Introduced Version
SENATE BILL No. 394
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 4-33; IC 4-35-8; IC 4-38-10; IC 6-1.1;
IC 6-2.5; IC 6-3; IC 6-3.1; IC 6-7-1; IC 6-8.1-7-1; IC 7.1-4.
Synopsis: Various tax and fiscal matters. Provides a maximum
property tax liability credit for certain homestead owners based on the
owner's age and annual income. Specifies the amount of the credit.
Makes certain changes to the deduction amounts and qualification
requirements for the disabled veteran deductions. Provides a 100%
property tax exemption for permanently disabled veterans. Increases
the amount of certain personal exemptions from $1,000 to $3,500 for
individual taxpayers who satisfy certain income criteria. Provides an
additional adjusted gross income tax deduction of $5,000 for educators
in elementary or secondary education, police officers, firefighters, and
veterans. Provides an adjusted gross income tax deduction for
taxpayers who install solar energy panels on the taxpayer's homestead
equal to the cost of the labor and materials for the installation of the
solar energy panels. Repeals the renter's deduction and instead provides
a refundable income tax credit for renters. Provides that the amount of
the credit is $6,000, or $7,500 in the case of a disabled veteran.
Provides a refundable income tax mortgage credit for first time home
buyers. Provides that the amount of the credit is $15,000, which may
be claimed for five consecutive taxable years. Provides an adjusted
gross income tax deduction for the first $16,000 of retirement income
received by an individual who is at least 62 years of age. Defines
"retirement income". Provides a sales tax exemption for utility services,
including water, natural gas, and electricity. Provides a sales and use
tax exemption period during the last week of January and the last week
of August each year for school supplies, backpacks, clothing, or
computers, if the item is purchased for use by: (A) a student in a public
(Continued next page)
Effective: July 1, 2025; December 31, 2025; January 1, 2026.
Qaddoura
January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
2025 IN 394—LS 7250/DI 120 Digest Continued
or private elementary or secondary school; or (B) a student attending
a postsecondary school; in Indiana. Appropriates $140,000,000 for the
biennium to the department of education to be used as supplemental
funding for the federal Child Care and Development Fund voucher
program. Increases the maximum amount of the income tax credit for
an individual employed as a teacher for amounts expended for
classroom supplies from $100 to $1,000 per taxable year. Increases the
cigarette tax by $1 per pack. Increases the river boat wagering tax, and
increases the supplemental wagering tax, slot machine wagering tax,
and sports wagering tax and deposits the revenue from the increases in
the state general fund. Increases the beer excise tax, liquor excise tax,
wine excise tax, and hard cider excise tax and deposits the revenue
from the increases in the state general fund.
2025 IN 394—LS 7250/DI 1202025 IN 394—LS 7250/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,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
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. 394
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation and to make an appropriation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 4-33-12-1.5, AS AMENDED BY P.L.293-2019,
2 SECTION 24, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 1.5. (a) A supplemental wagering tax on the
4 wagering occurring each day at a riverboat is imposed upon the
5 licensed owner operating the riverboat.
6 (b) Except as provided in subsection (d), and subject to subsection
7 (c), the amount of supplemental wagering tax imposed for a particular
8 day is determined by multiplying the riverboat's adjusted gross receipts
9 for that day by the quotient of:
10 (1) the total riverboat admissions tax that the riverboat's licensed
11 owner paid beginning July 1, 2016, and ending June 30, 2017;
12 divided by
13 (2) the riverboat's adjusted gross receipts beginning July 1, 2016,
14 and ending June 30, 2017.
15 (c) The quotient used under subsection (b) to determine the
2025 IN 394—LS 7250/DI 120 2
1 supplemental wagering tax liability of a licensed owner subject to
2 subsection (b) may not exceed the following when expressed as a
3 percentage:
4 (1) Four percent (4%) before July 1, 2019.
5 (2) Three and five-tenths percent (3.5%), after June 30, 2019, and
6 before July 1, 2025, and after June 30, 2025, five percent
7 (5%).
8 (d) The supplemental wagering tax liability of a licensed owner
9 operating an inland casino in Vigo County is equal to two and
10 nine-tenths percent (2.9%), before July 1, 2025, and after June 30,
11 2025, five percent (5%) of the riverboat's adjusted gross receipts for
12 the day.
13 SECTION 2. IC 4-33-12-6, AS AMENDED BY P.L.104-2022,
14 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2025]: Sec. 6. (a) The department shall place in the state
16 general fund the tax revenue collected under this chapter.
17 (b) Except as provided in subsection (c) and by sections 8 and 8.5
18 of this chapter, the treasurer of state shall quarterly pay the following
19 amounts:
20 (1) Except as provided in section 9(k) of this chapter, thirty-three
21 and one-third percent (33 1/3%) of the admissions tax and
22 supplemental wagering tax collected by the licensed owner during
23 the quarter shall be paid to:
24 (A) the city in which the riverboat is located, if the city:
25 (i) is located in a county having a population of more than
26 one hundred twelve thousand (112,000) and less than one
27 hundred twenty thousand (120,000); or
28 (ii) is contiguous to the Ohio River and is the largest city in
29 the county; and
30 (B) the county in which the riverboat is located, if the
31 riverboat is not located in a city described in clause (A).
32 (2) Except as provided in section 9(k) of this chapter, thirty-three
33 and one-third percent (33 1/3%) of the admissions tax and
34 supplemental wagering tax collected by the licensed owner during
35 the quarter shall be paid to the county in which the riverboat is
36 located. In the case of a county described in subdivision (1)(B),
37 this thirty-three and one-third percent (33 1/3%) of the admissions
38 tax and supplemental wagering tax is in addition to the
39 thirty-three and one-third percent (33 1/3%) received under
40 subdivision (1)(B).
41 (3) Except as provided in section 9(k) of this chapter, three and
42 thirty-three hundredths percent (3.33%) of the admissions tax and
2025 IN 394—LS 7250/DI 120 3
1 supplemental wagering tax collected by the licensed owner during
2 the quarter shall be paid to the county convention and visitors
3 bureau or promotion fund for the county in which the riverboat is
4 located.
5 (4) Except as provided in section 9(k) of this chapter, five percent
6 (5%) of the admissions tax and supplemental wagering tax
7 collected by the licensed owner during a quarter shall be paid to
8 the state fair commission, for use in any activity that the
9 commission is authorized to carry out under IC 15-13-3.
10 (5) Except as provided in section 9(k) of this chapter, three and
11 thirty-three hundredths percent (3.33%) of the admissions tax and
12 supplemental wagering tax collected by the licensed owner during
13 the quarter shall be paid to the division of mental health and
14 addiction. The division shall allocate at least twenty-five percent
15 (25%) of the funds derived from the admissions tax to the
16 prevention and treatment of compulsive gambling.
17 (6) Twenty-one and six hundred sixty-seven thousandths percent
18 (21.667%) of the admissions tax and supplemental wagering tax
19 collected by the licensed owner during the quarter shall be paid
20 to the state general fund.
21 (c) After June 30, 2025, the state comptroller shall determine
22 the portion of supplemental wagering tax revenue deposited in the
23 state general fund under subsection (a) that represents the amount
24 collected as if the supplemental wagering tax was imposed at a rate
25 of three and five-tenths percent (3.5%), or two and nine-tenths
26 percent (2.9%), in the case of a licensed owner operating an inland
27 casino in Vigo County. The amount of revenue collected that
28 exceeds the amount determined under this subsection shall not be
29 distributed under subsection (b), but shall remain in the state
30 general fund.
31 SECTION 3. IC 4-33-13-1.5, AS AMENDED BY P.L.137-2022,
32 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2025]: Sec. 1.5. (a) This subsection applies only to a riverboat
34 that received at least seventy-five million dollars ($75,000,000) of
35 adjusted gross receipts during the preceding state fiscal year. A
36 graduated tax is imposed on the adjusted gross receipts received from
37 gambling games authorized under this article as follows:
38 (1) For state fiscal years ending before July 1, 2021, fifteen
39 percent (15%), and for state fiscal years beginning after June 30,
40 2021, and ending before July 1, 2025, ten percent (10%), and
41 for state fiscal years beginning after June 30, 2025, eleven
42 percent (11%), of the first twenty-five million dollars
2025 IN 394—LS 7250/DI 120 4
1 ($25,000,000) of adjusted gross receipts received during the
2 period beginning July 1 of each year and ending June 30 of the
3 following year.
4 (2) Twenty percent (20%), for state fiscal years ending before
5 July 1, 2025, and for state fiscal years beginning after June 30,
6 2025, twenty-two percent (22%), of the adjusted gross receipts
7 in excess of twenty-five million dollars ($25,000,000) but not
8 exceeding fifty million dollars ($50,000,000) received during the
9 period beginning July 1 of each year and ending June 30 of the
10 following year.
11 (3) Twenty-five percent (25%), for state fiscal years ending
12 before July 1, 2025, and for state fiscal years beginning after
13 June 30, 2025, twenty-seven and five-tenths percent (27.5%),
14 of the adjusted gross receipts in excess of fifty million dollars
15 ($50,000,000) but not exceeding seventy-five million dollars
16 ($75,000,000) received during the period beginning July 1 of each
17 year and ending June 30 of the following year.
18 (4) Thirty percent (30%), for state fiscal years ending before
19 July 1, 2025, and for state fiscal years beginning after June 30,
20 2025, thirty-three percent (33%), of the adjusted gross receipts
21 in excess of seventy-five million dollars ($75,000,000) but not
22 exceeding one hundred fifty million dollars ($150,000,000)
23 received during the period beginning July 1 of each year and
24 ending June 30 of the following year.
25 (5) Thirty-five percent (35%), for state fiscal years ending
26 before July 1, 2025, and for state fiscal years beginning after
27 June 30, 2025, thirty-eight and five-tenths percent (38.5%), of
28 all adjusted gross receipts in excess of one hundred fifty million
29 dollars ($150,000,000) but not exceeding six hundred million
30 dollars ($600,000,000) received during the period beginning July
31 1 of each year and ending June 30 of the following year.
32 (6) Forty percent (40%), for state fiscal years ending before
33 July 1, 2025, and for state fiscal years beginning after June 30,
34 2025, forty-four percent (44%), of all adjusted gross receipts
35 exceeding six hundred million dollars ($600,000,000) received
36 during the period beginning July 1 of each year and ending June
37 30 of the following year.
38 (b) This subsection applies only to a riverboat that received less than
39 seventy-five million dollars ($75,000,000) of adjusted gross receipts
40 during the preceding state fiscal year. A graduated tax is imposed on
41 the adjusted gross receipts received from gambling games authorized
42 under this article as follows:
2025 IN 394—LS 7250/DI 120 5
1 (1) For state fiscal years ending before July 1, 2021, five percent
2 (5%), and for state fiscal years beginning after June 30, 2021, and
3 ending before July 1, 2025, two and one-half percent (2.5%),
4 and for state fiscal years beginning after June 30, 2025, two
5 and three-quarters percent (2.75%), of the first twenty-five
6 million dollars ($25,000,000) of adjusted gross receipts received
7 during the period beginning July 1 of each year and ending June
8 30 of the following year.
9 (2) For state fiscal years ending before July 1, 2021, twenty
10 percent (20%), and for state fiscal years beginning after June 30,
11 2021, and ending before July 1, 2025, ten percent (10%), and
12 for state fiscal years beginning after June 30, 2025, eleven
13 percent (11%), of the adjusted gross receipts in excess of
14 twenty-five million dollars ($25,000,000) but not exceeding fifty
15 million dollars ($50,000,000) received during the period
16 beginning July 1 of each year and ending June 30 of the following
17 year.
18 (3) For state fiscal years ending before July 1, 2021, twenty-five
19 percent (25%), and for state fiscal years beginning after June 30,
20 2021, and ending before July 1, 2025, twenty percent (20%),
21 and for state fiscal years beginning after June 30, 2025,
22 twenty-two percent (22%), of the adjusted gross receipts in
23 excess of fifty million dollars ($50,000,000) but not exceeding
24 seventy-five million dollars ($75,000,000) received during the
25 period beginning July 1 of each year and ending June 30 of the
26 following year.
27 (4) Thirty percent (30%), for state fiscal years ending before
28 July 1, 2025, and for state fiscal years beginning after June 30,
29 2025, thirty-three percent (33%), of the adjusted gross receipts
30 in excess of seventy-five million dollars ($75,000,000) but not
31 exceeding one hundred fifty million dollars ($150,000,000)
32 received during the period beginning July 1 of each year and
33 ending June 30 of the following year.
34 (5) Thirty-five percent (35%), for state fiscal years ending
35 before July 1, 2025, and for state fiscal years beginning after
36 June 30, 2025, thirty-eight and five-tenths percent (38.5%) of
37 all adjusted gross receipts in excess of one hundred fifty million
38 dollars ($150,000,000) but not exceeding six hundred million
39 dollars ($600,000,000) received during the period beginning July
40 1 of each year and ending June 30 of the following year.
41 (6) Forty percent (40%), for state fiscal years ending before
42 July 1, 2025, and for state fiscal years beginning after June 30,
2025 IN 394—LS 7250/DI 120 6
1 2025, forty-four percent (44%), of all adjusted gross receipts
2 exceeding six hundred million dollars ($600,000,000) received
3 during the period beginning July 1 of each year and ending June
4 30 of the following year.
5 (c) The licensed owner or operating agent of a riverboat taxed under
6 subsection (b) shall pay an additional tax of two million five hundred
7 thousand dollars ($2,500,000) in any state fiscal year in which the
8 riverboat's adjusted gross receipts exceed seventy-five million dollars
9 ($75,000,000). The additional tax imposed under this subsection is due
10 before July 1 of the following state fiscal year.
11 (d) The licensed owner or operating agent shall:
12 (1) remit the daily amount of tax imposed by this chapter to the
13 department on the twenty-fourth calendar day of each month for
14 the wagering taxes collected that month; and
15 (2) report gaming activity information to the commission daily on
16 forms prescribed by the commission.
17 Any taxes collected during the month but after the day on which the
18 taxes are required to be paid to the department shall be paid to the
19 department at the same time the following month's taxes are due.
20 (e) The payment of the tax under this section must be reported and
21 remitted electronically through the department's online tax filing
22 program.
23 (f) If the department requires taxes to be remitted under this chapter
24 through electronic funds transfer, the department may allow the
25 licensed owner or operating agent to file a monthly report to reconcile
26 the amounts remitted to the department.
27 SECTION 4. IC 4-35-8-1, AS AMENDED BY P.L.137-2022,
28 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
29 JULY 1, 2025]: Sec. 1. (a) A graduated slot machine wagering tax is
30 imposed as follows on ninety-nine percent (99%) of the adjusted gross
31 receipts received after June 30, 2012, and before July 1, 2013, on
32 ninety-one and five-tenths percent (91.5%) of the adjusted gross
33 receipts received after June 30, 2013, and before July 1, 2015, and on
34 eighty-eight percent (88%) of the adjusted gross receipts received after
35 June 30, 2015, from wagering on gambling games authorized by this
36 article:
37 (1) Before July 1, 2025, twenty-five percent (25%), and after
38 June 30, 2025, twenty-seven and one-half percent (27.5%), of
39 the first one hundred million dollars ($100,000,000) of adjusted
40 gross receipts received during the period beginning July 1 of each
41 year and ending June 30 of the following year.
42 (2) For periods:
2025 IN 394—LS 7250/DI 120 7
1 (A) ending before July 1, 2021, thirty percent (30%) of the
2 adjusted gross receipts in excess of one hundred million
3 dollars ($100,000,000) but not exceeding two hundred million
4 dollars ($200,000,000) received during the period beginning
5 July 1 of each year and ending June 30 of the following year;
6 and
7 (B) beginning after June 30, 2021, and before July 1, 2025,
8 thirty percent (30%) and beginning after June 30, 2025,
9 thirty-three percent (33%) of the adjusted gross receipts in
10 excess of one hundred million dollars ($100,000,000) received
11 during the period beginning July 1 of each year and ending
12 June 30 of the following year.
13 (3) For periods ending before July 1, 2021, thirty-five percent
14 (35%) of the adjusted gross receipts in excess of two hundred
15 million dollars ($200,000,000) received during the period
16 beginning July 1 of each year and ending June 30 of the following
17 year.
18 (b) A licensee shall do the following:
19 (1) Remit the daily amount of tax imposed by this section to the
20 department on the twenty-fourth calendar day of each month. Any
21 taxes collected during the month but after the day on which the
22 taxes are required to be paid shall be paid to the department at the
23 same time the following month's taxes are due.
24 (2) Report gaming activity information to the commission daily
25 on forms prescribed by the commission.
26 (c) The payment of the tax under this section must be in a manner
27 prescribed by the department.
28 (d) If the department requires taxes to be remitted under this chapter
29 through electronic funds transfer, the department may allow the
30 licensee to file a monthly report to reconcile the amounts remitted to
31 the department.
32 (e) The payment of the tax under this section must be reported and
33 remitted electronically through the department's online tax filing
34 program.
35 SECTION 6. IC 4-38-10-1, AS ADDED BY P.L.293-2019,
36 SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
37 JULY 1, 2025]: Sec. 1. A sports wagering tax is imposed on the
38 adjusted gross receipts received from authorized sports wagering
39 offered by a certificate holder under this article at a rate of nine and
40 one-half percent (9.5%). eleven percent (11%).
41 SECTION 7. IC 4-38-10-3, AS ADDED BY P.L.293-2019,
42 SECTION 43, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2025 IN 394—LS 7250/DI 120 8
1 JULY 1, 2025]: Sec. 3. (a) Except as provided in subsection (b), the
2 department shall deposit the tax revenue collected under section 2 of
3 this chapter in the state general fund.
4 (b) The department shall transfer an amount equal to three and
5 thirty-three hundredths percent (3.33%) ten percent (10%) of the tax
6 revenue collected under section 2 of this chapter to the addiction
7 services fund established by IC 12-23-2-2.
8 (c) Twenty-five percent (25%) of the tax revenue transferred under
9 subsection (b) must be allocated to:
10 (1) the prevention of;
11 (2) education regarding;
12 (3) provider credentialing for; and
13 (4) treatment of;
14 compulsive gambling.
15 (d) Notwithstanding subsections (a) and (b), the amount of tax
16 revenue deposited in the state general fund shall not be less than
17 the amount collected as if the sports wagering tax was imposed at
18 a rate of nine and five-tenths percent (9.5%) and the percentage
19 under subsection (b) was three and thirty-three hundredths
20 percent (3.33%).
21 SECTION 8. IC 6-1.1-10-53 IS ADDED TO THE INDIANA CODE
22 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
23 JANUARY 1, 2026]: Sec. 53. (a) This section applies to assessment
24 dates occurring after December 31, 2025.
25 (b) As used in this section, "eligible property" means the real
26 property, mobile home not assessed as real property, or
27 manufactured home not assessed as real property that a
28 permanently disabled veteran owns (or the real property, mobile
29 home not assessed as real property, or manufactured home not
30 assessed as real property that the individual is buying under a
31 contract that provides that the individual is to pay property taxes
32 on the real property, mobile home, or manufactured home if the
33 contract or a memorandum of the contract is recorded in the
34 county recorder's office).
35 (c) As used in this section, "permanently disabled veteran"
36 means an individual who:
37 (1) served in the military or naval forces of the United States
38 during any of its wars;
39 (2) received an honorable discharge;
40 (3) has a total service connected disability that is one hundred
41 percent (100%) debilitating and permanent; and
42 (4) the individual's disability is evidenced by:
2025 IN 394—LS 7250/DI 120 9
1 (A) a pension certificate, an award of compensation, or a
2 disability compensation check issued by the United States
3 Department of Veterans Affairs; or
4 (B) a certificate of eligibility issued to the individual by the
5 Indiana department of veterans' affairs after the Indiana
6 department of veterans' affairs has determined that the
7 individual's disability qualifies the individual to receive an
8 exemption under this section.
9 (d) Eligible property owed by a permanently disabled veteran
10 is exempt from property taxation.
