Introduced Version
SENATE BILL No. 345
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-1.1; IC 12-8-1.5-21.
Synopsis: Property tax matters. Amends the property tax exemption
for property used by a for-profit provider of early childhood education,
including by requiring the provider to offer age appropriate curriculum
and by excluding from the exemption tangible property that has been
granted a homestead standard deduction. Provides a partial property tax
exemption for an employer that provides child care on the employer's
property for the employer's employees, and for the employees of
another business if the employer and the other business enter into an
agreement that outlines the terms under which the child care is to be
provided. Specifies the conditions that must be met to obtain the partial
property tax exemption. Requires the office of the secretary of family
and social services, in consultation with the early learning advisory
committee, to: (1) evaluate and make recommendations; and (2) submit
a report; regarding child care. Amends the maximum levy growth
quotient to base the six year average calculation on the yearly wage
growth for state and local government employees in Indiana and the
annual increase in the Consumer Price Index. Requires the true tax
value of a privately owned wastewater facility to be determined by
applying the income capitalization approach. Provides that, if the
application of the income capitalization method for an assessment year
results in a zero or negative assessment, the privately owned
wastewater facility is exempt from property taxation for that
assessment year. Requires assessing officials in an assessment of
residential deed restricted property to only use or consider sales of
other residential deed restricted property as a comparable sale property
for purposes of a sales comparison analysis.
Effective: July 1, 2025; January 1, 2026.
Rogers, Gaskill, Buchanan
January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
2025 IN 345—LS 7020/DI 120 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
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Additions: Whenever a new statutory provision is being enacted (or a new constitutional
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a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 345
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-1.1-4-43.7 IS ADDED TO THE INDIANA
2 CODE AS A NEW SECTION TO READ AS FOLLOWS
3 [EFFECTIVE JANUARY 1, 2026]: Sec. 43.7. (a) As used in this
4 section, "residential deed restricted property" means a single
5 family home that is available for sale and sold only to buyers with
6 moderate to low incomes, by conveyance of a deed containing
7 restrictions, such as guidelines limiting the subsequent sale of the
8 property to another buyer with moderate to low income or a first
9 right of refusal retained by the buyer.
10 (b) In determining the true tax value of residential deed
11 restricted property using a sales comparison approach or other
12 approaches to value that can use the identification of comparable
13 sale properties, assessing officials shall only use or consider sales
14 of other residential deed restricted property as a comparable sale
15 property for purposes of a sales comparison analysis.
16 SECTION 2. IC 6-1.1-10-16, AS AMENDED BY P.L.85-2019,
17 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2025 IN 345—LS 7020/DI 120 2
1 JANUARY 1, 2026]: Sec. 16. (a) All or part of a building is exempt
2 from property taxation if it is owned, occupied, and used by a person
3 for educational, literary, scientific, religious, or charitable purposes.
4 (b) A building is exempt from property taxation if it is owned,
5 occupied, and used by a town, city, township, or county for educational,
6 literary, scientific, fraternal, or charitable purposes.
7 (c) A tract of land, including the campus and athletic grounds of an
8 educational institution, is exempt from property taxation if:
9 (1) a building that is exempt under subsection (a) or (b) is situated
10 on it;
11 (2) a parking lot or structure that serves a building referred to in
12 subdivision (1) is situated on it; or
13 (3) the tract:
14 (A) is owned by a nonprofit entity established for the purpose
15 of retaining and preserving land and water for their natural
16 characteristics;
17 (B) does not exceed five hundred (500) acres; and
18 (C) is not used by the nonprofit entity to make a profit.
19 (d) A tract of land is exempt from property taxation if:
20 (1) it is purchased for the purpose of erecting a building that is to
21 be owned, occupied, and used in such a manner that the building
22 will be exempt under subsection (a) or (b); and
23 (2) not more than four (4) years after the property is purchased,
24 and for each year after the four (4) year period, the owner
25 demonstrates substantial progress and active pursuit towards the
26 erection of the intended building and use of the tract for the
27 exempt purpose. To establish substantial progress and active
28 pursuit under this subdivision, the owner must prove the existence
29 of factors such as the following:
30 (A) Organization of and activity by a building committee or
31 other oversight group.
32 (B) Completion and filing of building plans with the
33 appropriate local government authority.
34 (C) Cash reserves dedicated to the project of a sufficient
35 amount to lead a reasonable individual to believe the actual
36 construction can and will begin within four (4) years.
37 (D) The breaking of ground and the beginning of actual
38 construction.
39 (E) Any other factor that would lead a reasonable individual to
40 believe that construction of the building is an active plan and
41 that the building is capable of being completed within eight (8)
42 years considering the circumstances of the owner.
