than 31 days after pur… - Estimated tax shortfalls face statutory penalties: cost, low. Individuals who underpay required Indiana estimated taxes face the penalty rate set by the law's cross-reference. Corporations face that rate when they fail to make required estimated payments. This provision does not state the penalty percentage. - Indiana gets longer to assess taxes: cost, low. Beginning January 1, 2026, Indiana has one year after a taxpayer reports a covered federal income or tax change to propose an income-tax assessment. The previous deadline was six months. The extension applies to the federal changes covered by the listed Indiana tax-reporting rules. - More access to protected taxpayer information: cost, low. The governor's designee can receive confidential tax information for official work and must keep it confidential. Other U.S. tax jurisdictions can request information without certification, but must provide reciprocal sharing and use it confidentially for tax collection. Revenue officials can proac… - Linked violations can block carrier registration: cost, low. Indiana can deny covered motor carrier registrations based on violations by people operating, managing, controlling, or affiliated with the business. Grounds include failures to file returns or pay taxes, penalties, or interest. They also include vehicle-fee or license-plate violations, an unsatisf… - Alcohol businesses face tighter tax relief: cost, low. Beginning July 1, 2026, eligible alcohol taxpayers lose the timely-payment discount unless they pay the full tax by its due date. Beer wholesalers retain refunds for tax-paid beer and flavored malt beverages shipped from Indiana for out-of-state sale. Refund eligibility ends for those products sold… - Banks face penalties for missed taxes: cost, low. Beginning July 1, 2026, Indiana assesses penalties for failing to make required financial institutions tax payments. The penalty uses the rate set in Indiana Code 6-8.1-10-2.1(b). This provision does not state that rate or change the underlying payment duties. - Cigarette businesses face stricter stamp rules: cost, low. Beginning July 1, 2026, Indiana collects cigarette tax from the first person selling, using, consuming, handling, or distributing cigarettes in-state. The law removes language assigning final liability to retail buyers and allowing separate tax statements. It also repeals special rules for stamps b… - Corporations lose a foreign-income tax deduction: cost, low. Corporations must add back their federal Section 250(a)(1)(B) deduction to the extent it relates to net controlled-foreign-corporation tested income. This increases Indiana taxable income for corporations claiming that deduction. The law states no fixed added tax amount. - Longer tax review window for partnerships: cost, low. Beginning January 1, 2026, Indiana’s Department of Revenue has one year, rather than 180 days, to issue proposed partnership adjustment reports. The deadline runs from receipt of the partnership’s final federal adjustments. The same one-year deadline covers reports to partners that are themselves p… - Ownership changes limit business loss deductions: cost, low. For tax years beginning after December 31, 2022, covered ownership changes limit Indiana loss deductions using federal Section 382. The general cap equals the federal limit times Indiana's apportionment percentage, with proration around the ownership-change date. Carryforwards are adjusted for inco… - Petroleum taxes follow production and buyers: cost, low. Beginning July 1, 2026, Indiana taxes petroleum production at the greater of 1% of value or the applicable volume rate. That rate is $0.03 per 1,000 cubic feet of natural gas or $0.24 per barrel of oil; specified nontaxable events are excluded. Unpaid tax liens, penalties, and interest follow the p… - Tougher penalties for cigarette tax violations: cost, low. Beginning July 1, 2026, knowingly selling or offering cigarettes with fake or previously used tax stamps is a Level 5 felony. Knowingly attaching those stamps is also a Level 5 felony. Starting that date, Indiana can suspend or revoke distributors’ registrations for cigarette-tax violations or fail… - Tax liens reach property statewide: mixed, high. Beginning July 1, 2026, a tax warrant recorded as a judgment creates a lien on property and legal claims statewide. The department can file warrants where the taxpayer lives, is domiciled, or owns property. Marion County filing is allowed when the taxpayer has no Indiana property or the department… - Disability savings credits gain timing options: mixed, medium. Indiana's ABLE savings credit equals 20% of eligible contributions, capped at $500 and remaining tax liability; unused credit does not carry forward. Qualified rollovers described in the law do not count. For contributions made after December 31, 2023, contributors can assign money to the prior tax… - Business losses offset income within limits: mixed, medium. Qualifying residents can deduct unused Indiana net operating losses; corporations and