11 SECTION 9. IC 6-1.1-12-13, AS AMENDED BY P.L.293-2013(ts),
12 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
13 JANUARY 1, 2026]: Sec. 13. (a) Except as provided in section 40.5 of
14 this chapter, an individual may have twenty-four thousand nine
15 hundred sixty dollars ($24,960) one hundred fifty thousand dollars
16 ($150,000) deducted from the assessed value of the taxable tangible
17 property that the individual owns, or real property, a mobile home not
18 assessed as real property, or a manufactured home not assessed as real
19 property that the individual is buying under a contract that provides
20 that the individual is to pay property taxes on the real property, mobile
21 home, or manufactured home, if the contract or a memorandum of the
22 contract is recorded in the county recorder's office and if:
23 (1) the individual served in the military or naval forces of the
24 United States during any of its wars;
25 (2) the individual received an honorable discharge;
26 (3) the individual has a disability with a service connected
27 disability of ten percent (10%) or more;
28 (4) the individual's disability is evidenced by:
29 (A) a pension certificate, an award of compensation, or a
30 disability compensation check issued by the United States
31 Department of Veterans Affairs; or
32 (B) a certificate of eligibility issued to the individual by the
33 Indiana department of veterans' affairs after the Indiana
34 department of veterans' affairs has determined that the
35 individual's disability qualifies the individual to receive a
36 deduction under this section; and
37 (5) the individual:
38 (A) owns the real property, mobile home, or manufactured
39 home; or
40 (B) is buying the real property, mobile home, or manufactured
41 home under contract;
42 on the date the statement required by section 15 of this chapter is
2025 IN 394—LS 7250/DI 120 10
1 filed.
2 (b) The surviving spouse of an individual may receive the deduction
3 provided by this section if the individual satisfied the requirements of
4 subsection (a)(1) through (a)(4) at the time of death and the surviving
5 spouse satisfies the requirement of subsection (a)(5) at the time the
6 deduction statement is filed. The surviving spouse is entitled to the
7 deduction regardless of whether the property for which the deduction
8 is claimed was owned by the deceased veteran or the surviving spouse
9 before the deceased veteran's death.
10 (c) One who receives the deduction provided by this section may not
11 receive the deduction provided by section 16 of this chapter. However,
12 the individual may receive any other property tax deduction which the
13 individual is entitled to by law.
14 (d) An individual who has sold real property, a mobile home not
15 assessed as real property, or a manufactured home not assessed as real
16 property to another person under a contract that provides that the
17 contract buyer is to pay the property taxes on the real property, mobile
18 home, or manufactured home may not claim the deduction provided
19 under this section against that real property, mobile home, or
20 manufactured home.
21 SECTION 10. IC 6-1.1-12-14, AS AMENDED BY P.L.136-2024,
22 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
23 JANUARY 1, 2026]: Sec. 14. (a) Except as provided in subsection (c)
24 and Except as provided in section 40.5 of this chapter, an individual
25 may have the sum of fourteen thousand dollars ($14,000) ninety-six
26 thousand dollars ($96,000) deducted from the assessed value of the
27 real property, mobile home not assessed as real property, or
28 manufactured home not assessed as real property that the individual
29 owns (or the real property, mobile home not assessed as real property,
30 or manufactured home not assessed as real property that the individual
31 is buying under a contract that provides that the individual is to pay
32 property taxes on the real property, mobile home, or manufactured
33 home if the contract or a memorandum of the contract is recorded in
34 the county recorder's office) if:
35 (1) the individual served in the military or naval forces of the
36 United States for at least ninety (90) days;
37 (2) the individual received an honorable discharge;
38 (3) the individual either:
39 (A) has a total disability; or
40 (B) is at least sixty-two (62) years old and has a disability of at
41 least ten percent (10%);
42 (4) the individual's disability is evidenced by:
2025 IN 394—LS 7250/DI 120 11
1 (A) a pension certificate or an award of compensation issued
2 by the United States Department of Veterans Affairs; or
3 (B) a certificate of eligibility issued to the individual by the
4 Indiana department of veterans' affairs after the Indiana
5 department of veterans' affairs has determined that the
6 individual's disability qualifies the individual to receive a
7 deduction under this section; and
8 (5) the individual:
9 (A) owns the real property, mobile home, or manufactured
10 home; or
11 (B) is buying the real property, mobile home, or manufactured
12 home under contract;
13 on the date the statement required by section 15 of this chapter is
14 filed.
15 (b) Except as provided in subsections (c) and (d), The surviving
16 spouse of an individual may receive the deduction provided by this
17 section if:
18 (1) the individual satisfied the requirements of subsection (a)(1)
19 through (a)(4) at the time of death; or
20 (2) the individual:
21 (A) was killed in action;
22 (B) died while serving on active duty in the military or naval
23 forces of the United States; or
24 (C) died while performing inactive duty training in the military
25 or naval forces of the United States; and
26 the surviving spouse satisfies the requirement of subsection (a)(5) at
27 the time the deduction statement is filed. The surviving spouse is
28 entitled to the deduction regardless of whether the property for which
29 the deduction is claimed was owned by the deceased veteran or the
30 surviving spouse before the deceased veteran's death.
31 (c) Except as provided in subsection (f), no one is entitled to the
32 deduction provided by this section if the assessed value of the
33 individual's Indiana real property, Indiana mobile home not assessed as
34 real property, and Indiana manufactured home not assessed as real
35 property, as shown by the tax duplicate, exceeds the assessed value
36 limit specified in subsection (d).
37 (d) Except as provided in subsection (f), for the:
38 (1) January 1, 2017, January 1, 2018, and January 1, 2019,
39 assessment dates, the assessed value limit for purposes of
40 subsection (c) is one hundred seventy-five thousand dollars
41 ($175,000);
42 (2) January 1, 2020, January 1, 2021, January 1, 2022, and
2025 IN 394—LS 7250/DI 120 12
1 January 1, 2023, assessment dates, the assessed value limit for
2 purposes of subsection (c) is two hundred thousand dollars
3 ($200,000); and
4 (3) January 1, 2024, assessment date and for each assessment date
5 thereafter, the assessed value limit for purposes of subsection (c)
6 is two hundred forty thousand dollars ($240,000).
7 (e) (c) An individual who has sold real property, a mobile home not
8 assessed as real property, or a manufactured home not assessed as real
9 property to another person under a contract that provides that the
10 contract buyer is to pay the property taxes on the real property, mobile
11 home, or manufactured home may not claim the deduction provided
12 under this section against that real property, mobile home, or
13 manufactured home.
14 (f) For purposes of determining the assessed value of the real
15 property, mobile home, or manufactured home under subsection (d) for
16 an individual who has received a deduction under this section in a
17 previous year, increases in assessed value that occur after the later of:
18 (1) December 31, 2019; or
19 (2) the first year that the individual has received the deduction;
20 are not considered unless the increase in assessed value is attributable
21 to substantial renovation or new improvements. Where there is an
22 increase in assessed value for purposes of the deduction under this
23 section, the assessor shall provide a report to the county auditor
24 describing the substantial renovation or new improvements, if any, that
25 were made to the property prior to the increase in assessed value.
26 SECTION 11. IC 6-1.1-53 IS ADDED TO THE INDIANA CODE
27 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
28 JANUARY 1, 2026]:
29 Chapter 53. Maximum Homestead Property Tax Liability
30 Credit
31 Sec. 1. This chapter applies to taxes first due and payable after
32 December 31, 2025.
33 Sec. 2. As used in this chapter, "eligible individual" means an
34 individual who is eligible for the homestead deduction under
35 IC 6-1.1-12-37 on the assessment date for which the individual's
36 property tax liability is imposed.
37 Sec. 3. As used in this chapter, "homestead" has the meaning set
38 forth in IC 6-1.1-12-37.
39 Sec. 4. As used in this chapter, "property tax liability" means
40 liability for the tax imposed on homestead property determined
41 after application of all credits and deductions under this article,
42 except that the term:
2025 IN 394—LS 7250/DI 120 13
1 (1) includes the portion of the property tax liability that is
2 attributable to a school operating referendum tax levy
3 approved under IC 20-46-1 or a school safety referendum tax
4 levy approved under IC 20-46-9, for purposes of the
5 determination for a qualified individual under section 7 of this
6 chapter; and
7 (2) does not include the portion of the property tax liability
8 that is attributable to a school operating referendum tax levy
9 approved under IC 20-46-1 or a school safety referendum tax
10 levy approved under IC 20-46-9, for purposes of the
11 determination for a qualified individual under section 8 of this
12 chapter.
13 The term does not include any interest or penalty imposed under
14 this article.
15 Sec. 5. As used in this chapter, "senior qualified individual"
16 means an individual who:
17 (1) is at least sixty-five (65) years of age on or before
18 December 31 of the calendar year preceding the year in which
19 the individual's property tax liability is first due and payable;
20 and
21 (2) is eligible for the homestead deduction under
22 IC 6-1.1-12-37 on the assessment date for which the
23 individual's property tax liability is imposed.
24 Sec. 6. As used in this chapter, "income threshold" means:
25 (A) in the case of an individual who filed a single return,
26 adjusted gross income (as defined in Section 62 of the Internal
27 Revenue Code) not exceeding two hundred thousand dollars
28 ($200,000); or
29 (B) in the case of an individual who filed a joint income tax
30 return with the individual's spouse, combined adjusted gross
31 income (as defined in Section 62 of the Internal Revenue
32 Code) not exceeding four hundred thousand dollars
33 ($400,000);
34 for the calendar year preceding by two (2) years the calendar year
35 in which the individual's property tax liability is first due and
36 payable.
37 Sec. 7. This section applies to a senior qualified individual who
38 had adjusted gross income that did not exceed the income
39 threshold in section 6 of this chapter. A credit shall be applied
40 against a senior qualified individual's homestead property tax
41 liability as set forth in this chapter. The amount of the credit under
42 this section is equal to:
2025 IN 394—LS 7250/DI 120 14
1 (1) for the first calendar year for which the credit is applied,
2 the lesser of:
3 (A) the property tax liability first due and payable on the
4 homestead property for the calendar year; or
5 (B) the property tax liability first due and payable on the
6 homestead property for the property tax liability first due
7 and payable on the homestead property for the
8 immediately preceding year;
9 (2) for each calendar year after the first calendar year for
10 which the credit is applied, the lesser of:
11 (A) the property tax liability first due and payable on the
12 homestead property for the calendar year; or
13 (B) the property tax liability first due and payable on the
14 homestead property for the first calendar year for which
15 the credit is applied as determined under subsection (1).
16 Sec. 8. This section applies to a senior qualified individual who
17 had adjusted gross income that exceeded the income threshold in
18 section 6 of this chapter and an eligible individual who is not a
19 senior qualified individual who had adjusted gross income that did
20 not exceed the income threshold in section 6 of this chapter. A
21 credit shall be applied against an individual's homestead property
22 tax liability as set forth in this chapter. The amount of the credit
23 under this section is equal to the greater of zero (0) or the result of:
24 (1) the property tax liability first due and payable on the
25 homestead property for the calendar year; minus
26 (2) the result of:
27 (A) the property tax liability first due and payable on the
28 homestead property for the immediately preceding year
29 after the application of the credit granted under this
30 section for that year; multiplied by
31 (B) one and three-hundredths (1.03).
32 Sec. 9. If a physical change to taxable property results in an
33 increased assessment of the taxable property for an assessment
34 date for which property tax liability is imposed, the property tax
35 liability of a person for property taxes first due and payable for
36 that assessment date with respect to the taxable property is the sum
37 of the:
38 (1) amount of the person's property tax liability attributable
39 to the taxable property otherwise determined under section 5
40 or 6 of this chapter, whichever is applicable, for the calendar
41 year; plus
42 (2) amount of the person's property tax liability that is
2025 IN 394—LS 7250/DI 120 15
1 directly attributable to the physical change in the taxable
2 property.
3 Sec. 10. If:
4 (1) the entire ownership interest; or
5 (2) any part of the ownership interest;
6 in the taxable property changes, the limitations in this chapter do
7 not apply to the determination of property tax liability for
8 property taxes first due and payable in the first calendar year
9 following the change in ownership. Instead, the amount of property
10 tax liability that is attributable to the taxable property for property
11 taxes first due and payable in that particular calendar year is the
12 amount of property tax liability as would otherwise be determined
13 under this article.
14 Sec. 11. The auditor of the county shall apply the provisions of
15 this chapter to a determination of property tax liability for all
16 homesteads as set forth under this chapter.
17 SECTION 12. IC 6-2.5-1-1, AS AMENDED BY P.L.146-2020,
18 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
19 JULY 1, 2025]: Sec. 1. (a) Except as provided in subsection (b), or (c),
20 "unitary transaction" includes all items of personal property and
21 services which are furnished under a single order or agreement and for
22 which a total combined charge or price is calculated.
23 (b) "Unitary transaction" does not include a transaction that meets
24 one (1) of the exceptions in section 11.5(d) of this chapter.
25 (c) "Unitary transaction" as it applies to the furnishing of public
26 utility commodities or services means the public utility commodities
27 and services which are invoiced in a single bill or statement for
28 payment by the consumer.
29 SECTION 13. IC 6-2.5-1-5, AS AMENDED BY P.L.199-2021,
30 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31 JULY 1, 2025]: Sec. 5. (a) Except as provided in subsection (b), "gross
32 retail income" means the total amount of consideration, including cash,
33 credit, property, and services, for which tangible personal property is
34 sold, leased, or rented, valued in money, whether received in money or
35 otherwise, without any deduction for:
36 (1) the seller's cost of the property sold;
37 (2) the cost of materials used, labor or service cost, interest,
38 losses, all costs of transportation to the seller, all taxes imposed
39 on the seller, and any other expense of the seller;
40 (3) charges by the seller for any services necessary to complete
41 the sale, other than delivery and installation charges;
42 (4) delivery charges; or
2025 IN 394—LS 7250/DI 120 16
1 (5) consideration received by the seller from a third party if:
2 (A) the seller actually receives consideration from a party
3 other than the purchaser and the consideration is directly
4 related to a price reduction or discount on the sale;
5 (B) the seller has an obligation to pass the price reduction or
6 discount through to the purchaser;
7 (C) the amount of the consideration attributable to the sale is
8 fixed and determinable by the seller at the time of the sale of
9 the item to the purchaser; and
10 (D) the price reduction or discount is identified as a third party
11 price reduction or discount on the invoice received by the
12 purchaser or on a coupon, certificate, or other documentation
13 presented by the purchaser.
14 For purposes of subdivision (4), delivery charges are charges by the
15 seller for preparation and delivery of the property to a location
16 designated by the purchaser of property, including but not limited to
17 transportation, shipping, postage charges that are not separately stated
18 on the invoice, bill of sale, or similar document, handling, crating, and
19 packing. Delivery charges do not include postage charges that are
20 separately stated on the invoice, bill of sale, or similar document.
21 (b) "Gross retail income" does not include that part of the gross
22 receipts attributable to:
23 (1) the value of any tangible personal property received in a like
24 kind exchange in the retail transaction, if the value of the property
25 given in exchange is separately stated on the invoice, bill of sale,
26 or similar document given to the purchaser;
27 (2) the receipts received in a retail transaction which constitute
28 interest, finance charges, or insurance premiums on either a
29 promissory note or an installment sales contract;
30 (3) discounts, including cash, terms, or coupons that are not
31 reimbursed by a third party that are allowed by a seller and taken
32 by a purchaser on a sale;
33 (4) interest, financing, and carrying charges from credit extended
34 on the sale of personal property if the amount is separately stated
35 on the invoice, bill of sale, or similar document given to the
36 purchaser;
37 (5) any taxes legally imposed directly on the consumer that are
38 separately stated on the invoice, bill of sale, or similar document
39 given to the purchaser, including an excise tax imposed under
40 IC 6-6-15;
41 (6) installation charges that are separately stated on the invoice,
42 bill of sale, or similar document given to the purchaser;
2025 IN 394—LS 7250/DI 120 17
1 (7) telecommunications nonrecurring charges;
2 (8) postage charges that are separately stated on the invoice, bill
3 of sale, or similar document; or
4 (9) charges for serving or delivering food and food ingredients
5 furnished, prepared, or served for consumption at a location, or on
6 equipment, provided by the retail merchant, to the extent that the
7 charges for the serving or delivery are stated separately from the
8 price of the food and food ingredients when the purchaser pays
9 the charges.
10 (c) Notwithstanding subsection (b)(5):
11 (1) in the case of retail sales of special fuel (as defined in
12 IC 6-6-2.5-22), the gross retail income is the total sales price of
13 the special fuel minus the part of that price attributable to tax
14 imposed under IC 6-6-2.5 or Section 4041 or Section 4081 of the
15 Internal Revenue Code;
16 (2) in the case of retail sales of cigarettes (as defined in
17 IC 6-7-1-2), the gross retail income is the total sales price of the
18 cigarettes including the tax imposed under IC 6-7-1; and
19 (3) in the case of retail sales of consumable material (as defined
20 in IC 6-7-4-2), vapor products (as defined in IC 6-7-4-8), and
21 closed system cartridges (as defined in IC 6-7-2-0.5) under the
22 closed system cartridge tax, the gross retail income received from
23 selling at retail is the total sales price of the consumable material
24 (as defined in IC 6-7-4-2), vapor products (as defined in
25 IC 6-7-4-8), and closed system cartridges (as defined in
26 IC 6-7-2-0.5) including the tax imposed under IC 6-7-4 and
27 IC 6-7-2-7.5.
28 (d) Gross retail income is only taxable under this article to the
29 extent that the income represents:
30 (1) the price of the property transferred, without the rendition of
31 any services; and
32 (2) except as provided in subsection (b), any bona fide charges
33 which are made for preparation, fabrication, alteration,
34 modification, finishing, completion, delivery, or other service
35 performed in respect to the property transferred before its transfer
36 and which are separately stated on the transferor's records. For
37 purposes of this subdivision, a transfer is considered to have
38 occurred after the delivery of the property to the purchaser.
39 (e) A public utility's or a power subsidiary's gross retail income
40 includes all gross retail income received by the public utility or power
41 subsidiary, including any minimum charge, flat charge, membership
42 fee, or any other form of charge or billing.
2025 IN 394—LS 7250/DI 120 18
1 SECTION 14. IC 6-2.5-4-5 IS REPEALED [EFFECTIVE JULY 1,
2 2025]. Sec. 5. A power subsidiary or a person engaged as a public
3 utility is a retail merchant making a retail transaction when the
4 subsidiary or person furnishes or sells electrical energy, natural or
5 artificial gas, water, steam, or steam heating service to a person for
6 commercial or domestic consumption.
7 SECTION 15. IC 6-2.5-4-6, AS AMENDED BY P.L.84-2011,
8 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
9 JULY 1, 2025]: Sec. 6. (a) A person is a retail merchant making a retail
10 transaction when the person:
11 (1) furnishes or sells an intrastate telecommunication service; and
12 (2) receives gross retail income from billings or statements
13 rendered to customers.
14 (b) Notwithstanding subsection (a), a person is not a retail merchant
15 making a retail transaction when:
16 (1) the person furnishes or sells telecommunication services to
17 another person described in this section or in section 5 of this
18 chapter; a power subsidiary or a person engaged as a public
19 utility that furnishes or sells electrical energy, natural or
20 artificial gas, water, steam, or steam heating service to a
21 person for commercial or domestic consumption;
22 (2) the person furnishes telecommunications services to another
23 person who is providing prepaid calling services or prepaid
24 wireless calling services in a retail transaction to customers who
25 access the services described in section 13 of this chapter;
26 (3) the person furnishes intrastate mobile telecommunications
27 service (as defined in IC 6-8.1-15-7) to a customer with a place of
28 primary use that is not located in Indiana (as determined under
29 IC 6-8.1-15); or
30 (4) the person furnishes or sells value added nonvoice data
31 services in a retail transaction to a customer.
32 (c) Subject to IC 6-2.5-12 and IC 6-8.1-15, and notwithstanding
33 subsections (a) and (b), if charges for telecommunication services,
34 ancillary services, Internet access, audio services, or video services that
35 are not taxable under this article are aggregated with and not separately
36 stated from charges subject to taxation under this article, the charges
37 for nontaxable telecommunication services, ancillary services, Internet
38 access, audio services, or video services are subject to taxation unless
39 the service provider can reasonably identify the charges not subject to
40 the tax from the service provider's books and records kept in the regular
41 course of business.
42 SECTION 16. IC 6-2.5-5-5.1, AS AMENDED BY P.L.118-2024,
2025 IN 394—LS 7250/DI 120 19
1 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 JULY 1, 2025]: Sec. 5.1. (a) As used in this section, "tangible personal
3 property" includes electricity, gas, water, and steam.