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1 If the owner of the property sells, leases, or otherwise transfers a tract
2 of land that is exempt under this subsection, the owner is liable for the
3 property taxes that were not imposed upon the tract of land during the
4 period beginning January 1 of the fourth year following the purchase
5 of the property and ending on December 31 of the year of the sale,
6 lease, or transfer. The county auditor of the county in which the tract
7 of land is located may establish an installment plan for the repayment
8 of taxes due under this subsection. The plan established by the county
9 auditor may allow the repayment of the taxes over a period of years
10 equal to the number of years for which property taxes must be repaid
11 under this subsection.
12 (e) Personal property is exempt from property taxation if it is owned
13 and used in such a manner that it would be exempt under subsection (a)
14 or (b) if it were a building.
15 (f) A hospital's property that is exempt from property taxation under
16 subsection (a), (b), or (e) shall remain exempt from property taxation
17 even if the property is used in part to furnish goods or services to
18 another hospital whose property qualifies for exemption under this
19 section.
20 (g) Property owned by a shared hospital services organization that
21 is exempt from federal income taxation under Section 501(c)(3) or
22 501(e) of the Internal Revenue Code is exempt from property taxation
23 if it is owned, occupied, and used exclusively to furnish goods or
24 services to a hospital whose property is exempt from property taxation
25 under subsection (a), (b), or (e).
26 (h) This section does not exempt from property tax an office or a
27 practice of a physician or group of physicians that is owned by a
28 hospital licensed under IC 16-21-2 or other property that is not
29 substantially related to or supportive of the inpatient facility of the
30 hospital unless the office, practice, or other property:
31 (1) provides or supports the provision of charity care (as defined
32 in IC 16-18-2-52.5), including providing funds or other financial
33 support for health care services for individuals who are indigent
34 (as defined in IC 16-18-2-52.5(b) and IC 16-18-2-52.5(c)); or
35 (2) provides or supports the provision of community benefits (as
36 defined in IC 16-21-9-1), including research, education, or
37 government sponsored indigent health care (as defined in
38 IC 16-21-9-2).
39 However, participation in the Medicaid or Medicare program alone
40 does not entitle an office, practice, or other property described in this
41 subsection to an exemption under this section.
42 (i) A tract of land or a tract of land plus all or part of a structure on
2025 IN 345—LS 7020/DI 120 4
1 the land is exempt from property taxation if:
2 (1) the tract is acquired for the purpose of erecting, renovating, or
3 improving a single family residential structure that is to be given
4 away or sold:
5 (A) in a charitable manner;
6 (B) by a nonprofit organization; and
7 (C) to low income individuals who will:
8 (i) use the land as a family residence; and
9 (ii) not have an exemption for the land under this section;
10 (2) the tract does not exceed three (3) acres; and
11 (3) the tract of land or the tract of land plus all or part of a
12 structure on the land is not used for profit while exempt under this
13 section.
14 (j) An exemption under subsection (i) terminates when the property
15 is conveyed by the nonprofit organization to another owner.
16 (k) When property that is exempt in any year under subsection (i) is
17 conveyed to another owner, the nonprofit organization receiving the
18 exemption must file a certified statement with the auditor of the county,
19 notifying the auditor of the change not later than sixty (60) days after
20 the date of the conveyance. The county auditor shall immediately
21 forward a copy of the certified statement to the county assessor. A
22 nonprofit organization that fails to file the statement required by this
23 subsection is liable for the amount of property taxes due on the
24 property conveyed if it were not for the exemption allowed under this
25 chapter.
26 (l) If property is granted an exemption in any year under subsection
27 (i) and the owner:
28 (1) fails to transfer the tangible property within eight (8) years
29 after the assessment date for which the exemption is initially
30 granted; or
31 (2) transfers the tangible property to a person who:
32 (A) is not a low income individual; or
33 (B) does not use the transferred property as a residence for at
34 least one (1) year after the property is transferred;
35 the person receiving the exemption shall notify the county recorder and
36 the county auditor of the county in which the property is located not
37 later than sixty (60) days after the event described in subdivision (1) or
38 (2) occurs. The county auditor shall immediately inform the county
39 assessor of a notification received under this subsection.
40 (m) If subsection (l)(1) or (l)(2) applies, the owner shall pay, not
41 later than the date that the next installment of property taxes is due, an
42 amount equal to the sum of the following:
2025 IN 345—LS 7020/DI 120 5
1 (1) The total property taxes that, if it were not for the exemption
2 under subsection (i), would have been levied on the property in
3 each year in which an exemption was allowed.
