By Jen Coleson
On May 6, 2025, Indiana Governor Mike Braun signed an omnibus tax bill repealing key provisions of the recently enacted property tax relief bill, L. 2025, S1. The omnibus bill also makes changes to income and sales tax laws. (L. 2025, H1427, effective 05/06/2025, and as stated.)
Income tax.
Expansion of physician tax credit: Effective retroactively to January 1, 2025, the bill expands the physician practice ownership tax credit to include all practicing physicians with an eligible ownership stake in a practice. Previously the credit was only available to primary care providers.
Pass-through entity tax credits: Effective retroactively to January 1, 2025, an electing entity or pass-through entity is permitted to claim a credit for taxes withheld or paid on the entity’s behalf.
Sales tax.
Exemption for agricultural commodities: Effective July 1, 2025, the bill exempts the sales of agricultural commodities by an agricultural commodity trade association if the transaction is conducted at the state fair and the transaction is conducted to make money to carry on the association’s nonprofit purpose. The agricultural commodity trade association must either be registered as a retail merchant or establish that it is not required to be registered as a retail merchant at the time of the transaction.
Property tax.
The bill repeals and revises several of the key provisions included in L. 2025, S1 (as reported in State Tax Update, 04/18/2025). The bill also establishes a partial exemption for employer-provided child care, and creates a property tax credit for community land trust property.
Personal property de minimis exemption: Effective retroactively to January 1, 2025, the bill repeals the increase in the personal property de minimis exemption for the 2025 assessment but keeps in place the increase in the exemption to $2 million for the 2026 assessment date.
Depreciable personal property exception: Effective retroactively to January 1, 2025, the bill modifies the exception for depreciable personal property placed in service after January 1, 2025 by removing an exception exempting depreciable personal property from the 30% minimum valuation floor if the property tax revenue is pledged as payment for bonds, leases, or other obligations.
Property tax deductions for veterans: Effective retroactively to January 1, 2025, the bill repeals the property tax credits for veterans established under L. 2025, S1, and restores the current property tax deductions for veterans which were set to expire in favor of the credits.
Employer child care property tax exemption: Effective January 1, 2026, the bill establishes a partial property tax exemption for employer-provided child care. The portion of the gross assessed value of tangible property owned and used by an employer to provide child care for children of an employer’s employees is exempt from property taxation provided certain conditions are met and the facility is licensed by the division of family resources.
Credit for community land trust property: Effective July 1, 2025, the bill provides a property tax credit for community land trust properties for assessment dates beginning in 2026. Under the bill, qualified owners are eligible for a credit equal to 30% of their net property tax due. The Department of Local Government Finance is responsible for creating a process for qualified owners to claim this credit.
Local taxes.
The bill authorizes multiple local taxing units to impose food and beverage taxes and innkeeper’s taxes.
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