LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6734 NOTE PREPARED: Dec 28, 2023
BILL NUMBER: HB 1363 BILL AMENDED:
SUBJECT: Elimination of Sales Tax on Utility Service.
FIRST AUTHOR: Rep. Porter BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: The bill provides a Sales Tax exemption for utility services.
Effective Date: July 1, 2024.
Explanation of State Expenditures: The Department of State Revenue (DOR) will incur additional
expenses to revise tax forms, instructions, and computer programs to reflect the changes made by the bill.
The DOR’s current level of resources should be sufficient to implement these changes.
Explanation of State Revenues: Summary - This provision is estimated to reduce state revenues beginning
in FY 2025. The estimated revenue loss is $730 M to $770 M in FY 2025 and $820 M to $885 M in FY 2026.
Sales Tax revenue is distributed to the General Fund (99.838%), Commuter Rail Service Fund (0.131%), and
Industrial Rail Service Fund (0.031%).
Additional Information - The estimated revenue loss is based on DOR Sales Tax data and recent trends in
energy prices and Sales Tax collections on utilities. In FY 2023, utility providers remitted approximately
$760 M in Sales Tax. The estimated revenue loss range assumes that currently taxable utility sales will
increase by 2.5% to 5% each year. Energy prices in Indiana grew by about 2.5% annually from 2018 through
2021. Sales Tax revenue collected by utilities increased by about 5% annually between FY 2019 and FY
2023. The FY 2025 estimate assumes that revenue will be impacted beginning in August 2024.
Explanation of Local Expenditures:
Explanation of Local Revenues:
HB 1363 1 State Agencies Affected: Department of State Revenue.
Local Agencies Affected:
Information Sources: Department of State Revenue; Table ET1. Primary Energy, Electricity, and Total
Energy Price and Expenditure Estimates, Selected Years, 1970-2021, Indiana:
https://www.eia.gov/state/seds/seds-data-complete.php.
Fiscal Analyst: Chris Baker, 317-232-9851.
HB 1363 2