4 (b) Transactions involving tangible personal property are exempt
5 from the state gross retail tax if the person acquiring the property
6 acquires it for direct consumption as a material to be consumed in the
7 direct production of other tangible personal property in the person's
8 business of manufacturing, mining, production, processing, repairing,
9 recycling (as defined in section 45.8 of this chapter), refining, oil
10 extraction, mineral extraction, irrigation, agriculture, floriculture,
11 arboriculture, or horticulture. This exemption includes transactions
12 involving acquisitions of tangible personal property used in
13 commercial printing.
14 (c) Transactions involving tangible personal property are exempt
15 from the state gross retail tax if the person acquiring that property:
16 (1) acquires it for the person's direct consumption as a material to
17 be consumed in an industrial processing service; and
18 (2) is an industrial processor.
19 (d) Transactions involving tangible personal property are exempt
20 from the state gross retail tax if the person acquiring the property:
21 (1) acquires it for the person's direct consumption as a material to
22 be consumed in:
23 (A) the direct application of fertilizers, pesticides, fungicides,
24 seeds, and other tangible personal property; or
25 (B) the direct extraction, harvesting, or processing of
26 agricultural commodities;
27 for consideration; and
28 (2) is occupationally engaged in providing the services described
29 in subdivision (1) on property that is:
30 (A) owned or rented by another person occupationally engaged
31 in agricultural production; and
32 (B) used for agricultural production.
33 (e) Transactions involving electricity, gas, water, and steam
34 delivered through a single meter provided by a public utility are exempt
35 if the electrical energy, natural or artificial gas, water, steam, or steam
36 heat is consumed for a purpose exempted pursuant to this section and
37 the electricity, gas, water, or steam is predominately used by the
38 purchaser for one (1) or more of the purposes exempted by this section.
39 (f) A retail merchant that receives seventy-five percent (75%) or
40 more of its receipts from the sale of prepared food as defined in section
41 20(c)(4), 20(c)(5), and 20(c)(6) of this chapter, including bakery items,
42 may elect to claim an exemption equal to fifty percent (50%) of the
2025 IN 394—LS 7250/DI 120 20
1 gross retail tax imposed on transactions involving electricity purchased
2 by the retail merchant that is derived through a single meter. The
3 election must be submitted on forms provided by the department. Upon
4 acceptance of the election, the department shall issue a partial
5 exemption certificate to the utility and any third party suppliers, if
6 applicable. The election may also be submitted with a claim for refund.
7 The election is irrevocable for any period for which the partial
8 exemption has already been claimed. The election can be withdrawn on
9 a prospective basis.
10 SECTION 17. IC 6-2.5-5-8.5, AS AMENDED BY P.L.194-2023,
11 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
12 JULY 1, 2025]: Sec. 8.5. Transactions are exempt from the state gross
13 retail tax when
14 (1) a power subsidiary or person provides, installs, constructs,
15 services, or removes tangible personal property which is used in
16 connection with the furnishing of the services or commodities
17 listed in IC 6-2.5-4-5; electrical energy, natural or artificial
18 gas, water, steam, or steam heating service.
19 (2) a power subsidiary or person sells the services or commodities
20 listed in IC 6-2.5-4-5 to another public utility or power subsidiary
21 or a person described in IC 6-2.5-4-6; or
22 (3) a power subsidiary or person sells the services or commodities
23 listed in IC 6-2.5-4-5 and all of the following conditions are
24 satisfied:
25 (A) The services or commodities are sold to a business that:
26 (i) relocates all or part of its operations to a facility; or
27 (ii) expands all or part of its operations in a facility;
28 located in a military base (as defined in IC 36-7-30-1(c)), a
29 military base reuse area established under IC 36-7-14.5-12.5
30 that is or formerly was a military base (as defined in
31 IC 36-7-30-1(c)), or a qualified military base enhancement
32 area established under IC 36-7-34.
33 (B) The business uses the services or commodities in the
34 facility described in clause (A) not later than five (5) years
35 after the operations that relocated to the facility, or expanded
36 in the facility, commence.
37 (C) The sales of the services or commodities are separately
38 metered for use by the relocated or expanded operations.
39 (D) In the case of a business that uses the services or
40 commodities in a qualified military base enhancement area
41 established under IC 36-7-34-4(1), the business must satisfy at
42 least one (1) of the following criteria:
2025 IN 394—LS 7250/DI 120 21
1 (i) The business is a participant in the technology transfer
2 program conducted by the qualified military base (as defined
3 in IC 36-7-34-3).
4 (ii) The business is a United States Department of Defense
5 contractor.
6 (iii) The business and the qualified military base have a
7 mutually beneficial relationship evidenced by a
8 memorandum of understanding between the business and
9 the United States Department of Defense.
10 (E) In the case of a business that uses the services and
11 commodities in a qualified military base enhancement area
12 established under IC 36-7-34-4(2), the business must satisfy at
13 least one (1) of the following criteria:
14 (i) The business is a participant in the technology transfer
15 program conducted by the qualified military base (as defined
16 in IC 36-7-34-3).
17 (ii) The business and the qualified miliary base have a
18 mutually beneficial relationship evidenced by a
19 memorandum of understanding between the business and
20 the qualified military base (as defined in IC 36-7-34-3).
21 However, this subdivision does not apply to a business that
22 substantially reduces or ceases its operations at another location
23 in Indiana in order to relocate its operations in an area described
24 in this subdivision, unless the department determines that the
25 business had existing operations in the area described in this
26 subdivision and that the operations relocated to the area are an
27 expansion of the business's operations in the area.
28 SECTION 18. IC 6-2.5-5-10, AS AMENDED BY P.L.137-2022,
29 SECTION 25, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
30 JULY 1, 2025]: Sec. 10. Transactions involving tangible personal
31 property are exempt from the state gross retail tax, if:
32 (1) the property is classified as production plant or power
33 production expenses, according to the uniform system of accounts
34 which was adopted and prescribed for the utility by the Indiana
35 utility regulatory commission; and
36 (2) the person acquiring the property is:
37 (A) a public utility that furnishes or sells electrical energy,
38 steam, or steam heat; in a retail transaction described in
39 IC 6-2.5-4-5; or
40 (B) a power subsidiary (as defined in IC 6-2.5-1-22.5) that
41 furnishes or sells electrical energy, steam, or steam heat to a
42 public utility described in clause (A).
2025 IN 394—LS 7250/DI 120 22
1 SECTION 19. IC 6-2.5-5-11 IS AMENDED TO READ AS
2 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 11. Transactions
3 involving tangible personal property are exempt from the state gross
4 retail tax, if:
5 (1) the property is classified as production plant, storage plant,
6 production expenses, or underground storage expenses according
7 to the uniform system of accounts, which was adopted and
8 prescribed for the utility by the Indiana utility regulatory
9 commission; and
10 (2) the person acquiring the property is a public utility that
11 furnishes or sells natural or artificial gas. in a retail transaction
12 described in IC 6-2.5-4-5.
13 SECTION 20. IC 6-2.5-5-12, AS AMENDED BY P.L.88-2007,
14 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
15 JULY 1, 2025]: Sec. 12. Transactions involving tangible personal
16 property are exempt from the state gross retail tax if:
17 (1) the property is classified as source of supply plant and
18 expenses, the pumping plant and expenses, or water treatment
19 plant and expenses according to the uniform system of accounts
20 which was adopted and prescribed for the utility by the Indiana
21 utility regulatory commission; and
22 (2) the person acquiring the property is a public utility that
23 furnishes or sells water. in a retail transaction described in
24 IC 6-2.5-4-5.
25 SECTION 21. IC 6-2.5-5-16, AS AMENDED BY P.L.293-2013(ts),
26 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
27 JULY 1, 2025]: Sec. 16. Transactions involving tangible personal
28 property and accommodations public utility commodities, and public
29 utility service are exempt from the state gross retail tax, if the person
30 acquiring the property or accommodations: commodities, or service:
31 (1) is the state of Indiana, an agency or instrumentality of the
32 state, a political subdivision of the state, or an agency or
33 instrumentality of a political subdivision of the state, including a
34 county solid waste management district or a joint solid waste
35 management district established under IC 13-21 or IC 13-9.5-2
36 (before its repeal); and
37 (2) predominantly uses the property or accommodations
38 commodities, or service to perform its governmental functions.
39 SECTION 22. IC 6-2.5-5-45.8, AS AMENDED BY P.L.242-2015,
40 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
41 JULY 1, 2025]: Sec. 45.8. (a) For purposes of this section IC 6-2.5-4-5,
42 and section 30 of this chapter, the following definitions apply:
2025 IN 394—LS 7250/DI 120 23
1 (1) "Recycling" means the processing of recycling materials and
2 other tangible personal property into a product for sale if the
3 product is predominantly composed of recycling materials. The
4 term does not include the following:
5 (A) The demolition of improvements to real estate.
6 (B) The processing of tangible personal property primarily for
7 disposal in a licensed solid waste disposal facility rather than
8 for sale.
9 (C) The collection of recycling materials.
10 (2) "Recycling materials" means tangible personal property,
11 including metal, paper, glass, plastic, textile, or rubber, that:
12 (A) is considered "scrap" by industry standards or has no more
13 than scrap value;
14 (B) is a byproduct of another person's manufacturing or
15 production process;
16 (C) was previously manufactured or incorporated into a
17 product;
18 (D) would otherwise reasonably be expected to be destined for
19 disposal in a licensed solid waste disposal facility; or
20 (E) has been removed or diverted from the solid waste stream
21 for sale, use, or reuse as raw materials, regardless of whether
22 or not the materials require subsequent processing or
23 separation from each other.
24 (3) "Processing of recycling materials" means:
25 (A) receiving recycling materials and other tangible personal
26 property; and
27 (B) creating a product for sale by changing the original form,
28 use, or composition of the property (whether manually,
29 mechanically, chemically, or otherwise) through weighing,
30 sorting, grading, separating, shredding, crushing, compacting,
31 breaking, cutting, baling, shearing, torching, wire-stripping, or
32 other means.
33 (4) "Occupationally engaged in the business of recycling" means
34 to engage in recycling with the intention of doing so at a profit.
35 (5) "Recycling cart" means a manually propelled container with
36 a capacity of not more than one hundred (100) gallons of
37 recycling materials.
38 (b) Transactions involving recycling materials and other tangible
39 personal property are exempt from the state gross retail tax if:
40 (1) the person acquiring that property acquires it for the person's
41 direct use in the processing of recycling materials; and
42 (2) the person acquiring that property is occupationally engaged
2025 IN 394—LS 7250/DI 120 24
1 in the business of recycling.
2 (c) Notwithstanding subsection (a)(1)(C), transactions involving a
3 recycling cart are exempt from the state gross retail tax if the person
4 acquiring the recycling cart is occupationally engaged in the business
5 of recycling.
6 SECTION 23. IC 6-2.5-5-58 IS ADDED TO THE INDIANA CODE
7 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
8 1, 2025]: Sec. 58. (a) As used in this section, "utility service" means
9 the provision of any of the following to consumers:
10 (1) Electrical energy.
11 (2) Natural gas, either mixed with another substance or pure,
12 used for heat, light, cooling, or power.
13 (3) Water.
14 (4) Steam.
15 The term includes utility services provided by a power subsidiary
16 or public utility.
17 (b) Transactions involving the sale of utility services are exempt
18 from the state gross retail tax.
19 SECTION 24. IC 6-2.5-5.5 IS ADDED TO THE INDIANA CODE
20 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
21 JULY 1, 2025]:
22 Chapter 5.5. Sales Tax Holiday
23 Sec. 1. This chapter applies to sales that takes place:
24 (1) in the month of January, during the period:
25 (A) beginning at 12:01 a.m. on January 24; and
26 (B) ending at 11:59 p.m. on January 31;
27 of each year; and
28 (2) in the month of August, during the period:
29 (A) beginning at 12:01 a.m. on August 24; and
30 (B) ending at 11:59 p.m. on August 31;
31 of each year.
32 Sec. 2. (a) As used in this chapter, "backpack" means the
33 following:
34 (1) Messenger bags.
35 (2) Book bags.
36 (3) Packs with straps that a person wears on the person's
37 back, including a backpack with wheels if the backpack can
38 also be worn on the back.
39 (b) For purposes of this chapter, "backpack" does not include
40 the following:
41 (1) Items commonly considered luggage.
42 (2) Briefcases.
2025 IN 394—LS 7250/DI 120 25
1 (3) Athletic bags.
2 (4) Duffel bags.
3 (5) Gym bags.
4 (6) Computer bags.
5 Sec. 3. (a) As used in this chapter, "clothing" means all human
6 wearing apparel suitable for general use, including the following:
7 (1) Aprons (household).
8 (2) Athletic socks.
9 (3) Baseball jerseys.
10 (4) Belts with attached buckles.
11 (5) Blouses.
12 (6) Boots (general purpose, cowboy, hiking).
13 (7) Bow ties.
14 (8) Bowling shirts.
15 (9) Bras.
16 (10) Chef uniforms.
17 (11) Children's novelty costumes.
18 (12) Clerical vestments.
19 (13) Coats and wraps.
20 (14) Coveralls.
21 (15) Diapers (adult and baby, cloth and disposable).
22 (16) Dresses.
23 (17) Earmuffs (cold weather).
24 (18) Employee uniforms (unless rented).
25 (19) Football jerseys.
26 (20) Gloves (generally, dress, leather).
27 (21) Golf accessories (golf dresses, golf jackets and
28 windbreakers, golf shirts, golf skirts).
29 (22) Graduation caps and gowns.
30 (23) Gym suits and uniforms.
31 (24) Hats.
32 (25) Hooded shirts and hooded sweatshirts.
33 (26) Hosiery including support hosiery.
34 (27) Jackets.
35 (28) Jeans.
36 (29) Jogging apparel.
37 (30) Knitted caps or hats.
38 (31) Leg warmers.
39 (32) Leotards and tights.
40 (33) Masks and costumes.
41 (34) Neckwear, neckties, and ties.
42 (35) Painter pants.
2025 IN 394—LS 7250/DI 120 26
1 (36) Pants.
2 (37) Panty hose.
3 (38) Raincoats and ponchos.
4 (39) Rain hats.
5 (40) Religious clothing.
6 (41) Robes.
7 (42) Safety shoes (adaptable for street wear).
8 (43) Scarves.
9 (44) Scout uniforms.
10 (45) Shawls and wraps.
11 (46) Shirts.
12 (47) Shirts (hooded).
13 (48) Shoes (generally, boat, cross trainers, dress, flip flops,
14 jellies, no cleat running, suitable for everyday safety, sandals,
15 slippers, sneakers, tennis, walking).
16 (49) Shorts.
17 (50) Skirts.
18 (51) Sleepwear, nightgowns, nightshirts, and pajamas.
19 (52) Slips.
20 (53) Soccer socks.
21 (54) Socks.
22 (55) Suits, slacks, and jackets.
23 (56) Support hosiery.
24 (57) Suspenders.
25 (58) Sweatshirts.
26 (59) Sweat suits.
27 (60) Sweaters.
28 (61) Swimming suits.
29 (62) Tennis accessories (tennis dresses, tennis shorts, tennis
30 skirts).
31 (63) Tights.
32 (64) Trousers.
33 (65) Underclothes.
34 (66) Underpants.
35 (67) Undershirts.
36 (68) Uniforms (school, work, nurse, waitress, military, postal,
37 police, fire).
38 (69) Vests (generally, noninflatable/nonflotation fishing,
39 hunting).
40 (70) Work clothes.
41 (71) Work uniforms.
42 (72) Workout clothes.
2025 IN 394—LS 7250/DI 120 27
1 (b) For purposes of this chapter, "clothing" does not include the
2 following:
3 (1) Accessories (generally, barrettes, belt buckles sold
4 separately, bobby pins, briefcases, elastic ponytail holders,
5 hair bows, hair clips, handbags, handkerchiefs, headbands,
6 jewelry, key cases, purses, wallets, watch bands, watches).
7 (2) Alterations.
8 (3) Aprons (welders).
9 (4) Backpacks (unless for use by elementary/secondary
10 students).
11 (5) Baseball accessories (cleats, gloves, or pants).
12 (6) Bathing caps.
13 (7) Belts for weight lifting.
14 (8) Bicycle shoes (cleated).
15 (9) Boots (cleated or spiked climbing, fishing, overshoes and
16 galoshes, rubber work boots, ski, waders).
17 (10) Bowling shoes (rented and sold).
18 (11) Buttons and zippers.
19 (12) Chest protectors.
20 (13) Cloth and lace, knitting yarns, and other fabrics.
21 (14) Clothing repair items such as thread, buttons, tapes, and
22 iron-on patches.
23 (15) Earmuffs (noise cancellation or noise canceling).
24 (16) Elbow pads.
25 (17) Fins (swim).
26 (18) Football accessories (pads, pants).
27 (19) Gloves (batting, bicycle, garden, hockey, rubber, surgical,
28 tennis, work).
29 (20) Goggles.
30 (21) Golf accessories (gloves, purses, shoes).
31 (22) Hair nets, bows, and clips.
32 (23) Hard hats.
33 (24) Helmets (bike, baseball, football, hockey, motorcycle,
34 sports).
35 (25) Insoles.
36 (26) Jewelry.
37 (27) Knee pads.
38 (28) Life jackets and vests.
39 (29) Masks (protective, welder, umpire, swim).
40 (30) Monogramming services.
41 (31) Overshoes and rubber shoes.
42 (32) Pads (football, hockey, soccer, elbow, knee, shoulder).
2025 IN 394—LS 7250/DI 120 28
1 (33) Paint or dust respirators and incidental supplies.
2 (34) Patterns.
3 (35) Protective gloves.
4 (36) Protective masks.
5 (37) Rented clothing or footwear (including uniforms,
6 formalwear, and costumes).
7 (38) Repair clothing or footwear.
8 (39) Ribbons.
9 (40) Safety accessories (clothing normally worn in hazardous
10 occupations, nonprescription glasses, nonadaptable for street
11 wear shoes).
12 (41) Sewing patterns.
13 (42) Shin guards and padding.
14 (43) Shoe inserts.
15 (44) Shoelaces.
16 (45) Shoes (ballet, baseball cleats, cleated bicycle, bowling,
17 cleated or spiked, fishing boots/waders, football, golf, jazz and
18 dance, overshoes, cleated soccer, tap dance, track and cleats,
19 wading/water sport).
20 (46) Shoe repairs.
21 (47) Shoulder pads (for dresses, jackets).
22 (48) Shoulder pads (football, hockey, sports).
23 (49) Shower caps.
24 (50) Skates (ice and roller).
25 (51) Ski boots (snow).
26 (52) Ski suits (snow).
27 (53) Ski vests (snow).
28 (54) Sports helmets.
29 (55) Sports pads (football, hockey, soccer, knee, elbow,
30 shoulder).
31 (56) Sunglasses (except prescription).
32 (57) Sweatbands (arm, wrist, head).
33 (58) Swimming masks and goggles.
34 (59) Track shoes and cleats.
35 (60) Umbrellas.
36 (61) Vests (bulletproof, flotation, scuba).
37 (62) Water ski vests.
38 (63) Wet and dry suits.
39 (64) Wrist bands.
40 Sec. 4. (a) As used in this chapter, "computer" means an
41 electronic device that accepts information in digital or similar form
42 and manipulates it for a result based on a sequence of instructions.
2025 IN 394—LS 7250/DI 120 29
1 The term includes laptop computers.
2 (b) For purposes of this chapter, "computer" does not include
3 the following:
4 (1) Video game consoles.
5 (2) Computer storage media.
6 (3) Handheld electronic schedulers.
7 (4) Cellular phones.
8 (5) Personal digital assistants.
9 Sec. 5. As used in this chapter, "school supply" means:
10 (1) Binders.
11 (2) Book bags.
12 (3) Calculators.
13 (4) Cellophane tape.
14 (5) Blackboard chalk.
15 (6) Compasses.
16 (7) Composition books.
17 (8) Crayons.
18 (9) Erasers.
19 (10) Folders (expandable, pocket, plastic, and manila).
20 (11) Glue, paste, and paste sticks.
21 (12) Highlighters.
22 (13) Index cards.
23 (14) Index card boxes.
24 (15) Legal pads.
25 (16) Lunch boxes.
26 (17) Markers.
27 (18) Notebooks.
28 (19) Paper (loose leaf ruled notebook paper, copy paper,
29 graph paper, tracing paper, manila paper, colored paper,
30 poster board, and construction paper).
31 (20) Pencil boxes and other school supply boxes.
32 (21) Pencil sharpeners.
33 (22) Pencils.
34 (23) Pens.
35 (24) Protractors.
36 (25) Rulers.
37 (26) Scissors.
38 (27) Writing tablets.