nonresidents use eligible Indiana-source losses against Indiana-source income. Deductions cannot exceed unused carryovers or applicable adjusted gross income before the deduction. Losses must be used in the earlie… - Businesses get separate research deduction rules: mixed, medium. For tax years beginning after December 31, 2021, Indiana generally allows deductions for specified research costs federal law requires to be capitalized. Taxpayers must add back related federal deductions, and basis and passive-income limits apply; disallowed amounts carry forward. Covered costs di… - Indiana updates its federal tax baseline: mixed, medium. Indiana generally uses the federal tax code as it stood January 1, 2026, replacing its January 1, 2023 baseline. Three rules instead use federal law from July 4, 2025: Sections 23, 168(e)(3)(B)(vi), and 223(c)(2)(E). Tax effects vary across individuals, businesses, trusts, and estates because India… - Cash purchases face five-cent rounding: mixed, low. The specified cash-transaction rules apply from January 1, 2027, through January 1, 2030. Businesses must round totals payable to them to a five-cent increment when the cents digit is not 0 or 5. Rounding can be down, up, or to the nearest increment; amounts under five cents may stay unchanged or b… - Lien releases require separate county filings: mixed, low. Beginning July 1, 2026, taxpayers seeking lien release by affidavit must file where the warrant was filed. They must first notify the department in writing to foreclose and wait more than 180 days without a foreclosure action. The affidavit must state that no foreclosure is pending and no unsatisfi… - Business transfers reshape personal tax liability: mixed, low. Beginning March 31, 2026, bulk business transfers preserve liability for a seller's responsible person, not just a responsible officer. This covers taxes, interest, and penalties when successor liability applies. Owners, shareholders, directors, officers, and employees of the buyer are excluded fro… - Partners face revised federal audit treatment: mixed, low. Indiana treats covered federal partnership audit adjustments as changes to partners' federal taxable income, adjusted gross income, or tax liability. The specified federal partnership rule does not apply for these Indiana purposes. The law sets no new tax rate or fixed payment amount. - Some nonresident owners avoid separate returns: mixed, low. Full-year nonresidents count as having filed for specified Indiana tax purposes with no Indiana income or only pass-through income. They cannot request reduced pass-through withholding, and every relevant business must include them on its required composite return. Both spouses must qualify when th… - Alcohol businesses face revised tax collection: mixed, low. Beginning July 1, 2026, alcohol is taxed once at its first sale or withdrawal for sale. A beverage subject to wine excise tax cannot also face liquor excise tax. Payment falls to the primary supplier selling into Indiana, an Indiana wholesaler receiving out-of-state supply, or a permit holder selli… - Alcohol tax relief excludes stolen stock: mixed, low. Beginning July 1, 2026, alcohol intended for export to another state is exempt from Indiana alcohol excise tax. Federal government and military-facility purchases also qualify, but sales to individuals, private stores, and concessionaires on federal land do not. Taxpayers retaining required proof c… - Cigarette sellers face revised compliance duties: mixed, low. Beginning July 1, 2026, the law removes distributors' receipt-time stamping duties and retailers' duties to stamp unstamped deliveries. Distributors must include shipment invoices and keep duplicates; retailers must keep invoices for at least two weeks. Distributors must keep complete records for t… - Financial institutions adjust production-property income taxes: mixed, low. Effective July 4, 2025, covered financial institutions must adjust income for qualified production property under Indiana's rules. The required addition or subtraction can raise or lower the income used to calculate financial institutions tax. The provision does not state a fixed tax change. - Marketplace tax relief leaves buyers liable: mixed, low. For calendar years beginning after December 31, 2021, marketplace facilitators receive relief from uncollected sales and use tax liability. The facilitator and seller must be unaffiliated, and incorrect or insufficient seller information must cause the failure. The facilitator must maintain an accu… - Petroleum taxpayers get exclusions and duties: mixed, low. Beginning July 1, 2026, petroleum buyers and holders, including gatherers, take reporting and payment responsibility at sale or delivery from production. Buyers and gatherers must report and remit monthly by the last day of the following month. Reports identify volumes, tax calculations, owners, pr… ## Sponsors and cosponsors - Sponsor: Travis Holdman (Republican), Senate - Cosponsor: Craig Snow (Republican), House - Cosponsor: Dan Dernulc (Republican), Senate - Cosponsor: Jeffrey Thompson (Republican), House - Cosponsor: Linda Rogers (Republican), Senate - Cosponsor: Ron Alting (Republican), Senate - Cosponsor: Scott Baldwin (Republican), Senate ## Roll call votes | Date | Chamber | Motion | Result | Yes | No | Other | | --- | --- | --- | --- | --- | --- | --- | | 2026-02-25 | Senate | Senate concurred with House amendments | pass | 47 | 0 | | | 2026-02-23 | House | Third reading: passed | pass | 78 | 18 | | | 2026-02-19 | House | Amendment #2 (DeLaney) failed | fail | 31 | 63 | | | 2026-02-19 | House | Amendment #1 (Hamilton) failed | fail | 38 | 56 | | | 2026-02-19 | House | Amendment #3 (DeLaney) failed | fail | 35 | 58 | | | 2026-01-28 | Senate | Third reading: passed | pass | 47 | 1 | | | 2026-01-26 | Senate | Amendment #6 (Young M) failed | fail | 11 | 32 | | | 2026-01-26 | Senate | Amendment #4 (Young M) failed | fail | 20 | 24 | | ## Actions (33) - 2026-03-05: Public Law 128 (Senate) - 2026-03-05: Signed by the Governor (Senate) - 2026-02-27: Signed by the President Pro Tempore (Senate) - 2026-02-27: Signed by the Speaker (House) - 2026-02-27: Signed by the President of the Senate (Senate) - 2026-02-25: Senate concurred with House amendments; Roll Call 285: yeas 47, nays 0 (Senate) - 2026-02-24: Returned to the Senate with amendments (House) - 2026-02-24: Motion to concur filed (Senate) - 2026-02-23: Third reading: passed; Roll Call 310: yeas 78, nays 18 (House) - 2026-02-19: Second reading: amended, ordered engrossed (House) - 2026-02-19: Amendment #3 (DeLaney) failed; Roll Call 288: yeas 35, nays 58 (House) - 2026-02-19: Amendment #7 (Thompson) prevailed; voice vote (House) - 2026-02-19: Amendment #1 (Hamilton) failed; Roll Call 287: yeas 38, nays 56 (House) - 2026-02-19: Amendment #5 (Thompson) prevailed; voice vote (House) - 2026-02-19: Amendment #2 (DeLaney) failed; Roll Call 289: yeas 31, nays 63 (House) - 2026-02-17: Committee report: amend do pass, adopted (House) - 2026-02-02: First reading: referred to Committee on Ways and Means (House) - 2026-01-29: Referred to the House (Senate) - 2026-01-28: Senator Alting added as coauthor (Senate) - 2026-01-28: Third reading: passed; Roll Call 122: yeas 47, nays 1 (Senate) - 2026-01-28: House sponsor: Representative Thompson (Senate) - 2026-01-28: Cosponsor: Representative Snow (Senate) - 2026-01-26: Amendment #2 (Yoder) failed; voice vote (Senate) - 2026-01-26: Amendment #6 (Young M) failed; Roll Call 67: yeas 11, nays 32 (Senate) - 2026-01-26: Amendment #5 (Young M) failed; voice vote (Senate) - 2026-01-26: Amendment #4 (Young M) failed; Roll Call 66: yeas 20, nays 24 (Senate) - 2026-01-26: Second reading: ordered engrossed (Senate) - 2026-01-26: Senator Rogers added as third author (Senate) - 2026-01-20: Committee report: amend do pass, adopted (Senate) - 2026-01-15: Senator Dernulc added as coauthor (Senate) - 2026-01-15: Senator Baldwin added as second author (Senate) - 2026-01-12: First reading: referred to Committee on Tax and Fiscal Policy (Senate) - 2026-01-12: Authored by Senator Holdman (Senate) ## Bill text - Engrossed Senate Bill (S): [PDF](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.04.ENGH?format=pdf) - Enrolled Senate Bill (S): [PDF](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.05.ENRH?format=pdf) - Introduced Senate Bill (S): [PDF](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.01.INTR?format=pdf) - Senate Bill (H): [PDF](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.02.COMS?format=pdf), [PDF](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.03.COMH?format=pdf) ## Related bills - SB 239: Various education matters. (signed) - SB 204: Various education matters. (signed) - SB 179: Indiana department of transportation. (signed) - SB 185: Alcohol and tobacco matters. (signed) - SB 80: Code publication. (signed) - HB 1424: Farm and homestead food sales. (signed) ## Sources - [Engrossed Senate Bill (S) (PDF)](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.04.ENGH?format=pdf) - [Enrolled Senate Bill (S) (PDF)](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.05.ENRH?format=pdf) - [Introduced Senate Bill (S) (PDF)](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.01.INTR?format=pdf) - [Senate Bill (H) (PDF)](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.02.COMS?format=pdf) - [Senate Bill (H) (PDF)](https://api.iga.in.gov/2026/bills/SB0243/versions/SB0243.03.COMH?format=pdf) ## Related - [SB 239: Various education matters.](https://policyrisk.com/state-bill/IN-SB239-2026) - [SB 204: Various education matters.](https://policyrisk.com/state-bill/IN-SB204-2026) - [SB 179: Indiana department of transportation.](https://policyrisk.com/state-bill/IN-SB179-2026) - [SB 185: Alcohol and tobacco matters.](https://policyrisk.com/state-bill/IN-SB185-2026) - [SB 80: Code publication.](https://policyrisk.com/state-bill/IN-SB80-2026) - [HB 1424: Farm and homestead food sales.](https://policyrisk.com/state-bill/IN-HB1424-2026) - [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-SB243-2026 (as of 2026-11-01).