All Roll Calls
Yes: 137 • No: 0
IndianaSB 259Second Regular Session 124th General Assembly (2026)SenateWALLET
Partnership composite returns.
Sponsored By: Scott Baldwin (Republican)
Became Law
tax and fiscal policythe houseways and means
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
Lower withholding when pass-through tax paid
If your partnership, corporation, trust, or estate credits you with Indiana pass-through entity tax, it must cut your required Indiana withholding by that credit. Withholding cannot go below $0. This leaves you with more cash when you get distributions.
20% penalty for missed withholding
Partnerships, qualifying corporations, and trusts that fail to withhold and pay required Indiana tax owe a penalty equal to 20% of the tax that should have been withheld. This is on top of other penalties.
Composite returns required for nonresidents
Partnerships, certain corporations, and trusts must file one Indiana composite return for all nonresident owners or beneficiaries. Every nonresident must be included, even if they have other Indiana income. Leaving off required people triggers a $500 penalty per pass-through entity.
Penalty relief for small partnerships
Beginning January 1, 2025, a late or incomplete Indiana partnership return is presumed to be for reasonable cause if all rules are met. The partnership has 10 or fewer partners (a married couple filing jointly counts as one). All partners are natural persons or their estates, and none are nonresident aliens. Each partner’s share is the same across all items. The partnership did not elect federal centralized audit rules, and all partners reported their shares on time.
Start date for new pass-through rules
The amended withholding, composite, and penalty rules apply to pass-through returns due after this law passed. Returns filed on extension are included.
Sponsors & Cosponsors
Sponsor
Scott Baldwin
Republican • Senate
Cosponsors
Craig Snow
Republican • House
Lonnie Randolph
Democratic • Senate
Travis Holdman
Republican • Senate
Roll Call Votes
House vote • 2/23/2026
Roll Call 311 on SB0259.03.COMH
Yes: 93 • No: 0 • Other: 2
Senate vote • 1/26/2026
Roll Call 83 on SB0259.02.COMS
Yes: 44 • No: 0
Actions Timeline
Public Law 48
3/3/2026SenateSigned by the Governor
3/3/2026SenateSigned by the President of the Senate
2/26/2026SenateSigned by the Speaker
2/25/2026HouseReturned to the Senate without amendments
2/24/2026HouseSigned by the President Pro Tempore
2/24/2026SenateThird reading: passed; Roll Call 311: yeas 93, nays 0
2/23/2026HouseSecond reading: ordered engrossed
2/19/2026HouseCommittee report: do pass, adopted
2/17/2026HouseFirst reading: referred to Committee on Ways and Means
1/28/2026HouseReferred to the House
1/27/2026SenateSenator Holdman added as second author
1/26/2026SenateThird reading: passed; Roll Call 83: yeas 44, nays 0
1/26/2026SenateHouse sponsor: Representative Snow
1/26/2026SenateSecond reading: ordered engrossed
1/22/2026SenateCommittee report: amend do pass, adopted
1/20/2026SenateSenator Randolph added as coauthor
1/15/2026SenateFirst reading: referred to Committee on Tax and Fiscal Policy
1/8/2026SenateAuthored by Senator Baldwin
1/8/2026Senate
Bill Text
Enrolled Senate Bill (S)
Introduced Senate Bill (S)
Senate Bill (H)
Senate Bill (S)