39 Sec. 6. The sale of a school supply, backpack, clothing, or
40 computer is exempt from the state gross retail tax if:
41 (1) the item is purchased for use by:
42 (A) a student in a public or private elementary or
2025 IN 394—LS 7250/DI 120 30
1 secondary school; or
2 (B) a student attending a postsecondary school;
3 in Indiana; and
4 (2) the sale takes place during the period set forth in section
5 1 of this chapter.
6 SECTION 25. IC 6-2.5-6-10, AS AMENDED BY P.L.218-2017,
7 SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
8 JULY 1, 2025]: Sec. 10. (a) In order to compensate retail merchants
9 and those required to remit gasoline use tax for collecting and timely
10 remitting the state gross retail tax, the state use tax, and the gasoline
11 use tax, every retail merchant or person required to remit the gasoline
12 use tax, except as provided in subsection (c), is entitled to deduct and
13 retain from the amount of those taxes otherwise required to be remitted
14 under IC 6-2.5-3.5 or under this chapter, if timely remitted, a retail
15 merchant's collection allowance.
16 (b) The allowance equals a percentage of the retail merchant's state
17 gross retail and use tax or the person's gasoline use tax liability accrued
18 during a calendar year, specified as follows:
19 (1) Seventy-three hundredths percent (0.73%), if the retail
20 merchant's state gross retail and use tax or gasoline use tax
21 liability accrued during the state fiscal year ending on June 30 of
22 the immediately preceding calendar year did not exceed sixty
23 thousand dollars ($60,000).
24 (2) Fifty-three hundredths percent (0.53%), if the retail merchant's
25 state gross retail and use tax or gasoline use tax liability accrued
26 during the state fiscal year ending on June 30 of the immediately
27 preceding calendar year:
28 (A) was greater than sixty thousand dollars ($60,000); and
29 (B) did not exceed six hundred thousand dollars ($600,000).
30 (3) Twenty-six hundredths percent (0.26%), if the retail
31 merchant's state gross retail and use tax liability or the person's
32 gasoline use tax accrued during the state fiscal year ending on
33 June 30 of the immediately preceding calendar year was greater
34 than six hundred thousand dollars ($600,000).
35 (c) A retail merchant described in IC 6-2.5-4-5 or IC 6-2.5-4-6 is not
36 entitled to the allowance provided by this section. A retail merchant is
37 not entitled to the allowance provided by this section with respect to
38 gasoline use taxes imposed by IC 6-2.5-3.5.
39 SECTION 26. IC 6-2.5-8-1, AS AMENDED BY P.L.118-2024,
40 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
41 JULY 1, 2025]: Sec. 1.(a) A retail merchant may not make a retail
42 transaction in Indiana, unless the retail merchant has applied for a
2025 IN 394—LS 7250/DI 120 31
1 registered retail merchant's certificate.
2 (b) A retail merchant may obtain a registered retail merchant's
3 certificate by filing an application with the department and paying a
4 registration fee of twenty-five dollars ($25) for each place of business
5 listed on the application. The retail merchant shall also provide such
6 security for payment of the tax as the department may require under
7 IC 6-2.5-6-12.
8 (c) The retail merchant shall list on the application the location
9 (including the township) of each place of business where the retail
10 merchant makes retail transactions. However, if the retail merchant
11 does not have a fixed place of business, the retail merchant shall list the
12 retail merchant's residence as the retail merchant's place of business. In
13 addition, a public utility may list only its principal Indiana office as its
14 place of business for sales of public utility commodities or service, but
15 the utility must also list on the application the places of business where
16 it makes retail transactions other than sales of public utility
17 commodities or service.
18 (d) Upon receiving a proper application, the correct fee, and the
19 security for payment, if required, the department shall issue to the retail
20 merchant a separate registered retail merchant's certificate for each
21 place of business listed on the application. Each certificate shall bear
22 a serial number and the location of the place of business for which it is
23 issued.
24 (e) The department may deny an application for a registered retail
25 merchant's certificate if the applicant's business is owned, operated,
26 managed, or otherwise controlled by a person who the department has
27 determined:
28 (1) failed to:
29 (A) file all tax returns or information reports with the
30 department for listed taxes; or
31 (B) pay all taxes, penalties, and interest to the department for
32 listed taxes; and
33 (2) the business of the person who has failed to file all tax returns
34 or information reports under subdivision (1)(A) or who has failed
35 to pay all taxes, penalties, and interest under subdivision (1)(B)
36 is substantially similar to the business of the applicant.
37 (f) If a retail merchant intends to make retail transactions during a
38 calendar year at a new Indiana place of business, the retail merchant
39 must file a supplemental application and pay the fee for that place of
40 business.
41 (g) Except as provided in subsection (i), a registered retail
42 merchant's certificate is valid for two (2) years after the date the
2025 IN 394—LS 7250/DI 120 32
1 registered retail merchant's certificate is originally issued or renewed.
2 If the retail merchant has filed all returns and remitted all listed taxes
3 that the retail merchant is currently obligated to file or remit, the
4 department shall renew the registered retail merchant's certificate
5 within thirty (30) days after the expiration date, at no cost to the retail
6 merchant. Before issuing or renewing the registered retail merchant
7 certification, the department may require the following to be provided:
8 (1) The names and addresses of the retail merchant's principal
9 employees, agents, or representatives.
10 (2) The location of all of the retail merchant's places of business
11 in Indiana, including offices and distribution houses.
12 (3) Any other information that the department requests.
13 (h) The department may not renew a registered retail merchant
14 certificate of a retail merchant who has not filed all returns and
15 remitted all listed taxes that the retail merchant is currently obligated
16 to file or remit. The department, at least sixty (60) days before the date
17 on which a retail merchant's registered retail merchant's certificate
18 expires, shall notify a retail merchant who has not filed all returns and
19 remitted all listed taxes that the retail merchant is currently obligated
20 to file or remit that the department will not renew the retail merchant's
21 registered retail merchant's certificate.
22 (i) If:
23 (1) a retail merchant has been notified by the department that the
24 retail merchant has not filed all returns and remitted all listed
25 taxes that the retail merchant is currently obligated to file or remit
26 in accordance with subsection (h); and
27 (2) the retail merchant files all returns and pays the outstanding
28 liability before the expiration of the retail merchant's registered
29 retail merchant's certificate;
30 the department shall renew the retail merchant's registered retail
31 merchant's certificate for one (1) year.
32 (j) The department may permit an out-of-state retail merchant to
33 collect the gross retail tax in instances where the retail merchant has
34 not met the threshold in IC 6-2.5-2-1(d). However, before the
35 out-of-state retail merchant may collect the tax, the out-of-state retail
36 merchant must obtain a registered retail merchant's certificate in the
37 manner provided by this section. Upon receiving the certificate, the
38 out-of-state retail merchant becomes subject to the same conditions and
39 duties as an Indiana retail merchant and must then collect the gross
40 retail tax due on all retail transactions that the out-of-state retail
41 merchant knows are sourced to Indiana pursuant to IC 6-2.5-13-1.
42 (k) Except as provided in subsection (l), the department shall submit
2025 IN 394—LS 7250/DI 120 33
1 to the township assessor, or the county assessor if there is no township
2 assessor for the township, before January 15 of each year:
3 (1) the name of each retail merchant that has newly obtained a
4 registered retail merchant's certificate during the preceding year
5 for a place of business located in the township or county;
6 (2) the address of each place of business of the taxpayer in the
7 township or county described in subdivision (1);
8 (3) the name of each retail merchant that:
9 (A) held a registered retail merchant's certificate at any time
10 during the preceding year for a place of business located in the
11 township or county; and
12 (B) had ceased to hold the registered retail merchant's
13 certificate at the end of the preceding year for the place of
14 business; and
15 (4) the address of each place of business described in subdivision
16 (3).
17 (l) If the duties of the township assessor have been transferred to the
18 county assessor as described in IC 6-1.1-1-24, the department shall
19 submit the information listed in subsection (k) to the county assessor.
20 SECTION 27. IC 6-2.5-8-8, AS AMENDED BY THE TECHNICAL
21 CORRECTIONS BILL OF THE 2025 GENERAL ASSEMBLY, IS
22 AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2025]:
23 Sec. 8. (a) A person, authorized under subsection (b), who makes a
24 purchase in a transaction which is exempt from the state gross retail
25 and use taxes, may issue an exemption certificate to the seller instead
26 of paying the tax. Except as provided in subsection (c), the person shall
27 issue the certificate on forms and in the manner prescribed by the
28 department on the department's Internet web site. website. A seller
29 accepting a proper exemption certificate under this section has no duty
30 to collect or remit the state gross retail or use tax on that purchase.
31 (b) The following are the only persons authorized to issue
32 exemption certificates:
33 (1) Retail merchants, wholesalers, and manufacturers, who are
34 registered with the department under this chapter.
35 (2) Persons who are exempt from the state gross retail tax under
36 IC 6-2.5-4-5 and who receive an exemption certificate from the
37 department.
38 (3) (2) Other persons who are exempt from the state gross retail
39 tax with respect to any part of their purchases.
40 (c) Organizations that are exempt from the state gross retail tax
41 under IC 6-2.5-5-21, IC 6-2.5-5-25, or IC 6-2.5-5-26 and that are
42 registered with the department pursuant to IC 6-2.5-5-25(c) shall be
2025 IN 394—LS 7250/DI 120 34
1 electronically issued an exemption certificate by the department.
2 (d) The department may also allow a person to issue a blanket
3 exemption certificate to cover exempt purchases over a stated period
4 of time. The department may impose conditions on the use of the
5 blanket exemption certificate and restrictions on the kind or category
6 of purchases that are exempt.
7 (e) A seller that accepts an incomplete exemption certificate under
8 subsection (a) is not relieved of the duty to collect gross retail or use
9 tax on the sale unless the seller obtains:
10 (1) a fully completed exemption certificate; or
11 (2) the relevant data to complete the exemption certificate;
12 within ninety (90) days after the sale.
13 (f) If a seller has accepted an incomplete exemption certificate
14 under subsection (a) and the department requests that the seller
15 substantiate the exemption, within one hundred twenty (120) days after
16 the department makes the request the seller shall:
17 (1) obtain a fully completed exemption certificate; or
18 (2) prove by other means that the transaction was not subject to
19 state gross retail or use tax.
20 (g) A power subsidiary (as defined in IC 6-2.5-1-22.5) or a person
21 selling the services or commodities listed in IC 6-2.5-4-5 who accepts
22 an exemption certificate issued by the department to a person who is
23 exempt from the state gross retail tax under IC 6-2.5-4-5 is relieved
24 from the duty to collect state gross retail or use tax on the sale of the
25 services or commodities listed in IC 6-2.5-4-5 until notified by the
26 department that the exemption certificate has expired or has been
27 revoked. If the department notifies a power subsidiary or a person
28 selling the services or commodities listed in IC 6-2.5-4-5 that a person's
29 exemption certificate has expired or has been revoked, the power
30 subsidiary or person selling the services or commodities listed in
31 IC 6-2.5-4-5 shall begin collecting state gross retail tax on the sale of
32 the services or commodities listed in IC 6-2.5-4-5 to the person whose
33 exemption certificate has expired or been revoked not later than thirty
34 (30) days after the date of the department's notice. An exemption
35 certificate issued by the department to a person who is exempt from the
36 state gross retail tax under IC 6-2.5-4-5 remains valid for that person
37 regardless of any subsequent one (1) for one (1) meter number changes
38 with respect to that person that are required, made, or initiated by a
39 power subsidiary or a person selling the services or commodities listed
40 in IC 6-2.5-4-5, unless the department revokes the exemption
41 certificate. Within thirty (30) days after the final day of each calendar
42 year quarter, a power subsidiary or a person selling the services or
2025 IN 394—LS 7250/DI 120 35
1 commodities listed in IC 6-2.5-4-5 shall report to the department any
2 meter number changes made during the immediately preceding
3 calendar year quarter and distinguish between the one (1) for one (1)
4 meter changes and the one (1) for multiple meter changes made during
5 the calendar year quarter. A power subsidiary or a person selling the
6 services or commodities listed in IC 6-2.5-4-5 shall maintain records
7 sufficient to document each one (1) to one (1) meter change. A person
8 may request the department to reissue an exemption certificate with a
9 new meter number in the event of a one (1) to one (1) meter change.
10 Except for a person to whom a blanket utility exemption applies, any
11 meter number changes not involving a one (1) to one (1) relationship
12 will no longer be exempt and will require the person to submit a new
13 utility exemption application for the new meters. Until an application
14 for a new meter is approved, the new meter is subject to the state gross
15 retail tax and the power subsidiary or the person selling the services or
16 commodities listed in IC 6-2.5-4-5 is required to collect the state gross
17 retail tax from the date of the meter change.
18 SECTION 28. IC 6-2.5-15-14, AS ADDED BY P.L.256-2019,
19 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20 JULY 1, 2025]: Sec. 14. (a) A qualified data center user that holds an
21 interest in a qualified data center may apply to the corporation for a
22 specific transaction award certificate to make purchases other than the
23 purchase of utilities described in IC 6-2.5-4-5, that are exempt under
24 this chapter. The request must be on a form prescribed by the
25 corporation.
26 (b) The corporation has exclusive authority over issues related to
27 issuing a specific transaction award certificate.
28 (c) If the corporation issues a specific transaction award certificate
29 under this chapter, the certificate must state that the facility is a
30 qualified data center.
31 (d) A specific transaction award certificate issued by the corporation
32 shall expire not later than:
33 (A) twenty-five (25) years after the date of issuance; or
34 (B) fifty (50) years after the date of issuance if the qualified
35 investment is seven hundred fifty million dollars ($750,000,000)
36 or greater.
37 SECTION 29. IC 6-2.5-15-17, AS ADDED BY P.L.256-2019,
38 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 JULY 1, 2025]: Sec. 17. A qualified data center user is not entitled to
40 the exemption provided by section 16 of this chapter unless the
41 qualified data center user provides the seller with an exemption
42 certificate on a form prescribed by the department and a copy of the
2025 IN 394—LS 7250/DI 120 36
1 specific transaction award certificate issued by the corporation. In the
2 case of utilities described in IC 6-2.5-4-5, the qualified data center user
3 may issue an exemption certificate on a form prescribed by the
4 department and a copy of the specific transaction award certificate
5 issued by the corporation to cover all utility purchases from that seller.
6 However, for the corporation to issue a specific transaction award
7 certificate for utilities described in IC 6-2.5-4-5, the qualified data
8 center user must agree to report and remit use tax under this article to
9 the department on the part of the utility purchases used for
10 administration of the facility.
11 SECTION 30. IC 6-3-1-3.5, AS AMENDED BY P.L.9-2024,
12 SECTION 185, IS AMENDED TO READ AS FOLLOWS
13 [EFFECTIVE JANUARY 1, 2026]: Sec. 3.5. When used in this article,
14 the term "adjusted gross income" shall mean the following:
15 (a) In the case of all individuals, "adjusted gross income" (as
16 defined in Section 62 of the Internal Revenue Code), modified as
17 follows:
18 (1) Subtract income that is exempt from taxation under this article
19 by the Constitution and statutes of the United States.
20 (2) Except as provided in subsection (c), add an amount equal to
21 any deduction or deductions allowed or allowable pursuant to
22 Section 62 of the Internal Revenue Code for taxes based on or
23 measured by income and levied at the state level by any state of
24 the United States.
25 (3) Subtract the following amounts:
26 (A) This clause applies to an individual with an adjusted
27 gross income (as defined in Section 62 of the Internal
28 Revenue Code) of more than two hundred thousand dollars
29 ($200,000) and to a married couple with an adjusted gross
30 income (as defined in Section 62 of the Internal Revenue
31 Code) of more than four hundred thousand dollars
32 ($400,000). One thousand dollars ($1,000), or in the case of a
33 joint return filed by a husband and wife, subtract for each
34 spouse one thousand dollars ($1,000).
35 (B) This clause applies to an individual with an adjusted
36 gross income (as defined in Section 62 of the Internal
37 Revenue Code) of not more than two hundred thousand
38 dollars ($200,000) and to a married couple with an
39 adjusted gross income (as defined in Section 62 of the
40 Internal Revenue Code) of not more than four hundred
41 thousand dollars ($400,000). Two thousand five hundred
42 dollars ($2,500), or in the case of a joint return filed by a
2025 IN 394—LS 7250/DI 120 37
1 husband and wife, subtract for each spouse three thousand
2 five hundred dollars ($3,500).
3 (4) Subtract the following amounts:
4 (A) This clause applies to an individual with an adjusted
5 gross income (as defined in Section 62 of the Internal
6 Revenue Code) of more than two hundred thousand dollars
7 ($200,000) and to a married couple with an adjusted gross
8 income (as defined in Section 62 of the Internal Revenue
9 Code) of more than four hundred thousand dollars
10 ($400,000). One thousand dollars ($1,000) for:
11 (A) (i) each of the exemptions provided by Section 151(c) of
12 the Internal Revenue Code (as effective January 1, 2017);
13 (B) (ii) each additional amount allowable under Section
14 63(f) of the Internal Revenue Code; and
15 (C) (iii) the spouse of the taxpayer if a separate return is
16 made by the taxpayer and if the spouse, for the calendar year
17 in which the taxable year of the taxpayer begins, has no
18 gross income and is not the dependent of another taxpayer.
19 (B) This clause applies to an individual with an adjusted
20 gross income (as defined in Section 62 of the Internal
21 Revenue Code) of not more than two hundred thousand
22 dollars ($200,000) and to a married couple with an
23 adjusted gross income (as defined in Section 62 of the
24 Internal Revenue Code) of not more than four hundred
25 thousand dollars ($400,000). Three thousand five hundred
26 dollars ($3,500), for:
27 (i) each of the exemptions provided by Section 151(c) of
28 the Internal Revenue Code (as effective January 1,
29 2017);
30 (ii) each additional amount allowable under Section 63(f)
31 of the Internal Revenue Code; and
32 (iii) the spouse of the taxpayer if a separate return is
33 made by the taxpayer and if the spouse, for the calendar
34 year in which the taxable year of the taxpayer begins,
35 has no gross income and is not the dependent of another
36 taxpayer.
37 (5) Subtract each of the following:
38 (A) One thousand five hundred dollars ($1,500) for each of the
39 exemptions allowed under Section 151(c)(1)(B) of the Internal
40 Revenue Code (as effective January 1, 2004), except that in
41 the first taxable year in which a particular exemption is
42 allowed under Section 151(c)(1)(B) of the Internal Revenue
2025 IN 394—LS 7250/DI 120 38
1 Code (as effective January 1, 2004), subtract three thousand
2 dollars ($3,000) for that exemption.
3 (B) One thousand five hundred dollars ($1,500) for each
4 exemption allowed under Section 151(c) of the Internal
5 Revenue Code (as effective January 1, 2017) for an individual:
6 (i) who is less than nineteen (19) years of age or is a
7 full-time student who is less than twenty-four (24) years of
8 age;
9 (ii) for whom the taxpayer is the legal guardian; and
10 (iii) for whom the taxpayer does not claim an exemption
11 under clause (A).
12 (C) Five hundred dollars ($500) for each additional amount
13 allowable under Section 63(f)(1) of the Internal Revenue Code
14 if the federal adjusted gross income of the taxpayer, or the
15 taxpayer and the taxpayer's spouse in the case of a joint return,
16 is less than forty thousand dollars ($40,000). In the case of a
17 married individual filing a separate return, the qualifying
18 income amount in this clause is equal to twenty thousand
19 dollars ($20,000).
20 (D) Three thousand dollars ($3,000) for each exemption
21 allowed under Section 151(c) of the Internal Revenue Code (as
22 effective January 1, 2017) for an individual who is:
23 (i) an adopted child of the taxpayer; and
24 (ii) less than nineteen (19) years of age or is a full-time
25 student who is less than twenty-four (24) years of age.
26 This amount is in addition to any amount subtracted under
27 clause (A) or (B).
28 This amount is in addition to the amount subtracted under
29 subdivision (4).
30 (6) Subtract any amounts included in federal adjusted gross
31 income under Section 111 of the Internal Revenue Code as a
32 recovery of items previously deducted as an itemized deduction
33 from adjusted gross income.
34 (7) Subtract any amounts included in federal adjusted gross
35 income under the Internal Revenue Code which amounts were
36 received by the individual as supplemental railroad retirement
37 annuities under 45 U.S.C. 231 and which are not deductible under
38 subdivision (1).