4 (2) Interest on the property taxes at the rate of ten percent (10%)
5 per year.
6 (n) The liability imposed by subsection (m) is a lien upon the
7 property receiving the exemption under subsection (i). An amount
8 collected under subsection (m) shall be collected as an excess levy. If
9 the amount is not paid, it shall be collected in the same manner that
10 delinquent taxes on real property are collected.
11 (o) Property referred to in this section shall be assessed to the extent
12 required under IC 6-1.1-11-9.
13 (p) Property used by a for-profit provider of early childhood
14 education services to children who are at least four (4) but less than six
15 (6) years of age on the annual assessment date may receive the
16 exemption provided by this section for property used for educational
17 purposes only if all the requirements of section 46 of this chapter are
18 satisfied. A for-profit provider of early childhood education services
19 that provides the services only to children younger than four (4) years
20 of age may not receive the exemption provided by this section for
21 property used for educational purposes.
22 SECTION 3. IC 6-1.1-10-46, AS AMENDED BY P.L.130-2018,
23 SECTION 22, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
24 JANUARY 1, 2026]: Sec. 46. (a) Tangible property owned, occupied,
25 or used by a for-profit provider of early childhood education services
26 to children who are at least four (4) but less than six (6) years of age is
27 exempt from property taxation under section 16 of this chapter only if
28 all the following requirements are satisfied:
29 (1) The primary purpose of the provider is educational.
30 (2) (1) The provider, or a parent company, subsidiary, or
31 affiliate company of the provider, is the property owner. and
32 (2) The provider also predominantly occupies and uses the
33 tangible property for providing early childhood education services
34 to children who are at least four (4) but less than six (6) years of
35 age.
36 (3) The provider meets the standards of quality recognized by a
37 Level 3 or Level 4 Paths to QUALITY program rating under
38 IC 12-17.2-2-14.2 or has a comparable rating from a nationally
39 recognized accrediting body.
40 (4) The provider offers age appropriate curriculum for all
41 children who are less than six (6) years of age, including
42 infants, who attend the child care facility. The curriculum
2025 IN 345—LS 7020/DI 120 6
1 offered must include reading to the children.
2 However, the exemption provided by this section does not apply to
3 tangible property that has been granted a homestead standard
4 deduction under IC 6-1.1-12-37.
5 If the property owner provides early childhood education services to
6 children who are at least four (4) but less than six (6) years of age and
7 to children younger than four (4) years of age, the amount of the
8 exemption must be on that part of the assessment of the property that
9 bears the same proportion to the total assessment of the property as the
10 percentage of the property owner's enrollment count of children who
11 are at least four (4) but less than six (6) years of age compared to the
12 property owner's total enrollment count of children of all ages.
13 (b) For purposes of this section, the annual assessment date or, if the
14 annual assessment date is not a business day for the property owner, the
15 business day closest to the annual assessment date, must be used for the
16 enrollment count under this section. However, a property owner that
17 believes that the enrollment count on this date for a particular year does
18 not accurately represent the property owner's normal enrollment count
19 for that year may appeal to the county assessor for a change in the date
20 to be used under this section for that year. The appeal must be filed on
21 or before the deadline for filing an exemption under section 16 of this
22 chapter. If the county assessor finds that the property owner's appeal
23 substantiates that the property owner's normal enrollment count is not
24 accurately represented by using the required date, the assessor shall
25 establish an alternate date to be used for that year that represents the
26 property owner's normal enrollment count for that year.
27 SECTION 4. IC 6-1.1-10-51 IS ADDED TO THE INDIANA CODE
28 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
29 JANUARY 1, 2026]: Sec. 51. (a) As used in this section, "child
30 care" has the meaning set forth in IC 12-7-2-28.2.
31 (b) As used in this section, "early learning advisory committee"
32 refers to the early learning advisory committee established by
33 IC 12-17.2-3.8-5.
34 (c) As used in this section, "employer" means any person,
35 corporation, limited liability company, partnership, or other entity
36 with employees employed at a physical location in Indiana. The
37 term includes a pass through entity. However, the term does not
38 include an employer who is in the business of operating a child care
39 facility.
40 (d) As used in this section, "office" refers to the office of the
41 secretary of family and social services established by IC 12-8-1.5-1.
42 (e) The part of the gross assessed value of tangible property that
2025 IN 345—LS 7020/DI 120 7
1 is attributable to tangible property owned and used by an
2 employer, or a parent company, subsidiary, or affiliate company
3 of an employer, to provide child care for children of the employer's
4 employees and children of the employees of another business in
5 accordance with an agreement entered into under subsection (g) is
6 exempt from property taxation if the following conditions are met:
7 (1) The child care is provided in a facility located on the
8 employer's property.
