LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7060 NOTE PREPARED: Jan 4, 2025
BILL NUMBER: HB 1219 BILL AMENDED:
SUBJECT: Taxation of Grain Processing Equipment.
FIRST AUTHOR: Rep. Culp BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill provides an assessed value deduction for eligible grain processing
equipment equal to 100% of the assessed value for assessment dates beginning in 2026. However, it limits
the deduction to 10 consecutive years in the case of an owner of the equipment who is a grain buyer or
warehouse subject to licensing by the Indiana grain buyers and warehouse licensing agency.
This bill also provides a Sales Tax exemption for equipment used in storing, drying, moving, removing, and
handling agriculturally cultivated grain crops.
Effective Date: July 1, 2025; January 1, 2026.
Explanation of State Expenditures: Department of Local Government Finance (DLGF): This bill will
require the DLGF to issue updated guidance to local assessors and county auditors regarding the eligible
grain processing equipment that qualifies for the property tax deduction. The bill’s requirements are within
the agency’s routine administrative functions and should be able to be implemented with no additional
appropriations, assuming near customary agency staffing and resource levels.
Department of State Revenue (DOR): The 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: Sales Tax Exemption for Grain Processing Equipment: The bill would
reduce Sales Tax revenue by an indeterminable amount beginning in FY 2026. The bill provides a Sales Tax
exemption if equipment is purchased for storing, drying, moving, removing, and handling agriculturally
cultivated grain crops and is used directly in the drying, handling, and storage of agriculturally cultivated
grain crops for commercial purposes. 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 - Under current law, agricultural machinery, tools, and equipment (including material
handling equipment purchased for the purpose of transporting materials into the production process from an
HB 1219 1 onsite location) are exempt if they are acquired for direct use in the direct production, extraction, harvesting,
or processing of agricultural commodities. The bill would reduce revenue to the extent that equipment used
directly in the drying, handling, and storage of grain does not qualify for the exemption in current law.
Explanation of Local Expenditures: The bill’s requirements will result in an increase in the administrative
workload for local assessors and county auditors since they will need to keep track within their property
assessment and property tax software systems the duration of the exemption for those businesses that are
subject to licensing under IC 26-3-7.
Explanation of Local Revenues: Property Tax Deduction: This bill establishes a property tax deduction
equal to 100% of the assessed value for certain eligible grain processing equipment. The deduction on the
equipment would be limited to 10 years if it pertains to a property owner who is subject to licensing under
IC 26-3-7. The deduction would result in a shift of property taxes from those property owners eligible to
receive the deduction to all other properties starting with taxes payable in CY 2027. Additionally, assuming
that property tax levies are either static or increase, local units of government could potentially experience
an increase in property tax cap circuit breaker losses as a result of the assessed value base being reduced from
this deduction. The magnitude of the shift, as well as any potential increase in property tax cap circuit
breaker losses, would vary from county to county and would be contingent on several factors, including the
total assessed value of the eligible grain processing equipment properties in each county.
Additional Information - The quantity and cost of individual assets that are part of individual business
personal property returns is not publically disclosable information. So, it is not possible to discern the amount
of eligible grain processing equipment that would be subject to this deduction. However, in a broader
context, for CY 2024, there are 12,375 business personal property records statewide that were categorized
under Oilseed and Grain Combination Farming or All Other Grain Farming (using the North American
Industry Classification System). These records have a total assessed value of approximately $1.64 B and a
total property tax liability of approximately $25.9 M.
State Agencies Affected: Department of Local Government Finance; Department of State Revenue.
Local Agencies Affected: Local assessors; County auditors; Local taxing units.
Information Sources: Pay 2024 county personal property assessment and property tax data.
Fiscal Analyst: James Johnson, 317-232-9869; Qian Li, 317-232-9671.
HB 1219 2