39 (8) Subtract an amount equal to the amount of federal Social
40 Security and Railroad Retirement benefits included in a taxpayer's
41 federal gross income by Section 86 of the Internal Revenue Code.
42 (9) In the case of a nonresident taxpayer or a resident taxpayer
2025 IN 394—LS 7250/DI 120 39
1 residing in Indiana for a period of less than the taxpayer's entire
2 taxable year, the total amount of the deductions allowed pursuant
3 to subdivisions (3), (4), and (5) shall be reduced to an amount
4 which bears the same ratio to the total as the taxpayer's income
5 taxable in Indiana bears to the taxpayer's total income.
6 (10) In the case of an individual who is a recipient of assistance
7 under IC 12-10-6-1, IC 12-10-6-2.1, IC 12-15-2-2, or IC 12-15-7,
8 subtract an amount equal to that portion of the individual's
9 adjusted gross income with respect to which the individual is not
10 allowed under federal law to retain an amount to pay state and
11 local income taxes.
12 (11) In the case of an eligible individual, subtract the amount of
13 a Holocaust victim's settlement payment included in the
14 individual's federal adjusted gross income.
15 (12) Subtract an amount equal to the portion of any premiums
16 paid during the taxable year by the taxpayer for a qualified long
17 term care policy (as defined in IC 12-15-39.6-5) for the taxpayer
18 or the taxpayer's spouse if the taxpayer and the taxpayer's spouse
19 file a joint income tax return or the taxpayer is otherwise entitled
20 to a deduction under this subdivision for the taxpayer's spouse, or
21 both.
22 (13) Subtract an amount equal to the lesser of:
23 (A) two thousand five hundred dollars ($2,500), or one
24 thousand two hundred fifty dollars ($1,250) in the case of a
25 married individual filing a separate return; or
26 (B) the amount of property taxes that are paid during the
27 taxable year in Indiana by the individual on the individual's
28 principal place of residence.
29 (14) Subtract an amount equal to the amount of a September 11
30 terrorist attack settlement payment included in the individual's
31 federal adjusted gross income.
32 (15) Add or subtract the amount necessary to make the adjusted
33 gross income of any taxpayer that owns property for which bonus
34 depreciation was allowed in the current taxable year or in an
35 earlier taxable year equal to the amount of adjusted gross income
36 that would have been computed had an election not been made
37 under Section 168(k) of the Internal Revenue Code to apply bonus
38 depreciation to the property in the year that it was placed in
39 service.
40 (16) Add an amount equal to any deduction allowed under
41 Section 172 of the Internal Revenue Code (concerning net
42 operating losses).
2025 IN 394—LS 7250/DI 120 40
1 (17) Add or subtract the amount necessary to make the adjusted
2 gross income of any taxpayer that placed Section 179 property (as
3 defined in Section 179 of the Internal Revenue Code) in service
4 in the current taxable year or in an earlier taxable year equal to
5 the amount of adjusted gross income that would have been
6 computed had an election for federal income tax purposes not
7 been made for the year in which the property was placed in
8 service to take deductions under Section 179 of the Internal
9 Revenue Code in a total amount exceeding the sum of:
10 (A) twenty-five thousand dollars ($25,000) to the extent
11 deductions under Section 179 of the Internal Revenue Code
12 were not elected as provided in clause (B); and
13 (B) for taxable years beginning after December 31, 2017, the
14 deductions elected under Section 179 of the Internal Revenue
15 Code on property acquired in an exchange if:
16 (i) the exchange would have been eligible for
17 nonrecognition of gain or loss under Section 1031 of the
18 Internal Revenue Code in effect on January 1, 2017;
19 (ii) the exchange is not eligible for nonrecognition of gain or
20 loss under Section 1031 of the Internal Revenue Code; and
21 (iii) the taxpayer made an election to take deductions under
22 Section 179 of the Internal Revenue Code with regard to the
23 acquired property in the year that the property was placed
24 into service.
25 The amount of deductions allowable for an item of property
26 under this clause may not exceed the amount of adjusted gross
27 income realized on the property that would have been deferred
28 under the Internal Revenue Code in effect on January 1, 2017.
29 (18) Subtract an amount equal to the amount of the taxpayer's
30 qualified military income that was not excluded from the
31 taxpayer's gross income for federal income tax purposes under
32 Section 112 of the Internal Revenue Code.
33 (19) Subtract income that is:
34 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
35 derived from patents); and
36 (B) included in the individual's federal adjusted gross income
37 under the Internal Revenue Code.
38 (20) Add an amount equal to any income not included in gross
39 income as a result of the deferral of income arising from business
40 indebtedness discharged in connection with the reacquisition after
41 December 31, 2008, and before January 1, 2011, of an applicable
42 debt instrument, as provided in Section 108(i) of the Internal
2025 IN 394—LS 7250/DI 120 41
1 Revenue Code. Subtract the amount necessary from the adjusted
2 gross income of any taxpayer that added an amount to adjusted
3 gross income in a previous year to offset the amount included in
4 federal gross income as a result of the deferral of income arising
5 from business indebtedness discharged in connection with the
6 reacquisition after December 31, 2008, and before January 1,
7 2011, of an applicable debt instrument, as provided in Section
8 108(i) of the Internal Revenue Code.
9 (21) Add the amount excluded from federal gross income under
10 Section 103 of the Internal Revenue Code for interest received on
11 an obligation of a state other than Indiana, or a political
12 subdivision of such a state, that is acquired by the taxpayer after
13 December 31, 2011. For purposes of this subdivision:
14 (A) if the taxpayer receives interest from a pass through entity,
15 a regulated investment company, a hedge fund, or similar
16 arrangement, the taxpayer will be considered to have acquired
17 the obligation on the date the entity acquired the obligation;
18 (B) if ownership of the obligation occurs by means other than
19 a purchase, the date of acquisition of the obligation shall be
20 the date ownership of the obligation was transferred, except to
21 the extent provided in clause (A), and if a portion of the
22 obligation is acquired on multiple dates, the date of acquisition
23 shall be considered separately for each portion of the
24 obligation; and
25 (C) if ownership of the obligation occurred as the result of a
26 refinancing of another obligation, the acquisition date shall be
27 the date on which the obligation was refinanced.
28 (22) Subtract an amount as described in Section 1341(a)(2) of the
29 Internal Revenue Code to the extent, if any, that the amount was
30 previously included in the taxpayer's adjusted gross income for a
31 prior taxable year.
32 (23) For taxable years beginning after December 25, 2016, add an
33 amount equal to the deduction for deferred foreign income that
34 was claimed by the taxpayer for the taxable year under Section
35 965(c) of the Internal Revenue Code.
36 (24) Subtract any interest expense paid or accrued in the current
37 taxable year but not deducted as a result of the limitation imposed
38 under Section 163(j)(1) of the Internal Revenue Code. Add any
39 interest expense paid or accrued in a previous taxable year but
40 allowed as a deduction under Section 163 of the Internal Revenue
41 Code in the current taxable year. For purposes of this subdivision,
42 an interest expense is considered paid or accrued only in the first
2025 IN 394—LS 7250/DI 120 42
1 taxable year the deduction would have been allowable under
2 Section 163 of the Internal Revenue Code if the limitation under
3 Section 163(j)(1) of the Internal Revenue Code did not exist.
4 (25) Subtract the amount that would have been excluded from
5 gross income but for the enactment of Section 118(b)(2) of the
6 Internal Revenue Code for taxable years ending after December
7 22, 2017.
8 (26) For taxable years beginning after December 31, 2019, and
9 before January 1, 2021, add an amount of the deduction claimed
10 under Section 62(a)(22) of the Internal Revenue Code.
11 (27) For taxable years beginning after December 31, 2019, for
12 payments made by an employer under an education assistance
13 program after March 27, 2020:
14 (A) add the amount of payments by an employer that are
15 excluded from the taxpayer's federal gross income under
16 Section 127(c)(1)(B) of the Internal Revenue Code; and
17 (B) deduct the interest allowable under Section 221 of the
18 Internal Revenue Code, if the disallowance under Section
19 221(e)(1) of the Internal Revenue Code did not apply to the
20 payments described in clause (A). For purposes of applying
21 Section 221(b) of the Internal Revenue Code to the amount
22 allowable under this clause, the amount under clause (A) shall
23 not be added to adjusted gross income.
24 (28) Add an amount equal to the remainder of:
25 (A) the amount allowable as a deduction under Section 274(n)
26 of the Internal Revenue Code; minus
27 (B) the amount otherwise allowable as a deduction under
28 Section 274(n) of the Internal Revenue Code, if Section
29 274(n)(2)(D) of the Internal Revenue Code was not in effect
30 for amounts paid or incurred after December 31, 2020.
31 (29) For taxable years beginning after December 31, 2017, and
32 before January 1, 2021, add an amount equal to the excess
33 business loss of the taxpayer as defined in Section 461(l)(3) of the
34 Internal Revenue Code. In addition:
35 (A) If a taxpayer has an excess business loss under this
36 subdivision and also has modifications under subdivisions (15)
37 and (17) for property placed in service during the taxable year,
38 the taxpayer shall treat a portion of the taxable year
39 modifications for that property as occurring in the taxable year
40 the property is placed in service and a portion of the
41 modifications as occurring in the immediately following
42 taxable year.
2025 IN 394—LS 7250/DI 120 43
1 (B) The portion of the modifications under subdivisions (15)
2 and (17) for property placed in service during the taxable year
3 treated as occurring in the taxable year in which the property
4 is placed in service equals:
5 (i) the modification for the property otherwise determined
6 under this section; minus
7 (ii) the excess business loss disallowed under this
8 subdivision;
9 but not less than zero (0).
10 (C) The portion of the modifications under subdivisions (15)
11 and (17) for property placed in service during the taxable year
12 treated as occurring in the taxable year immediately following
13 the taxable year in which the property is placed in service
14 equals the modification for the property otherwise determined
15 under this section minus the amount in clause (B).
16 (D) Any reallocation of modifications between taxable years
17 under clauses (B) and (C) shall be first allocated to the
18 modification under subdivision (15), then to the modification
19 under subdivision (17).
20 (30) Add an amount equal to the amount excluded from federal
21 gross income under Section 108(f)(5) of the Internal Revenue
22 Code. For purposes of this subdivision:
23 (A) if an amount excluded under Section 108(f)(5) of the
24 Internal Revenue Code would be excludible under Section
25 108(a)(1)(B) of the Internal Revenue Code, the exclusion
26 under Section 108(a)(1)(B) of the Internal Revenue Code shall
27 take precedence; and
28 (B) if an amount would have been excludible under Section
29 108(f)(5) of the Internal Revenue Code as in effect on January
30 1, 2020, the amount is not required to be added back under this
31 subdivision.
32 (31) For taxable years ending after March 12, 2020, subtract an
33 amount equal to the deduction disallowed pursuant to:
34 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
35 as modified by Sections 206 and 207 of the Taxpayer Certainty
36 and Disaster Relief Tax Act (Division EE of Public Law
37 116-260); and
38 (B) Section 3134(e) of the Internal Revenue Code.
39 (32) Subtract the amount of an ESA annual grant amount and, as
40 applicable, a CSA annual grant amount distributed to a taxpayer's
41 Indiana education scholarship account under IC 20-51.4 that is
42 used for an ESA or CSA qualified expense (as defined in
2025 IN 394—LS 7250/DI 120 44
1 IC 20-51.4-2) or to an Indiana enrichment scholarship account
2 under IC 20-52 that is used for qualified expenses (as defined in
3 IC 20-52-2-6), to the extent the distribution used for the qualified
4 expense is included in the taxpayer's federal adjusted gross
5 income under the Internal Revenue Code.
6 (33) For taxable years beginning after December 31, 2019, and
7 before January 1, 2021, add an amount equal to the amount of
8 unemployment compensation excluded from federal gross income
9 under Section 85(c) of the Internal Revenue Code.
10 (34) For taxable years beginning after December 31, 2022,
11 subtract an amount equal to the deduction disallowed under
12 Section 280C(h) of the Internal Revenue Code.
13 (35) For taxable years beginning after December 31, 2021, add or
14 subtract amounts related to specified research or experimental
15 procedures as required under IC 6-3-2-29.
16 (36) Subtract any other amounts the taxpayer is entitled to deduct
17 under IC 6-3-2.
18 (37) Subtract the amount of a CSA annual grant amount
19 distributed to a taxpayer's career scholarship account under
20 IC 20-51.4-4.5 that is used for a CSA qualified expense (as
21 defined in IC 20-51.4-2-3.8), to the extent the distribution used
22 for the CSA qualified expense is included in the taxpayer's federal
23 adjusted gross income under the Internal Revenue Code.
24 (b) In the case of corporations, the same as "taxable income" (as
25 defined in Section 63 of the Internal Revenue Code) adjusted as
26 follows:
27 (1) Subtract income that is exempt from taxation under this article
28 by the Constitution and statutes of the United States.
29 (2) Add an amount equal to any deduction or deductions allowed
30 or allowable pursuant to Section 170 of the Internal Revenue
31 Code (concerning charitable contributions).
32 (3) Except as provided in subsection (c), add an amount equal to
33 any deduction or deductions allowed or allowable pursuant to
34 Section 63 of the Internal Revenue Code for taxes based on or
35 measured by income and levied at the state level by any state of
36 the United States.
37 (4) Subtract an amount equal to the amount included in the
38 corporation's taxable income under Section 78 of the Internal
39 Revenue Code (concerning foreign tax credits).
40 (5) Add or subtract the amount necessary to make the adjusted
41 gross income of any taxpayer that owns property for which bonus
42 depreciation was allowed in the current taxable year or in an
2025 IN 394—LS 7250/DI 120 45
1 earlier taxable year equal to the amount of adjusted gross income
2 that would have been computed had an election not been made
3 under Section 168(k) of the Internal Revenue Code to apply bonus
4 depreciation to the property in the year that it was placed in
5 service.
6 (6) Add an amount equal to any deduction allowed under Section
7 172 of the Internal Revenue Code (concerning net operating
8 losses).
9 (7) Add or subtract the amount necessary to make the adjusted
10 gross income of any taxpayer that placed Section 179 property (as
11 defined in Section 179 of the Internal Revenue Code) in service
12 in the current taxable year or in an earlier taxable year equal to
13 the amount of adjusted gross income that would have been
14 computed had an election for federal income tax purposes not
15 been made for the year in which the property was placed in
16 service to take deductions under Section 179 of the Internal
17 Revenue Code in a total amount exceeding the sum of:
18 (A) twenty-five thousand dollars ($25,000) to the extent
19 deductions under Section 179 of the Internal Revenue Code
20 were not elected as provided in clause (B); and
21 (B) for taxable years beginning after December 31, 2017, the
22 deductions elected under Section 179 of the Internal Revenue
23 Code on property acquired in an exchange if:
24 (i) the exchange would have been eligible for
25 nonrecognition of gain or loss under Section 1031 of the
26 Internal Revenue Code in effect on January 1, 2017;
27 (ii) the exchange is not eligible for nonrecognition of gain or
28 loss under Section 1031 of the Internal Revenue Code; and
29 (iii) the taxpayer made an election to take deductions under
30 Section 179 of the Internal Revenue Code with regard to the
31 acquired property in the year that the property was placed
32 into service.
33 The amount of deductions allowable for an item of property
34 under this clause may not exceed the amount of adjusted gross
35 income realized on the property that would have been deferred
36 under the Internal Revenue Code in effect on January 1, 2017.
37 (8) Add to the extent required by IC 6-3-2-20:
38 (A) the amount of intangible expenses (as defined in
39 IC 6-3-2-20) for the taxable year that reduced the corporation's
40 taxable income (as defined in Section 63 of the Internal
41 Revenue Code) for federal income tax purposes; and
42 (B) any directly related interest expenses (as defined in
2025 IN 394—LS 7250/DI 120 46
1 IC 6-3-2-20) that reduced the corporation's adjusted gross
2 income (determined without regard to this subdivision). For
3 purposes of this clause, any directly related interest expense
4 that constitutes business interest within the meaning of Section
5 163(j) of the Internal Revenue Code shall be considered to
6 have reduced the taxpayer's federal taxable income only in the
7 first taxable year in which the deduction otherwise would have
8 been allowable under Section 163 of the Internal Revenue
9 Code if the limitation under Section 163(j)(1) of the Internal
10 Revenue Code did not exist.
11 (9) Add an amount equal to any deduction for dividends paid (as
12 defined in Section 561 of the Internal Revenue Code) to
13 shareholders of a captive real estate investment trust (as defined
14 in section 34.5 of this chapter).
15 (10) Subtract income that is:
16 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
17 derived from patents); and
18 (B) included in the corporation's taxable income under the
19 Internal Revenue Code.
20 (11) Add an amount equal to any income not included in gross
21 income as a result of the deferral of income arising from business
22 indebtedness discharged in connection with the reacquisition after
23 December 31, 2008, and before January 1, 2011, of an applicable
24 debt instrument, as provided in Section 108(i) of the Internal
25 Revenue Code. Subtract from the adjusted gross income of any
26 taxpayer that added an amount to adjusted gross income in a
27 previous year the amount necessary to offset the amount included
28 in federal gross income as a result of the deferral of income
29 arising from business indebtedness discharged in connection with
30 the reacquisition after December 31, 2008, and before January 1,
31 2011, of an applicable debt instrument, as provided in Section
32 108(i) of the Internal Revenue Code.
33 (12) Add the amount excluded from federal gross income under
34 Section 103 of the Internal Revenue Code for interest received on
35 an obligation of a state other than Indiana, or a political
36 subdivision of such a state, that is acquired by the taxpayer after
37 December 31, 2011. For purposes of this subdivision:
38 (A) if the taxpayer receives interest from a pass through entity,
39 a regulated investment company, a hedge fund, or similar
40 arrangement, the taxpayer will be considered to have acquired
41 the obligation on the date the entity acquired the obligation;
42 (B) if ownership of the obligation occurs by means other than
2025 IN 394—LS 7250/DI 120 47
1 a purchase, the date of acquisition of the obligation shall be
2 the date ownership of the obligation was transferred, except to
3 the extent provided in clause (A), and if a portion of the
4 obligation is acquired on multiple dates, the date of acquisition
5 shall be considered separately for each portion of the
6 obligation; and
7 (C) if ownership of the obligation occurred as the result of a
8 refinancing of another obligation, the acquisition date shall be
9 the date on which the obligation was refinanced.
10 (13) For taxable years beginning after December 25, 2016:
11 (A) for a corporation other than a real estate investment trust,
12 add:
13 (i) an amount equal to the amount reported by the taxpayer
14 on IRC 965 Transition Tax Statement, line 1; or
15 (ii) if the taxpayer deducted an amount under Section 965(c)
16 of the Internal Revenue Code in determining the taxpayer's
17 taxable income for purposes of the federal income tax, the
18 amount deducted under Section 965(c) of the Internal
19 Revenue Code; and
20 (B) for a real estate investment trust, add an amount equal to
21 the deduction for deferred foreign income that was claimed by
22 the taxpayer for the taxable year under Section 965(c) of the
23 Internal Revenue Code, but only to the extent that the taxpayer
24 included income pursuant to Section 965 of the Internal
25 Revenue Code in its taxable income for federal income tax
26 purposes or is required to add back dividends paid under
27 subdivision (9).
28 (14) Add an amount equal to the deduction that was claimed by
29 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
30 Internal Revenue Code (attributable to global intangible
31 low-taxed income). The taxpayer shall separately specify the
32 amount of the reduction under Section 250(a)(1)(B)(i) of the
33 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
34 Internal Revenue Code.
35 (15) Subtract any interest expense paid or accrued in the current
36 taxable year but not deducted as a result of the limitation imposed
37 under Section 163(j)(1) of the Internal Revenue Code. Add any
38 interest expense paid or accrued in a previous taxable year but
39 allowed as a deduction under Section 163 of the Internal Revenue
40 Code in the current taxable year. For purposes of this subdivision,
41 an interest expense is considered paid or accrued only in the first
42 taxable year the deduction would have been allowable under
2025 IN 394—LS 7250/DI 120 48
1 Section 163 of the Internal Revenue Code if the limitation under
2 Section 163(j)(1) of the Internal Revenue Code did not exist.
3 (16) Subtract the amount that would have been excluded from
4 gross income but for the enactment of Section 118(b)(2) of the
5 Internal Revenue Code for taxable years ending after December
6 22, 2017.