9 (2) Subject to subsection (g), the child care is provided only
10 for children of the employer's employees.
11 (3) The child care facility is licensed by the division of family
12 resources under IC 12-17.2.
13 (4) The part of the employer's property used to provide child
14 care meets standards established by the office and the early
15 learning advisory committee for the number of children to be
16 served by the child care facility.
17 (f) The child care facility may be operated by the employer or
18 under a contract described in Section 45F(c)(1)(A)(iii) of the
19 Internal Revenue Code to provide child care services to the
20 employer's employees.
21 (g) An employer may provide child care in a facility described
22 in subsection (e)(1) for the children of the employees of another
23 business if the employer and the other business enter into an
24 agreement that outlines the terms under which the child care is to
25 be provided to the children of the employees of the other business.
26 SECTION 5. IC 6-1.1-10-51.5 IS ADDED TO THE INDIANA
27 CODE AS A NEW SECTION TO READ AS FOLLOWS
28 [EFFECTIVE JULY 1, 2025]: Sec. 51.5. (a) This section applies to
29 assessment dates occurring after December 31, 2025.
30 (b) As used in this chapter, "privately owned wastewater
31 facility" means a sewer plant, a water plant, or both, that is
32 privately owned.
33 (c) The true tax value of a privately owned wastewater facility
34 shall be determined by applying the income capitalization
35 approach.
36 (d) The department shall, by rules adopted under IC 4-22-2,
37 establish uniform income capitalization rates annually and
38 procedures to be used for the assessment of a privately owned
39 wastewater facility and provide the annual capitalization rate to
40 assessing officials upon request. Assessing officials shall use the
41 procedures adopted by the department to assess, reassess, and
42 annually adjust the assessed value of a privately owned wastewater
2025 IN 345—LS 7020/DI 120 8
1 facility.
2 (e) If the application of the income capitalization method for an
3 assessment year results in a zero (0) or negative assessment, the
4 privately owned wastewater facility is exempt from property
5 taxation for that assessment year.
6 SECTION 6. IC 6-1.1-18.5-2, AS AMENDED BY P.L.239-2023,
7 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
8 JANUARY 1, 2026]: Sec. 2. (a) As used in this section, "Indiana
9 nonfarm personal income" means the estimate of total nonfarm
10 personal income for Indiana in a calendar year as computed by the
11 federal Bureau of Economic Analysis using any actual data for the
12 calendar year and any estimated data determined appropriate by the
13 federal Bureau of Economic Analysis. This subsection expires
14 January 1, 2026.
15 (b) Except as provided in subsections (c) and (e), for purposes of
16 determining a civil taxing unit's maximum permissible ad valorem
17 property tax levy for an ensuing calendar year, the civil taxing unit
18 shall use the maximum levy growth quotient determined in the last
19 STEP of the following STEPS:
20 STEP ONE: For each of the six (6) calendar years immediately
21 preceding the year in which a budget is adopted under
22 IC 6-1.1-17-5 for the ensuing calendar year, divide the Indiana
23 nonfarm personal income for the calendar year by the Indiana
24 nonfarm personal income for the calendar year immediately
25 preceding that calendar year, rounding to the nearest
26 one-thousandth (0.001). determine:
27 (A) the average yearly wage for state and local government
28 employees in Indiana for the calendar year compared to
29 the average yearly wage for state and local government
30 employees in the calendar year immediately preceding that
31 calendar year, expressed as a percentage, but not less than
32 zero (0);
33 (B) the Consumer Price Index, as published by the United
34 States Bureau of Labor Statistics for the calendar year
35 compared to the Consumer Price Index in the calendar
36 year immediately preceding that calendar year, expressed
37 as a percentage, but not less than zero (0); and
38 (C) the result of:
39 (i) the clause (A) percentage plus the clause (B)
40 percentage; divided by
41 (ii) two (2).
42 STEP TWO: Determine the sum of the STEP ONE results.
2025 IN 345—LS 7020/DI 120 9
1 STEP THREE: Divide the STEP TWO result by six (6), rounding
2 to the nearest one-thousandth (0.001).
3 STEP FOUR: Determine the lesser of the following:
4 (A) The STEP THREE quotient.
5 (B) One and six-hundredths (1.06).
6 (c) Except as provided in subsection (f), a school corporation shall
7 use for its operations fund maximum levy calculation under
8 IC 20-46-8-1 the maximum levy growth quotient determined in the last
9 STEP of the following STEPS:
10 STEP ONE: Determine for each school corporation, the average
11 annual growth in net assessed value using the three (3) calendar
12 years immediately preceding the year in which a budget is
13 adopted under IC 6-1.1-17-5 for the ensuing calendar year.
