(Statehouse) – Indiana’s House of Representatives passed an amended Senate Bill 1 on Thursday, which supporters say would give two-thirds of Hoosier homeowners a lower bill in 2026 compared 2025.
It now returns to the Senate for final action.
“Under this bill, nearly all Hoosiers are going to see property tax relief,” said State Rep. Jeff Thompson (R-Lizton), chair of the House Ways and Means Committee. “This legislation is a massive win for Hoosier homeowners and taxpayers, in the near term and in the future.”
Even though the bill was approved by a vote of 65-29, not everyone saw it the same way as Thompson. One of the people not in favor of the bill was State Rep. Cherrish Pryor (D-Indianapolis).
“People in my community want a true decrease in their taxes, not a decrease in property taxes that is cancelthed out by increased income taxes. Marion County stands to lose $75 million under the current version of SB 1. In order for our community to fund essential public services like police, fire and EMS, as well as public schools for our kids, they will be forced to find the funding elsewhere.”
Assistant Democratic Caucus Chair Ed Delaney criticized what he called “Braun math”, referencing Indiana Governor Mike Braun who supports the amendments to Senate Bill 1.
“Braun math says if I save you a nickel in your left pocket, I can take 15 nickels out of your right pocket. I mean we’ve slashed the overall capacity for local income taxes, but we’ve driven up the usage,” said Delaney on Thursday who voted against the bill.
Indiana Chamber of Commerce President and CEO Vanessa Green Sinders said she’s in favor of it.
“This is a smart, pro-growth reform that will reduce compliance burdens and unlock investment across Indiana. Increasing the minimum threshold and exempting new equipment from the 30% depreciation floor directly benefits small- and medium-sized business owners in every corner of the state. These changes help create a more attractive climate for capital investment and support the continued growth of key industries in Indiana. Modernizing our personal property tax structure is essential to maintaining a competitive edge – particularly as neighboring states work to strengthen their own business environments,” said Sinders.
The amended Senate Bill 1 now includes the following:
-A 10% property tax credit up to $300 on all homestead property tax bills beginning in 2026.
-Additional, stackable credits of $150 for fixed-income seniors and up to $400 for disabled veterans ($150 and $250 stackable credits for those who qualify).
-Decreases the total local income tax rate, reducing the cap from 3.75% to 2.9%, a reduction of $1.9 billion in local income tax revenue capacity.
-Puts stronger controls in place to rein in the $54.3 billion in local government debt.
-Requires referenda to be held during general elections to align with higher voter turnout and increase transparency of referenda questions to better note the tax impact.
-Creates a Property Tax Transparency Portal to allow taxpayers to compare their current tax bill with proposed tax rate changes.
-Exempts more small businesses from paying business personal property tax.
-Saves farmers roughly $125 million over three years by increasing the capitalization/interest rate to 9%, reducing assessed value.
(Story by Network Indiana)