7 (17) Add an amount equal to the remainder of:
8 (A) the amount allowable as a deduction under Section 274(n)
9 of the Internal Revenue Code; minus
10 (B) the amount otherwise allowable as a deduction under
11 Section 274(n) of the Internal Revenue Code, if Section
12 274(n)(2)(D) of the Internal Revenue Code was not in effect
13 for amounts paid or incurred after December 31, 2020.
14 (18) For taxable years ending after March 12, 2020, subtract an
15 amount equal to the deduction disallowed pursuant to:
16 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
17 as modified by Sections 206 and 207 of the Taxpayer Certainty
18 and Disaster Relief Tax Act (Division EE of Public Law
19 116-260); and
20 (B) Section 3134(e) of the Internal Revenue Code.
21 (19) For taxable years beginning after December 31, 2022,
22 subtract an amount equal to the deduction disallowed under
23 Section 280C(h) of the Internal Revenue Code.
24 (20) For taxable years beginning after December 31, 2021,
25 subtract the amount of any:
26 (A) federal, state, or local grant received by the taxpayer; and
27 (B) discharged federal, state, or local indebtedness incurred by
28 the taxpayer;
29 for purposes of providing or expanding access to broadband
30 service in this state.
31 (21) For taxable years beginning after December 31, 2021, add or
32 subtract amounts related to specified research or experimental
33 procedures as required under IC 6-3-2-29.
34 (22) Add or subtract any other amounts the taxpayer is:
35 (A) required to add or subtract; or
36 (B) entitled to deduct;
37 under IC 6-3-2.
38 (c) The following apply to taxable years beginning after December
39 31, 2018, for purposes of the add back of any deduction allowed on the
40 taxpayer's federal income tax return for wagering taxes, as provided in
41 subsection (a)(2) if the taxpayer is an individual or subsection (b)(3) if
42 the taxpayer is a corporation:
2025 IN 394—LS 7250/DI 120 49
1 (1) For taxable years beginning after December 31, 2018, and
2 before January 1, 2020, a taxpayer is required to add back under
3 this section eighty-seven and five-tenths percent (87.5%) of any
4 deduction allowed on the taxpayer's federal income tax return for
5 wagering taxes.
6 (2) For taxable years beginning after December 31, 2019, and
7 before January 1, 2021, a taxpayer is required to add back under
8 this section seventy-five percent (75%) of any deduction allowed
9 on the taxpayer's federal income tax return for wagering taxes.
10 (3) For taxable years beginning after December 31, 2020, and
11 before January 1, 2022, a taxpayer is required to add back under
12 this section sixty-two and five-tenths percent (62.5%) of any
13 deduction allowed on the taxpayer's federal income tax return for
14 wagering taxes.
15 (4) For taxable years beginning after December 31, 2021, and
16 before January 1, 2023, a taxpayer is required to add back under
17 this section fifty percent (50%) of any deduction allowed on the
18 taxpayer's federal income tax return for wagering taxes.
19 (5) For taxable years beginning after December 31, 2022, and
20 before January 1, 2024, a taxpayer is required to add back under
21 this section thirty-seven and five-tenths percent (37.5%) of any
22 deduction allowed on the taxpayer's federal income tax return for
23 wagering taxes.
24 (6) For taxable years beginning after December 31, 2023, and
25 before January 1, 2025, a taxpayer is required to add back under
26 this section twenty-five percent (25%) of any deduction allowed
27 on the taxpayer's federal income tax return for wagering taxes.
28 (7) For taxable years beginning after December 31, 2024, and
29 before January 1, 2026, a taxpayer is required to add back under
30 this section twelve and five-tenths percent (12.5%) of any
31 deduction allowed on the taxpayer's federal income tax return for
32 wagering taxes.
33 (8) For taxable years beginning after December 31, 2025, a
34 taxpayer is not required to add back under this section any amount
35 of a deduction allowed on the taxpayer's federal income tax return
36 for wagering taxes.
37 (d) In the case of life insurance companies (as defined in Section
38 816(a) of the Internal Revenue Code) that are organized under Indiana
39 law, the same as "life insurance company taxable income" (as defined
40 in Section 801 of the Internal Revenue Code), adjusted as follows:
41 (1) Subtract income that is exempt from taxation under this article
42 by the Constitution and statutes of the United States.
2025 IN 394—LS 7250/DI 120 50
1 (2) Add an amount equal to any deduction allowed or allowable
2 under Section 170 of the Internal Revenue Code (concerning
3 charitable contributions).
4 (3) Add an amount equal to a deduction allowed or allowable
5 under Section 805 or Section 832(c) of the Internal Revenue Code
6 for taxes based on or measured by income and levied at the state
7 level by any state.
8 (4) Subtract an amount equal to the amount included in the
9 company's taxable income under Section 78 of the Internal
10 Revenue Code (concerning foreign tax credits).
11 (5) Add or subtract the amount necessary to make the adjusted
12 gross income of any taxpayer that owns property for which bonus
13 depreciation was allowed in the current taxable year or in an
14 earlier taxable year equal to the amount of adjusted gross income
15 that would have been computed had an election not been made
16 under Section 168(k) of the Internal Revenue Code to apply bonus
17 depreciation to the property in the year that it was placed in
18 service.
19 (6) Add an amount equal to any deduction allowed under Section
20 172 of the Internal Revenue Code (concerning net operating
21 losses).
22 (7) Add or subtract the amount necessary to make the adjusted
23 gross income of any taxpayer that placed Section 179 property (as
24 defined in Section 179 of the Internal Revenue Code) in service
25 in the current taxable year or in an earlier taxable year equal to
26 the amount of adjusted gross income that would have been
27 computed had an election for federal income tax purposes not
28 been made for the year in which the property was placed in
29 service to take deductions under Section 179 of the Internal
30 Revenue Code in a total amount exceeding the sum of:
31 (A) twenty-five thousand dollars ($25,000) to the extent
32 deductions under Section 179 of the Internal Revenue Code
33 were not elected as provided in clause (B); and
34 (B) for taxable years beginning after December 31, 2017, the
35 deductions elected under Section 179 of the Internal Revenue
36 Code on property acquired in an exchange if:
37 (i) the exchange would have been eligible for
38 nonrecognition of gain or loss under Section 1031 of the
39 Internal Revenue Code in effect on January 1, 2017;
40 (ii) the exchange is not eligible for nonrecognition of gain or
41 loss under Section 1031 of the Internal Revenue Code; and
42 (iii) the taxpayer made an election to take deductions under
2025 IN 394—LS 7250/DI 120 51
1 Section 179 of the Internal Revenue Code with regard to the
2 acquired property in the year that the property was placed
3 into service.
4 The amount of deductions allowable for an item of property
5 under this clause may not exceed the amount of adjusted gross
6 income realized on the property that would have been deferred
7 under the Internal Revenue Code in effect on January 1, 2017.
8 (8) Subtract income that is:
9 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
10 derived from patents); and
11 (B) included in the insurance company's taxable income under
12 the Internal Revenue Code.
13 (9) Add an amount equal to any income not included in gross
14 income as a result of the deferral of income arising from business
15 indebtedness discharged in connection with the reacquisition after
16 December 31, 2008, and before January 1, 2011, of an applicable
17 debt instrument, as provided in Section 108(i) of the Internal
18 Revenue Code. Subtract from the adjusted gross income of any
19 taxpayer that added an amount to adjusted gross income in a
20 previous year the amount necessary to offset the amount included
21 in federal gross income as a result of the deferral of income
22 arising from business indebtedness discharged in connection with
23 the reacquisition after December 31, 2008, and before January 1,
24 2011, of an applicable debt instrument, as provided in Section
25 108(i) of the Internal Revenue Code.
26 (10) Add an amount equal to any exempt insurance income under
27 Section 953(e) of the Internal Revenue Code that is active
28 financing income under Subpart F of Subtitle A, Chapter 1,
29 Subchapter N of the Internal Revenue Code.
30 (11) Add the amount excluded from federal gross income under
31 Section 103 of the Internal Revenue Code for interest received on
32 an obligation of a state other than Indiana, or a political
33 subdivision of such a state, that is acquired by the taxpayer after
34 December 31, 2011. For purposes of this subdivision:
35 (A) if the taxpayer receives interest from a pass through entity,
36 a regulated investment company, a hedge fund, or similar
37 arrangement, the taxpayer will be considered to have acquired
38 the obligation on the date the entity acquired the obligation;
39 (B) if ownership of the obligation occurs by means other than
40 a purchase, the date of acquisition of the obligation shall be
41 the date ownership of the obligation was transferred, except to
42 the extent provided in clause (A), and if a portion of the
2025 IN 394—LS 7250/DI 120 52
1 obligation is acquired on multiple dates, the date of acquisition
2 shall be considered separately for each portion of the
3 obligation; and
4 (C) if ownership of the obligation occurred as the result of a
5 refinancing of another obligation, the acquisition date shall be
6 the date on which the obligation was refinanced.
7 (12) For taxable years beginning after December 25, 2016, add:
8 (A) an amount equal to the amount reported by the taxpayer on
9 IRC 965 Transition Tax Statement, line 1; or
10 (B) if the taxpayer deducted an amount under Section 965(c)
11 of the Internal Revenue Code in determining the taxpayer's
12 taxable income for purposes of the federal income tax, the
13 amount deducted under Section 965(c) of the Internal Revenue
14 Code.
15 (13) Add an amount equal to the deduction that was claimed by
16 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
17 Internal Revenue Code (attributable to global intangible
18 low-taxed income). The taxpayer shall separately specify the
19 amount of the reduction under Section 250(a)(1)(B)(i) of the
20 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
21 Internal Revenue Code.
22 (14) Subtract any interest expense paid or accrued in the current
23 taxable year but not deducted as a result of the limitation imposed
24 under Section 163(j)(1) of the Internal Revenue Code. Add any
25 interest expense paid or accrued in a previous taxable year but
26 allowed as a deduction under Section 163 of the Internal Revenue
27 Code in the current taxable year. For purposes of this subdivision,
28 an interest expense is considered paid or accrued only in the first
29 taxable year the deduction would have been allowable under
30 Section 163 of the Internal Revenue Code if the limitation under
31 Section 163(j)(1) of the Internal Revenue Code did not exist.
32 (15) Subtract the amount that would have been excluded from
33 gross income but for the enactment of Section 118(b)(2) of the
34 Internal Revenue Code for taxable years ending after December
35 22, 2017.
36 (16) Add an amount equal to the remainder of:
37 (A) the amount allowable as a deduction under Section 274(n)
38 of the Internal Revenue Code; minus
39 (B) the amount otherwise allowable as a deduction under
40 Section 274(n) of the Internal Revenue Code, if Section
41 274(n)(2)(D) of the Internal Revenue Code was not in effect
42 for amounts paid or incurred after December 31, 2020.
2025 IN 394—LS 7250/DI 120 53
1 (17) For taxable years ending after March 12, 2020, subtract an
2 amount equal to the deduction disallowed pursuant to:
3 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
4 as modified by Sections 206 and 207 of the Taxpayer Certainty
5 and Disaster Relief Tax Act (Division EE of Public Law
6 116-260); and
7 (B) Section 3134(e) of the Internal Revenue Code.
8 (18) For taxable years beginning after December 31, 2022,
9 subtract an amount equal to the deduction disallowed under
10 Section 280C(h) of the Internal Revenue Code.
11 (19) For taxable years beginning after December 31, 2021, add or
12 subtract amounts related to specified research or experimental
13 procedures as required under IC 6-3-2-29.
14 (20) Add or subtract any other amounts the taxpayer is:
15 (A) required to add or subtract; or
16 (B) entitled to deduct;
17 under IC 6-3-2.
18 (e) In the case of insurance companies subject to tax under Section
19 831 of the Internal Revenue Code and organized under Indiana law, the
20 same as "taxable income" (as defined in Section 832 of the Internal
21 Revenue Code), adjusted as follows:
22 (1) Subtract income that is exempt from taxation under this article
23 by the Constitution and statutes of the United States.
24 (2) Add an amount equal to any deduction allowed or allowable
25 under Section 170 of the Internal Revenue Code (concerning
26 charitable contributions).
27 (3) Add an amount equal to a deduction allowed or allowable
28 under Section 805 or Section 832(c) of the Internal Revenue Code
29 for taxes based on or measured by income and levied at the state
30 level by any state.
31 (4) Subtract an amount equal to the amount included in the
32 company's taxable income under Section 78 of the Internal
33 Revenue Code (concerning foreign tax credits).
34 (5) Add or subtract the amount necessary to make the adjusted
35 gross income of any taxpayer that owns property for which bonus
36 depreciation was allowed in the current taxable year or in an
37 earlier taxable year equal to the amount of adjusted gross income
38 that would have been computed had an election not been made
39 under Section 168(k) of the Internal Revenue Code to apply bonus
40 depreciation to the property in the year that it was placed in
41 service.
42 (6) Add an amount equal to any deduction allowed under Section
2025 IN 394—LS 7250/DI 120 54
1 172 of the Internal Revenue Code (concerning net operating
2 losses).
3 (7) Add or subtract the amount necessary to make the adjusted
4 gross income of any taxpayer that placed Section 179 property (as
5 defined in Section 179 of the Internal Revenue Code) in service
6 in the current taxable year or in an earlier taxable year equal to
7 the amount of adjusted gross income that would have been
8 computed had an election for federal income tax purposes not
9 been made for the year in which the property was placed in
10 service to take deductions under Section 179 of the Internal
11 Revenue Code in a total amount exceeding the sum of:
12 (A) twenty-five thousand dollars ($25,000) to the extent
13 deductions under Section 179 of the Internal Revenue Code
14 were not elected as provided in clause (B); and
15 (B) for taxable years beginning after December 31, 2017, the
16 deductions elected under Section 179 of the Internal Revenue
17 Code on property acquired in an exchange if:
18 (i) the exchange would have been eligible for
19 nonrecognition of gain or loss under Section 1031 of the
20 Internal Revenue Code in effect on January 1, 2017;
21 (ii) the exchange is not eligible for nonrecognition of gain or
22 loss under Section 1031 of the Internal Revenue Code; and
23 (iii) the taxpayer made an election to take deductions under
24 Section 179 of the Internal Revenue Code with regard to the
25 acquired property in the year that the property was placed
26 into service.
27 The amount of deductions allowable for an item of property
28 under this clause may not exceed the amount of adjusted gross
29 income realized on the property that would have been deferred
30 under the Internal Revenue Code in effect on January 1, 2017.
31 (8) Subtract income that is:
32 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
33 derived from patents); and
34 (B) included in the insurance company's taxable income under
35 the Internal Revenue Code.
36 (9) Add an amount equal to any income not included in gross
37 income as a result of the deferral of income arising from business
38 indebtedness discharged in connection with the reacquisition after
39 December 31, 2008, and before January 1, 2011, of an applicable
40 debt instrument, as provided in Section 108(i) of the Internal
41 Revenue Code. Subtract from the adjusted gross income of any
42 taxpayer that added an amount to adjusted gross income in a
2025 IN 394—LS 7250/DI 120 55
1 previous year the amount necessary to offset the amount included
2 in federal gross income as a result of the deferral of income
3 arising from business indebtedness discharged in connection with
4 the reacquisition after December 31, 2008, and before January 1,
5 2011, of an applicable debt instrument, as provided in Section
6 108(i) of the Internal Revenue Code.
7 (10) Add an amount equal to any exempt insurance income under
8 Section 953(e) of the Internal Revenue Code that is active
9 financing income under Subpart F of Subtitle A, Chapter 1,
10 Subchapter N of the Internal Revenue Code.
11 (11) Add the amount excluded from federal gross income under
12 Section 103 of the Internal Revenue Code for interest received on
13 an obligation of a state other than Indiana, or a political
14 subdivision of such a state, that is acquired by the taxpayer after
15 December 31, 2011. For purposes of this subdivision:
16 (A) if the taxpayer receives interest from a pass through entity,
17 a regulated investment company, a hedge fund, or similar
18 arrangement, the taxpayer will be considered to have acquired
19 the obligation on the date the entity acquired the obligation;
20 (B) if ownership of the obligation occurs by means other than
21 a purchase, the date of acquisition of the obligation shall be
22 the date ownership of the obligation was transferred, except to
23 the extent provided in clause (A), and if a portion of the
24 obligation is acquired on multiple dates, the date of acquisition
25 shall be considered separately for each portion of the
26 obligation; and
27 (C) if ownership of the obligation occurred as the result of a
28 refinancing of another obligation, the acquisition date shall be
29 the date on which the obligation was refinanced.
30 (12) For taxable years beginning after December 25, 2016, add:
31 (A) an amount equal to the amount reported by the taxpayer on
32 IRC 965 Transition Tax Statement, line 1; or
33 (B) if the taxpayer deducted an amount under Section 965(c)
34 of the Internal Revenue Code in determining the taxpayer's
35 taxable income for purposes of the federal income tax, the
36 amount deducted under Section 965(c) of the Internal Revenue
37 Code.
38 (13) Add an amount equal to the deduction that was claimed by
39 the taxpayer for the taxable year under Section 250(a)(1)(B) of the
40 Internal Revenue Code (attributable to global intangible
41 low-taxed income). The taxpayer shall separately specify the
42 amount of the reduction under Section 250(a)(1)(B)(i) of the
2025 IN 394—LS 7250/DI 120 56
1 Internal Revenue Code and under Section 250(a)(1)(B)(ii) of the
2 Internal Revenue Code.
3 (14) Subtract any interest expense paid or accrued in the current
4 taxable year but not deducted as a result of the limitation imposed
5 under Section 163(j)(1) of the Internal Revenue Code. Add any
6 interest expense paid or accrued in a previous taxable year but
7 allowed as a deduction under Section 163 of the Internal Revenue
8 Code in the current taxable year. For purposes of this subdivision,
9 an interest expense is considered paid or accrued only in the first
10 taxable year the deduction would have been allowable under
11 Section 163 of the Internal Revenue Code if the limitation under
12 Section 163(j)(1) of the Internal Revenue Code did not exist.
13 (15) Subtract the amount that would have been excluded from
14 gross income but for the enactment of Section 118(b)(2) of the
15 Internal Revenue Code for taxable years ending after December
16 22, 2017.
17 (16) Add an amount equal to the remainder of:
18 (A) the amount allowable as a deduction under Section 274(n)
19 of the Internal Revenue Code; minus
20 (B) the amount otherwise allowable as a deduction under
21 Section 274(n) of the Internal Revenue Code, if Section
22 274(n)(2)(D) of the Internal Revenue Code was not in effect
23 for amounts paid or incurred after December 31, 2020.
24 (17) For taxable years ending after March 12, 2020, subtract an
25 amount equal to the deduction disallowed pursuant to:
26 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
27 as modified by Sections 206 and 207 of the Taxpayer Certainty
28 and Disaster Relief Tax Act (Division EE of Public Law
29 116-260); and
30 (B) Section 3134(e) of the Internal Revenue Code.
31 (18) For taxable years beginning after December 31, 2022,
32 subtract an amount equal to the deduction disallowed under
33 Section 280C(h) of the Internal Revenue Code.
34 (19) For taxable years beginning after December 31, 2021, add or
35 subtract amounts related to specified research or experimental
36 procedures as required under IC 6-3-2-29.
37 (20) Add or subtract any other amounts the taxpayer is:
38 (A) required to add or subtract; or
39 (B) entitled to deduct;
40 under IC 6-3-2.
41 (f) In the case of trusts and estates, "taxable income" (as defined for
42 trusts and estates in Section 641(b) of the Internal Revenue Code)
2025 IN 394—LS 7250/DI 120 57
1 adjusted as follows:
2 (1) Subtract income that is exempt from taxation under this article
3 by the Constitution and statutes of the United States.
4 (2) Subtract an amount equal to the amount of a September 11
5 terrorist attack settlement payment included in the federal
6 adjusted gross income of the estate of a victim of the September
7 11 terrorist attack or a trust to the extent the trust benefits a victim
8 of the September 11 terrorist attack.
9 (3) Add or subtract the amount necessary to make the adjusted
10 gross income of any taxpayer that owns property for which bonus
11 depreciation was allowed in the current taxable year or in an
12 earlier taxable year equal to the amount of adjusted gross income
13 that would have been computed had an election not been made
14 under Section 168(k) of the Internal Revenue Code to apply bonus
15 depreciation to the property in the year that it was placed in
16 service.
17 (4) Add an amount equal to any deduction allowed under Section
18 172 of the Internal Revenue Code (concerning net operating
19 losses).