14 STEP TWO: Determine the greater of:
15 (A) zero (0); or
16 (B) the STEP ONE amount minus the sum of:
17 (i) the maximum levy growth quotient determined under
18 subsection (b) minus one (1); plus
19 (ii) two-hundredths (0.02).
20 STEP THREE: Determine the lesser of:
21 (A) the STEP TWO amount; or
22 (B) four-hundredths (0.04).
23 STEP FOUR: Determine the sum of:
24 (A) the STEP THREE amount; plus
25 (B) the maximum levy growth quotient determined under
26 subsection (b).
27 STEP FIVE: Determine the greater of:
28 (A) the STEP FOUR amount; or
29 (B) the maximum levy growth quotient determined under
30 subsection (b).
31 (d) The budget agency shall provide the maximum levy growth
32 quotient for the ensuing year to civil taxing units, school corporations,
33 and the department of local government finance before July 1 of each
34 year.
35 (e) This subsection applies only for purposes of determining the
36 maximum levy growth quotient to be used in determining a civil taxing
37 unit's maximum permissible ad valorem property tax levy in calendar
38 years 2024 and 2025. For purposes of determining the maximum levy
39 growth quotient in calendar years 2024 and 2025, instead of the result
40 determined in the last STEP in subsection (b), the maximum levy
41 growth quotient is determined in the last STEP of the following
42 STEPS:
2025 IN 345—LS 7020/DI 120 10
1 STEP ONE: Determine the result of STEP FOUR of subsection
2 (b), calculated as if this subsection was not in effect.
3 STEP TWO: Subtract one (1) from the STEP ONE result.
4 STEP THREE: Multiply the STEP TWO result by eight-tenths
5 (0.8).
6 STEP FOUR: Add one (1) to the STEP THREE result.
7 STEP FIVE: Determine the lesser of:
8 (A) the STEP FOUR result; or
9 (B) one and four-hundredths (1.04).
10 (f) This subsection applies only for purposes of determining the
11 maximum levy growth quotient to be used in determining a school
12 corporation's operations fund maximum levy in calendar years 2024
13 and 2025. For purposes of determining the maximum levy growth
14 quotient in calendar years 2024 and 2025, instead of the result
15 determined in the last STEP in subsection (c), the maximum levy
16 growth quotient is determined in the last STEP of the following
17 STEPS:
18 STEP ONE: Determine the result of STEP FIVE of subsection (c),
19 calculated as if this subsection was not in effect.
20 STEP TWO: Subtract one (1) from the STEP ONE result.
21 STEP THREE: Multiply the STEP TWO result by eight-tenths
22 (0.8).
23 STEP FOUR: Add one (1) to the STEP THREE result.
24 STEP FIVE: Determine the lesser of:
25 (A) the STEP FOUR result; or
26 (B) one and four-hundredths (1.04).
27 SECTION 7. IC 12-8-1.5-21 IS ADDED TO THE INDIANA CODE
28 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
29 1, 2025]: Sec. 21. (a) As used in this section, "child care" has the
30 meaning set forth in IC 12-7-2-28.2.
31 (b) The office of the secretary of family and social services shall,
32 in consultation with the early learning advisory committee
33 established by IC 12-17.2-3.8-5, do the following:
34 (1) Evaluate the following:
35 (A) Current child care licensing requirements under
36 IC 12-17.2.
37 (B) Licensure exemptions available under IC 12-17.2-2-8.
38 (2) Prepare a report that includes the following:
39 (A) Information concerning the evaluation under
40 subdivision (1).
41 (B) Recommendations to:
42 (i) replace the current child care licensing requirements
2025 IN 345—LS 7020/DI 120 11
1 under IC 12-17.2 with requirements that would apply to
2 all individuals or entities providing child care and that
3 focus on the basic health and safety of children; and
4 (ii) simplify the paths to QUALITY requirements,
5 focusing on best practices and evidence based
6 requirements.
7 (3) Not later than October 31, 2025, submit the report
8 prepared under subdivision (2) to the general assembly in an
9 electronic format under IC 5-14-6.
10 (c) This section expires July 1, 2026.
11 SECTION 8. [EFFECTIVE JULY 1, 2025] (a) IC 6-1.1-10-16,
12 IC 6-1.1-10-46, and IC 6-1.1-18.5-2, all as amended by this act,
13 apply to assessment dates after December 31, 2025.
14 (b) IC 6-1.1-10-51, as added by this act, applies to assessment
15 dates after December 31, 2025.
16 (c) This SECTION expires July 1, 2028.
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