20 (5) Add or subtract the amount necessary to make the adjusted
21 gross income of any taxpayer that placed Section 179 property (as
22 defined in Section 179 of the Internal Revenue Code) in service
23 in the current taxable year or in an earlier taxable year equal to
24 the amount of adjusted gross income that would have been
25 computed had an election for federal income tax purposes not
26 been made for the year in which the property was placed in
27 service to take deductions under Section 179 of the Internal
28 Revenue Code in a total amount exceeding the sum of:
29 (A) twenty-five thousand dollars ($25,000) to the extent
30 deductions under Section 179 of the Internal Revenue Code
31 were not elected as provided in clause (B); and
32 (B) for taxable years beginning after December 31, 2017, the
33 deductions elected under Section 179 of the Internal Revenue
34 Code on property acquired in an exchange if:
35 (i) the exchange would have been eligible for
36 nonrecognition of gain or loss under Section 1031 of the
37 Internal Revenue Code in effect on January 1, 2017;
38 (ii) the exchange is not eligible for nonrecognition of gain or
39 loss under Section 1031 of the Internal Revenue Code; and
40 (iii) the taxpayer made an election to take deductions under
41 Section 179 of the Internal Revenue Code with regard to the
42 acquired property in the year that the property was placed
2025 IN 394—LS 7250/DI 120 58
1 into service.
2 The amount of deductions allowable for an item of property
3 under this clause may not exceed the amount of adjusted gross
4 income realized on the property that would have been deferred
5 under the Internal Revenue Code in effect on January 1, 2017.
6 (6) Subtract income that is:
7 (A) exempt from taxation under IC 6-3-2-21.7 (certain income
8 derived from patents); and
9 (B) included in the taxpayer's taxable income under the
10 Internal Revenue Code.
11 (7) Add an amount equal to any income not included in gross
12 income as a result of the deferral of income arising from business
13 indebtedness discharged in connection with the reacquisition after
14 December 31, 2008, and before January 1, 2011, of an applicable
15 debt instrument, as provided in Section 108(i) of the Internal
16 Revenue Code. Subtract from the adjusted gross income of any
17 taxpayer that added an amount to adjusted gross income in a
18 previous year the amount necessary to offset the amount included
19 in federal gross income as a result of the deferral of income
20 arising from business indebtedness discharged in connection with
21 the reacquisition after December 31, 2008, and before January 1,
22 2011, of an applicable debt instrument, as provided in Section
23 108(i) of the Internal Revenue Code.
24 (8) Add the amount excluded from federal gross income under
25 Section 103 of the Internal Revenue Code for interest received on
26 an obligation of a state other than Indiana, or a political
27 subdivision of such a state, that is acquired by the taxpayer after
28 December 31, 2011. For purposes of this subdivision:
29 (A) if the taxpayer receives interest from a pass through entity,
30 a regulated investment company, a hedge fund, or similar
31 arrangement, the taxpayer will be considered to have acquired
32 the obligation on the date the entity acquired the obligation;
33 (B) if ownership of the obligation occurs by means other than
34 a purchase, the date of acquisition of the obligation shall be
35 the date ownership of the obligation was transferred, except to
36 the extent provided in clause (A), and if a portion of the
37 obligation is acquired on multiple dates, the date of acquisition
38 shall be considered separately for each portion of the
39 obligation; and
40 (C) if ownership of the obligation occurred as the result of a
41 refinancing of another obligation, the acquisition date shall be
42 the date on which the obligation was refinanced.
2025 IN 394—LS 7250/DI 120 59
1 (9) For taxable years beginning after December 25, 2016, add an
2 amount equal to:
3 (A) the amount reported by the taxpayer on IRC 965
4 Transition Tax Statement, line 1;
5 (B) if the taxpayer deducted an amount under Section 965(c)
6 of the Internal Revenue Code in determining the taxpayer's
7 taxable income for purposes of the federal income tax, the
8 amount deducted under Section 965(c) of the Internal Revenue
9 Code; and
10 (C) with regard to any amounts of income under Section 965
11 of the Internal Revenue Code distributed by the taxpayer, the
12 deduction under Section 965(c) of the Internal Revenue Code
13 attributable to such distributed amounts and not reported to the
14 beneficiary.
15 For purposes of this article, the amount required to be added back
16 under clause (B) is not considered to be distributed or
17 distributable to a beneficiary of the estate or trust for purposes of
18 Sections 651 and 661 of the Internal Revenue Code.
19 (10) Subtract any interest expense paid or accrued in the current
20 taxable year but not deducted as a result of the limitation imposed
21 under Section 163(j)(1) of the Internal Revenue Code. Add any
22 interest expense paid or accrued in a previous taxable year but
23 allowed as a deduction under Section 163 of the Internal Revenue
24 Code in the current taxable year. For purposes of this subdivision,
25 an interest expense is considered paid or accrued only in the first
26 taxable year the deduction would have been allowable under
27 Section 163 of the Internal Revenue Code if the limitation under
28 Section 163(j)(1) of the Internal Revenue Code did not exist.
29 (11) Add an amount equal to the deduction for qualified business
30 income that was claimed by the taxpayer for the taxable year
31 under Section 199A of the Internal Revenue Code.
32 (12) Subtract the amount that would have been excluded from
33 gross income but for the enactment of Section 118(b)(2) of the
34 Internal Revenue Code for taxable years ending after December
35 22, 2017.
36 (13) Add an amount equal to the remainder of:
37 (A) the amount allowable as a deduction under Section 274(n)
38 of the Internal Revenue Code; minus
39 (B) the amount otherwise allowable as a deduction under
40 Section 274(n) of the Internal Revenue Code, if Section
41 274(n)(2)(D) of the Internal Revenue Code was not in effect
42 for amounts paid or incurred after December 31, 2020.
2025 IN 394—LS 7250/DI 120 60
1 (14) For taxable years beginning after December 31, 2017, and
2 before January 1, 2021, add an amount equal to the excess
3 business loss of the taxpayer as defined in Section 461(l)(3) of the
4 Internal Revenue Code. In addition:
5 (A) If a taxpayer has an excess business loss under this
6 subdivision and also has modifications under subdivisions (3)
7 and (5) for property placed in service during the taxable year,
8 the taxpayer shall treat a portion of the taxable year
9 modifications for that property as occurring in the taxable year
10 the property is placed in service and a portion of the
11 modifications as occurring in the immediately following
12 taxable year.
13 (B) The portion of the modifications under subdivisions (3)
14 and (5) for property placed in service during the taxable year
15 treated as occurring in the taxable year in which the property
16 is placed in service equals:
17 (i) the modification for the property otherwise determined
18 under this section; minus
19 (ii) the excess business loss disallowed under this
20 subdivision;
21 but not less than zero (0).
22 (C) The portion of the modifications under subdivisions (3)
23 and (5) for property placed in service during the taxable year
24 treated as occurring in the taxable year immediately following
25 the taxable year in which the property is placed in service
26 equals the modification for the property otherwise determined
27 under this section minus the amount in clause (B).
28 (D) Any reallocation of modifications between taxable years
29 under clauses (B) and (C) shall be first allocated to the
30 modification under subdivision (3), then to the modification
31 under subdivision (5).
32 (15) For taxable years ending after March 12, 2020, subtract an
33 amount equal to the deduction disallowed pursuant to:
34 (A) Section 2301(e) of the CARES Act (Public Law 116-136),
35 as modified by Sections 206 and 207 of the Taxpayer Certainty
36 and Disaster Relief Tax Act (Division EE of Public Law
37 116-260); and
38 (B) Section 3134(e) of the Internal Revenue Code.
39 (16) For taxable years beginning after December 31, 2022,
40 subtract an amount equal to the deduction disallowed under
41 Section 280C(h) of the Internal Revenue Code.
42 (17) Except as provided in subsection (c), for taxable years
2025 IN 394—LS 7250/DI 120 61
1 beginning after December 31, 2022, add an amount equal to any
2 deduction or deductions allowed or allowable in determining
3 taxable income under Section 641(b) of the Internal Revenue
4 Code for taxes based on or measured by income and levied at the
5 state level by any state of the United States.
6 (18) For taxable years beginning after December 31, 2021, add or
7 subtract amounts related to specified research or experimental
8 procedures as required under IC 6-3-2-29.
9 (19) Add or subtract any other amounts the taxpayer is:
10 (A) required to add or subtract; or
11 (B) entitled to deduct;
12 under IC 6-3-2.
13 (g) For purposes of IC 6-3-2.1, IC 6-3-4-12, IC 6-3-4-13, and
14 IC 6-3-4-15 for taxable years beginning after December 31, 2022,
15 "adjusted gross income" of a pass through entity means the items of
16 ordinary income and loss in the case of a partnership or a corporation
17 described in IC 6-3-2-2.8(2), or distributions subject to tax for state and
18 federal income tax for beneficiaries in the case of a trust or estate,
19 whichever is applicable, for the taxable year modified as follows:
20 (1) Add the separately stated items of income and gains, or the
21 equivalent items that must be considered separately by a
22 beneficiary, as determined for federal purposes, attributed to the
23 partners, shareholders, or beneficiaries of the pass through entity,
24 determined without regard to whether the owner is permitted to
25 exclude all or part of the income or gain or deduct any amount
26 against the income or gain.
27 (2) Subtract the separately stated items of deductions or losses or
28 items that must be considered separately by beneficiaries, as
29 determined for federal purposes, attributed to partners,
30 shareholders, or beneficiaries of the pass through entity and that
31 are deductible by an individual in determining adjusted gross
32 income as defined under Section 62 of the Internal Revenue
33 Code:
34 (A) limited as if the partners, shareholders, and beneficiaries
35 deducted the maximum allowable loss or deduction allowable
36 for the taxable year prior to any amount deductible from the
37 pass through entity; but
38 (B) not considering any disallowance of deductions resulting
39 from federal basis limitations for the partner, shareholder, or
40 beneficiary.
41 (3) Add or subtract any modifications to adjusted gross income
42 that would be required both for individuals under subsection (a)
2025 IN 394—LS 7250/DI 120 62
1 and corporations under subsection (b) to the extent otherwise
2 provided in those subsections, including amounts that are
3 allowable for which such modifications are necessary to account
4 for separately stated items in subdivision (1) or (2).
5 (h) Subsections (a)(36), (b)(22), (d)(20), (e)(20), or (f)(19) may not
6 be construed to require an add back or allow a deduction or exemption
7 more than once for a particular add back, deduction, or exemption.
8 (i) For taxable years beginning after December 25, 2016, if:
9 (1) a taxpayer is a shareholder, either directly or indirectly, in a
10 corporation that is an E&P deficit foreign corporation as defined
11 in Section 965(b)(3)(B) of the Internal Revenue Code, and the
12 earnings and profit deficit, or a portion of the earnings and profit
13 deficit, of the E&P deficit foreign corporation is permitted to
14 reduce the federal adjusted gross income or federal taxable
15 income of the taxpayer, the deficit, or the portion of the deficit,
16 shall also reduce the amount taxable under this section to the
17 extent permitted under the Internal Revenue Code, however, in no
18 case shall this permit a reduction in the amount taxable under
19 Section 965 of the Internal Revenue Code for purposes of this
20 section to be less than zero (0); and
21 (2) the Internal Revenue Service issues guidance that such an
22 income or deduction is not reported directly on a federal tax
23 return or is to be reported in a manner different than specified in
24 this section, this section shall be construed as if federal adjusted
25 gross income or federal taxable income included the income or
26 deduction.
27 (j) If a partner is required to include an item of income, a deduction,
28 or another tax attribute in the partner's adjusted gross income tax return
29 pursuant to IC 6-3-4.5, such item shall be considered to be includible
30 in the partner's federal adjusted gross income or federal taxable
31 income, regardless of whether such item is actually required to be
32 reported by the partner for federal income tax purposes. For purposes
33 of this subsection:
34 (1) items for which a valid election is made under IC 6-3-4.5-6,
35 IC 6-3-4.5-8, or IC 6-3-4.5-9 shall not be required to be included
36 in the partner's adjusted gross income or taxable income; and
37 (2) items for which the partnership did not make an election under
38 IC 6-3-4.5-6, IC 6-3-4.5-8, or IC 6-3-4.5-9, but for which the
39 partnership is required to remit tax pursuant to IC 6-3-4.5-18,
40 shall be included in the partner's adjusted gross income or taxable
41 income.
42 (k) The following apply for purposes of this section:
2025 IN 394—LS 7250/DI 120 63
1 (1) For purposes of subsections (b) and (f), if a taxpayer is an
2 organization that has more than one (1) trade or business subject
3 to the provisions of Section 512(a)(6) of the Internal Revenue
4 Code, the following rules apply for taxable years beginning after
5 December 31, 2017:
6 (A) If a trade or business has federal unrelated business
7 taxable income of zero (0) or greater for a taxable year, the
8 unrelated business taxable income and modifications required
9 under this section shall be combined in determining the
10 adjusted gross income of the taxpayer and shall not be treated
11 as being subject to the provisions of Section 512(a)(6) of the
12 Internal Revenue Code if one (1) or more trades or businesses
13 have negative Indiana adjusted gross income after
14 adjustments.
15 (B) If a trade or business has federal unrelated business
16 taxable income of less than zero (0) for a taxable year, the
17 taxpayer shall apply the modifications under this section for
18 the taxable year against the net operating loss in the manner
19 required under IC 6-3-2-2.5 and IC 6-3-2-2.6 for separately
20 stated net operating losses. However, if the application of
21 modifications required under IC 6-3-2-2.5 or IC 6-3-2-2.6
22 results in the separately stated net operating loss for the trade
23 or business being zero (0), the modifications that increase
24 adjusted gross income under this section and remain after the
25 calculations to adjust the separately stated net operating loss
26 to zero (0) that result from the trade or business must be
27 treated as modifications to which clause (A) applies for the
28 taxable year.
29 (C) If a trade or business otherwise described in Section
30 512(a)(6) of the Internal Revenue Code incurred a net
31 operating loss for a taxable year beginning after December 31,
32 2017, and before January 1, 2021, and the net operating loss
33 was carried back for federal tax purposes:
34 (i) if the loss was carried back to a taxable year for which
35 the requirements under Section 512(a)(6) of the Internal
36 Revenue Code did not apply, the portion of the loss and
37 modifications attributable to the loss shall be treated as
38 adjusted gross income of the taxpayer for the first taxable
39 year of the taxpayer beginning after December 31, 2022, and
40 shall be treated as part of the adjusted gross income
41 attributable to clause (A), unless, and to the extent, the loss
42 and modifications were applied to adjusted gross income for
2025 IN 394—LS 7250/DI 120 64
1 a previous taxable year, as determined under this article; and
2 (ii) if the loss was carried back to a taxable year for which
3 the requirements under Section 512(a)(6) of the Internal
4 Revenue Code applied, the portion of the loss and
5 modifications attributable to the loss shall be treated as
6 adjusted gross income of the taxpayer for the first taxable
7 year of the taxpayer beginning after December 31, 2022, and
8 for purposes of this clause, the inclusion of losses and
9 modifications shall be in the same manner as provided in
10 clause (B), unless, and to the extent, the loss and
11 modifications were applied to adjusted gross income for a
12 previous taxable year, as determined under this article.
13 (D) Notwithstanding any provision in this subdivision, if a
14 taxpayer computed its adjusted gross income for a taxable year
15 beginning before January 1, 2023, based on a reasonable
16 interpretation of this article, the taxpayer shall be permitted to
17 compute its adjusted gross income for those taxable years
18 based on that interpretation. However, a taxpayer must
19 continue to report any tax attributes for taxable years
20 beginning after December 31, 2022, in a manner consistent
21 with its previous interpretation.
22 (2) In the case of a corporation, other than a captive real estate
23 investment trust, for which the adjusted gross income under this
24 article is determined after a deduction for dividends paid under
25 the Internal Revenue Code, the modifications required under this
26 section shall be applied in ratio to the corporation's taxable
27 income (as defined in Section 63 of the Internal Revenue Code)
28 after deductions for dividends paid under the Internal Revenue
29 Code compared to the corporation's taxable income (as defined in
30 Section 63 of the Internal Revenue Code) before the deduction for
31 dividends paid under the Internal Revenue Code.
32 (3) In the case of a trust or estate, the trust or estate is required to
33 include only the portion of the modifications not passed through
34 to beneficiaries.
35 (4) In the case of a taxpayer for which modifications are required
36 to be applied against a separately stated net operating loss under
37 IC 6-3-2-2.5 or IC 6-3-2-2.6, the modifications required under this
38 section must be adjusted to reflect the required application of the
39 modifications against a separately stated net operating loss, in
40 order to avoid the application of a particular modification
41 multiple times.
42 SECTION 31. IC 6-3-2-5.4 IS ADDED TO THE INDIANA CODE
2025 IN 394—LS 7250/DI 120 65
1 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
2 JANUARY 1, 2026]: Sec. 5.4. (a) This section applies to taxable
3 years beginning after December 31, 2025.
4 (b) As used in this section, "homestead" has the meaning set
5 forth in IC 6-1.1-12-37.
6 (c) As used in this section, "solar energy panels" means panels
7 that are part of a solar energy heating or cooling system designed
8 for installation on residential property.
9 (d) A resident individual taxpayer is entitled to a deduction
10 from the taxpayer's adjusted gross income for a particular taxable
11 year if, during that taxable year, the taxpayer installs solar energy
12 panels on the taxpayer's homestead.
13 (e) The amount of the deduction to which a taxpayer is entitled
14 in a particular taxable year is equal to the amount the taxpayer
15 pays for labor and materials for the installation of the solar energy
16 panels installed during the taxable year.
17 (f) To obtain the deduction provided by this section, a taxpayer
18 must file with the department proof of the taxpayer's costs for the
19 installation of the solar energy panels and a list of the persons or
20 corporation that supplied labor or materials for the installation of
21 the solar energy panels.
22 SECTION 32. IC 6-3-2-5.7 IS ADDED TO THE INDIANA CODE
23 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
24 JANUARY 1, 2026]: Sec. 5.7. (a) As used in this section, "eligible
25 taxpayer" means an individual who:
26 (1) is employed in Indiana for more than one hundred eighty
27 (180) days in the taxable year as:
28 (A) an educator in an elementary or secondary school;
29 (B) police officer; or
30 (C) firefighter; or
31 (2) is a veteran who served in the military or naval forces of
32 the United States and received an honorable discharge.
33 (b) An eligible taxpayer may deduct from the eligible taxpayer's
34 adjusted gross income five thousand dollars ($5,000) for a taxable
35 year. In the case of a joint return filed by a husband and wife, if
36 both spouses are eligible taxpayers, each spouse may deduct five
37 thousand dollars ($5,000) for the taxable year.
38 SECTION 33. IC 6-3-2-6 IS REPEALED [EFFECTIVE
39 DECEMBER 31, 2025]. Sec. 6. (a) Each taxable year, an individual
40 who rents a dwelling for use as the individual's principal place of
41 residence may deduct from the individual's adjusted gross income (as
42 defined in IC 6-3-1-3.5(a)), the lesser of:
2025 IN 394—LS 7250/DI 120 66
1 (1) the amount of rent paid by the individual with respect to the
2 dwelling during the taxable year; or
3 (2) three thousand dollars ($3,000).
4 (b) Notwithstanding subsection (a):
5 (1) a married couple filing a joint return for a particular taxable
6 year may not claim a deduction under this section of more than
7 three thousand dollars ($3,000); and
8 (2) a married individual filing a separate return for a particular
9 taxable year may not claim a deduction under this section of more
10 than one thousand five hundred dollars ($1,500).
11 (c) The deduction provided by this section does not apply to an
12 individual who rents a dwelling that is exempt from Indiana property
13 tax.
14 (d) For purposes of this section, a "dwelling" includes a single
15 family dwelling and unit of a multi-family dwelling.
16 SECTION 34. IC 6-3-2-31 IS ADDED TO THE INDIANA CODE
17 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE
18 JANUARY 1, 2026]: Sec. 31. (a) As used in this section, "retirement
19 income" means retirement benefits, annuities, or distributions that
20 are made from or pursuant to a pension or retirement plan that
21 are received by the individual on account of retirement. However,
22 the term does not include federal Social Security and Railroad
23 Retirement benefits, qualified military income, and income from
24 a federal civil service annuity.
25 (b) Each taxable year, an individual who is at least sixty-two
26 (62) years of age is entitled to an adjusted gross income tax
27 deduction for the first sixteen thousand dollars ($16,000) of
28 retirement income received by the individual in a taxable year.
29 SECTION 35. IC 6-3-3-14.5, AS ADDED BY P.L.213-2015,
30 SECTION 82, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
31 JANUARY 1, 2026]: Sec. 14.5. (a) As used in this section, "classroom
32 supplies" means any items that qualify for the educator expense
33 deduction under Section 62(a)(2)(D) of the Internal Revenue Code. (as
34 effective December 31, 2013).
35 (b) Each taxable year, an individual employed as a teacher (as
36 defined in IC 20-18-2-22(a)) is entitled to a credit against the
37 individual's adjusted gross income tax liability for amounts expended
38 during the taxable year for classroom supplies. The amount of the
39 credit is the lesser of:
40 (1) one hundred thousand dollars ($100); ($1,000); or
41 (2) the total amount expended for classroom supplies during a
42 taxable year.
2025 IN 394—LS 7250/DI 120 67
1 (c) The credit provided by this section may not exceed the amount
2 of the individual's adjusted gross income tax liability for the taxable
3 year, reduced by the sum of all credits for the taxable year that are
4 applied before the application of the credit provided by this section.
5 The amount of any unused credit under this section for a taxable year
6 may not be carried forward to a succeeding taxable year, carried back
7 to a preceding taxable year, or refunded.
8 SECTION 36. IC 6-3.1-43 IS ADDED TO THE INDIANA CODE
9 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
10 JANUARY 1, 2026]:
11 Chapter 43. Income Tax Credit for Renters
12 Sec. 1. As used in this chapter, "disabled veteran" means an
13 individual who:
14 (1) served in the military or naval forces of the United States;
15 (2) received an honorable discharge; and
16 (3) has a total service connected disability of ten percent
17 (10%) or more.
18 Sec. 2. As used in this chapter, a "dwelling" includes a single
19 family dwelling and unit of a multi-family dwelling.
20 Sec. 3. As used in this chapter, "state income tax liability"
21 means an individual's adjusted gross income tax liability under
22 IC 6-3.
23 Sec. 4. (a) Beginning after December 31, 2025, an individual who
24 rents a dwelling for use as the individual's principal place of
25 residence is entitled to a credit against the individual's state income
26 tax liability.
27 (b) The amount of the credit is equal to the lesser of:
28 (1) except as provided in subdivision (2):
29 (A) the amount of rent paid by the individual with respect
30 to the dwelling during the taxable year; or
31 (B) six thousand dollars ($6,000); or
32 (2) in the case of a disabled veteran:
33 (A) the amount of rent paid by the individual with respect
34 to the dwelling during the taxable year; or
35 (B) seven thousand five hundred dollars ($7,500).
36 (c) Notwithstanding subsection (b):
37 (1) a married couple filing a joint return for a particular
38 taxable year may not claim a credit under this chapter of
39 more than six thousand dollars ($6,000), or seven thousand
40 five hundred dollars ($7,500) in the case of a disabled veteran;
41 and
42 (2) a married individual filing a separate return for a
2025 IN 394—LS 7250/DI 120 68
1 particular taxable year may not claim a credit under this
2 chapter of more than three thousand dollars ($3,000) or three
3 thousand seven hundred fifty dollars ($3,750) in the case of a
4 disabled veteran.
5 Sec. 5. The credit provided by this chapter does not apply to an
6 individual who rents a dwelling that is exempt from Indiana
7 property tax.
8 Sec. 6. An individual claiming a credit under this section shall
9 submit to the department all information that the department
10 determines is necessary for the determination of the credit
11 provided by this chapter.
12 Sec. 7. If the credit provided by this chapter exceeds the amount
13 of the taxpayer's adjusted gross income tax liability for the taxable
14 year, reduced by the sum of all credits for the taxable year that are
15 applied before the application of the credit provided by this
16 chapter, the excess shall be refunded to the taxpayer.
17 SECTION 37. IC 6-3.1-44 IS ADDED TO THE INDIANA CODE
18 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
19 JANUARY 1, 2026]:
20 Chapter 44. Income Tax Mortgage Credit for First Time Home
21 Buyers
22 Sec. 1. As used in this chapter, "eligible home buyer" means an
23 individual:
24 (1) who is a mortgagor of a first time home buyer mortgage
25 for a homestead;
26 (2) uses the homestead for which the individual has a first
27 time home buyer mortgage as the individual's principal place
28 of residence; and
29 (3) who had adjusted gross income (as defined in Section 62 of
30 the Internal Revenue Code) for the preceding taxable year not
31 exceeding:
32 (A) two hundred thousand dollars ($200,000), in the case
33 of an individual who filed a single return; or
34 (B) four hundred thousand dollars ($400,000) combined
35 adjusted gross income, in the case of an individual who
36 filed a joint income tax return with the individual's spouse.
37 Sec. 2. As used in this chapter, "first time home buyer
38 mortgage" means a mortgage of an individual purchasing a
39 residence in Indiana who is a first time home buyer or has not
40 owned a home in the last three (3) years.
41 Sec. 3. As used in this chapter, "homestead" has the meaning set
42 forth in IC 6-1.1-12-37.
2025 IN 394—LS 7250/DI 120 69
1 Sec. 4. As used in this chapter, "state income tax liability"
2 means an individual's adjusted gross income tax liability under
3 IC 6-3.
4 Sec. 5. (a) An eligible home buyer with a first time home buyer
5 mortgage is entitled to a credit against the individual's state income
6 tax liability.
7 (b) The amount of the credit is equal to fifteen thousand dollars
8 ($15,000) for the taxable year.
9 (c) An eligible home buyer is entitled to claim the credit amount
10 under subsection (b) for the first taxable year in which the home
11 buyer first enters into a first time home buyer mortgage and for
12 the next four (4) consecutive taxable years following that year.
13 Sec. 6. An individual claiming a credit under this section shall
14 submit to the department all information that the department
15 determines is necessary for the determination of the credit
16 provided by this chapter.
17 Sec. 7. If the credit provided by this chapter exceeds the amount
18 of the taxpayer's adjusted gross income tax liability for the taxable
19 year, reduced by the sum of all credits for the taxable year that are
20 applied before the application of the credit provided by this
21 chapter, the excess shall be refunded to the taxpayer.
22 SECTION 38. IC 6-7-1-0.4, AS ADDED BY P.L.220-2011,
23 SECTION 161, IS AMENDED TO READ AS FOLLOWS
24 [EFFECTIVE JULY 1, 2025]: Sec. 0.4. (a) Notwithstanding section 14
25 of this chapter, revenue stamps paid for before July 1, 2007, and in the
26 possession of a distributor may be used after June 30, 2007, only if the
27 full amount of the tax imposed by section 12 of this chapter, as
28 effective after June 30, 2007, and as amended by P.L.218-2007, is
29 remitted to the department under the procedures prescribed by the
30 department.
31 (b) Notwithstanding section 14 of this chapter, revenue stamps
32 paid for before July 1, 2025, and in the possession of a distributor
33 may be used after June 30, 2025, only if the full amount of the tax
34 imposed by section 12 of this chapter, as amended and effective
35 after June 30, 2025, is remitted to the department under the
36 procedures prescribed by the department.
37 SECTION 39. IC 6-7-1-12, AS AMENDED BY P.L.191-2016,
38 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 JULY 1, 2025]: Sec. 12. The following taxes are imposed, and shall be
40 collected and paid as provided in this chapter, upon the sale, exchange,
41 bartering, furnishing, giving away, or otherwise disposing of cigarettes
42 within the state of Indiana:
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1 (1) On cigarettes weighing not more than three (3) pounds per
2 thousand (1,000), a tax at the rate of four and nine hundred
3 seventy-five thousandths cents ($0.04975) nine and nine
4 hundred seventy-five thousandths cents ($0.09975) per
5 individual cigarette.
6 (2) On cigarettes weighing more than three (3) pounds per
7 thousand (1,000), a tax at the rate of six and six hundred twelve
8 thousandths cents ($0.06612) thirteen and two hundred
9 fifty-seven thousandths cents ($0.13257) per individual
10 cigarette, except that if any cigarettes weighing more than three
11 (3) pounds per thousand (1,000) shall be more than six and
12 one-half (6 1/2) inches in length, they shall be taxable at the rate
13 provided in subdivision (1), counting each two and three-fourths
14 (2 3/4) inches (or fraction thereof) as a separate cigarette.
15 SECTION 40. IC 6-8.1-7-1, AS AMENDED BY P.L.118-2024,
16 SECTION 21, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2025]: Sec. 1. (a) This subsection does not apply to the
18 disclosure of information concerning a conviction on a tax evasion
19 charge. Unless in accordance with a judicial order or as otherwise
20 provided in this chapter, the department, its employees, former
21 employees, counsel, agents, or any other person may not divulge the
22 amount of tax paid by any taxpayer, terms of a settlement agreement
23 executed between a taxpayer and the department, investigation records,
24 investigation reports, or any other information disclosed by the reports
25 filed under the provisions of the law relating to any of the listed taxes,
26 including required information derived from a federal return, except to
27 any of the following when it is agreed that the information is to be
28 confidential and to be used solely for official purposes:
29 (1) Members and employees of the department.
30 (2) The governor.
31 (3) A member of the general assembly or an employee of the
32 house of representatives or the senate when acting on behalf of a
33 taxpayer located in the member's legislative district who has
34 provided sufficient information to the member or employee for
35 the department to determine that the member or employee is
36 acting on behalf of the taxpayer.
37 (4) An employee of the legislative services agency to carry out the
38 responsibilities of the legislative services agency under
39 IC 2-5-1.1-7 or another law.
40 (5) The attorney general or any other legal representative of the
41 state in any action in respect to the amount of tax due under the
42 provisions of the law relating to any of the listed taxes.
2025 IN 394—LS 7250/DI 120 71
1 (6) Any authorized officers of the United States.
2 (b) The information described in subsection (a) may be revealed
3 upon the receipt of a certified request of any designated officer of the
4 state tax department of any other state, district, territory, or possession
5 of the United States when:
6 (1) the state, district, territory, or possession permits the exchange
7 of like information with the taxing officials of the state; and
8 (2) it is agreed that the information is to be confidential and to be
9 used solely for tax collection purposes.
10 (c) The information described in subsection (a) relating to a person
11 on public welfare or a person who has made application for public
12 welfare may be revealed to the director of the division of family
13 resources, and to any director of a county office of the division of
14 family resources located in Indiana, upon receipt of a written request
15 from either director for the information. The information shall be
16 treated as confidential by the directors. In addition, the information
17 described in subsection (a) relating to a person who has been
18 designated as an absent parent by the state Title IV-D agency shall be
19 made available to the state Title IV-D agency upon request. The
20 information shall be subject to the information safeguarding provisions
21 of the state and federal Title IV-D programs.
22 (d) The name, address, Social Security number, and place of
23 employment relating to any individual who is delinquent in paying
24 educational loans owed to a postsecondary educational institution may
25 be revealed to that institution if it provides proof to the department that
26 the individual is delinquent in paying for educational loans. This
27 information shall be provided free of charge to approved postsecondary
28 educational institutions (as defined by IC 21-7-13-6(a)). The
29 department shall establish fees that all other institutions must pay to the
30 department to obtain information under this subsection. However, these
31 fees may not exceed the department's administrative costs in providing
32 the information to the institution.
33 (e) The information described in subsection (a) relating to reports
34 submitted under IC 6-6-1.1-502 concerning the number of gallons of
35 gasoline sold by a distributor and IC 6-6-2.5 concerning the number of
36 gallons of special fuel sold by a supplier and the number of gallons of
37 special fuel exported by a licensed exporter or imported by a licensed
38 transporter may be released by the commissioner upon receipt of a
39 written request for the information.
40 (f) The information described in subsection (a) may be revealed
41 upon the receipt of a written request from the administrative head of a
42 state agency of Indiana when:
2025 IN 394—LS 7250/DI 120 72
1 (1) the state agency shows an official need for the information;
2 and
3 (2) the administrative head of the state agency agrees that any
4 information released will be kept confidential and will be used
5 solely for official purposes.
6 (g) The information described in subsection (a) may be revealed
7 upon the receipt of a written request from the chief law enforcement
8 officer of a state or local law enforcement agency in Indiana when it is
9 agreed that the information is to be confidential and to be used solely
10 for official purposes.
11 (h) The name and address of retail merchants, including township,
12 as specified in IC 6-2.5-8-1(k) may be released solely for tax collection
13 purposes to township assessors and county assessors.
14 (i) The department shall notify the appropriate innkeeper's tax
15 board, bureau, or commission that a taxpayer is delinquent in remitting
16 innkeepers' taxes under IC 6-9.
17 (j) All information relating to the delinquency or evasion of the
18 vehicle excise tax may be disclosed to the bureau of motor vehicles in
19 Indiana and may be disclosed to another state, if the information is
20 disclosed for the purpose of the enforcement and collection of the taxes
21 imposed by IC 6-6-5.
22 (k) All information relating to the delinquency or evasion of
23 commercial vehicle excise taxes payable to the bureau of motor
24 vehicles in Indiana may be disclosed to the bureau and may be
25 disclosed to another state, if the information is disclosed for the
26 purpose of the enforcement and collection of the taxes imposed by
27 IC 6-6-5.5.
28 (l) All information relating to the delinquency or evasion of
29 commercial vehicle excise taxes payable under the International
30 Registration Plan may be disclosed to another state, if the information
31 is disclosed for the purpose of the enforcement and collection of the
32 taxes imposed by IC 6-6-5.5.
33 (m) All information relating to the delinquency or evasion of the
34 excise taxes imposed on recreational vehicles and truck campers that
35 are payable to the bureau of motor vehicles in Indiana may be disclosed
36 to the bureau and may be disclosed to another state if the information
37 is disclosed for the purpose of the enforcement and collection of the
38 taxes imposed by IC 6-6-5.1.
39 (n) This section does not apply to:
40 (1) the beer excise tax, including brand and packaged type (IC
41 7.1-4-2);
42 (2) the liquor excise tax (IC 7.1-4-3);
2025 IN 394—LS 7250/DI 120 73
1 (3) the wine excise tax (IC 7.1-4-4);
2 (4) the hard cider excise tax (IC 7.1-4-4.5);
3 (5) the vehicle excise tax (IC 6-6-5);
4 (6) the commercial vehicle excise tax (IC 6-6-5.5); and
5 (7) the fees under IC 13-23.
6 (o) The name and business address of retail merchants within each
7 county that sell tobacco products may be released to the division of
8 mental health and addiction and the alcohol and tobacco commission
9 solely for the purpose of the list prepared under IC 6-2.5-6-14.2.
10 (p) The name and business address of a person licensed by the
11 department under IC 6-6 or IC 6-7, or issued a registered retail
12 merchant's certificate under IC 6-2.5, may be released for the purpose
13 of reporting the status of the person's license or certificate.
14 (q) The department may release information concerning total
15 incremental tax amounts under:
16 (1) IC 5-28-26;
17 (2) IC 36-7-13;
18 (3) IC 36-7-26;
19 (4) IC 36-7-27;
20 (5) IC 36-7-31;
21 (6) IC 36-7-31.3; or
22 (7) any other statute providing for the calculation of incremental
23 state taxes that will be distributed to or retained by a political
24 subdivision or other entity;
25 to the fiscal officer of the political subdivision or other entity that
26 established the district or area from which the incremental taxes were
27 received if that fiscal officer enters into an agreement with the
28 department specifying that the political subdivision or other entity will
29 use the information solely for official purposes.
30 (r) The department may release the information as required in
31 IC 6-8.1-3-7.1 concerning:
32 (1) an innkeeper's tax, a food and beverage tax, or an admissions
33 tax under IC 6-9;
34 (2) the supplemental auto rental excise tax under IC 6-6-9.7; and
35 (3) the covered taxes allocated to a professional sports
36 development area fund, sports and convention facilities operating
37 fund, or other fund under IC 36-7-31 and IC 36-7-31.3.
38 (s) Information concerning state gross retail tax exemption
39 certificates that relate to a person who is exempt from the state gross
40 retail tax under IC 6-2.5-4-5 may be disclosed to a power subsidiary (as
41 defined in IC 6-2.5-1-22.5) or a person selling the services or
42 commodities listed in IC 6-2.5-4-5 for the purpose of enforcing and
2025 IN 394—LS 7250/DI 120 74
1 collecting the state gross retail and use taxes under IC 6-2.5.
2 (t) (s) The department may release a statement of tax withholding
3 or other tax information statement provided on behalf of a taxpayer to
4 the department to:
5 (1) the taxpayer on whose behalf the tax withholding or other tax
6 information statement was provided to the department;
7 (2) the taxpayer's spouse, if:
8 (A) the taxpayer is deceased or incapacitated; and
9 (B) the taxpayer's spouse is filing a joint income tax return
10 with the taxpayer; or
11 (3) an administrator, executor, trustee, or other fiduciary acting on
12 behalf of the taxpayer if the taxpayer is deceased.
13 (u) (t) Information related to a listed tax regarding a taxpayer may
14 be disclosed to an individual without a power of attorney under
15 IC 6-8.1-3-8(a)(2) if:
16 (1) the individual is authorized to file returns and remit payments
17 for one (1) or more listed taxes on behalf of the taxpayer through
18 the department's online tax system before September 8, 2020;
19 (2) the information relates to a listed tax described in subdivision
20 (1) for which the individual is authorized to file returns and remit
21 payments;
22 (3) the taxpayer has been notified by the department of the
23 individual's ability to access the taxpayer's information for the
24 listed taxes described in subdivision (1) and the taxpayer has not
25 objected to the individual's access;
26 (4) the individual's authorization or right to access the taxpayer's
27 information for a listed tax described in subdivision (1) has not
28 been withdrawn by the taxpayer; and
29 (5) disclosure of the information to the individual is not
30 prohibited by federal law.
31 Except as otherwise provided by this article, this subsection does not
32 authorize the disclosure of any correspondence from the department
33 that is mailed or otherwise delivered to the taxpayer relating to the
34 specified listed taxes for which the individual was given authorization
35 by the taxpayer. The department shall establish a date, which may be
36 earlier but not later than September 1, 2023, after which a taxpayer's
37 information concerning returns and remittances for a listed tax may not
38 be disclosed to an individual without a power of attorney under
39 IC 6-8.1-3-8(a)(2) by providing notice to the affected taxpayers and
40 previously authorized individuals, including notification published on
41 the department's website. After the earlier of the date established by the
42 department or September 1, 2023, the department may not disclose a
2025 IN 394—LS 7250/DI 120 75
1 taxpayer's information concerning returns and remittances for a listed
2 tax to an individual unless the individual has a power of attorney under
3 IC 6-8.1-3-8(a)(2) or the disclosure is otherwise allowed under this
4 article.
5 (v) (u) The department may publish a list of persons, corporations,
6 or other entities that qualify or have qualified for an exemption for
7 sales tax under IC 6-2.5-5-16, IC 6-2.5-5-25, or IC 6-2.5-5-26, or
8 otherwise provide information regarding a person's, corporation's, or
9 entity's exemption status under IC 6-2.5-5-16, IC 6-2.5-5-25, or
10 IC 6-2.5-5-26. For purposes of this subsection, information that may be
11 disclosed includes:
12 (1) any federal identification number or other identification
13 number for the entity assigned by the department;
14 (2) any expiration date of an exemption under IC 6-2.5-5-25;
15 (3) whether any sales tax exemption has expired or has been
16 revoked by the department; and
17 (4) any other information reasonably necessary for a recipient of
18 an exemption certificate to determine if an exemption certificate
19 is valid.
20 (w) (v) The department may share a taxpayer's name and other
21 personal identification information with a tax preparer or tax
22 preparation software provider in cases where the department suspects
23 that a fraudulent return has been filed on behalf of a taxpayer and the
24 department suspects that the system of a taxpayer's previous year tax
25 preparer or tax preparation software provider has been breached.
26 SECTION 41. IC 7.1-4-2-1 IS AMENDED TO READ AS
27 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 1. An excise tax,
28 referred to as the beer excise tax, at the rate of eleven and one-half
29 cents ($.115) twenty-three cents ($0.23) a gallon is imposed upon the
30 sale of beer or flavored malt beverage within Indiana.
31 SECTION 42. IC 7.1-4-3-1 IS AMENDED TO READ AS
32 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 1. Rate of Tax. An
33 excise tax at the rate of two dollars and sixty-eight cents ($2.68) five
34 dollars and thirty-six cents ($5.36) a gallon is imposed upon the sale,
35 gift, or the withdrawal for sale or gift, of liquor and wine that contains
36 twenty-one percent (21%), or more, of absolute alcohol reckoned by
37 volume.
38 SECTION 43. IC 7.1-4-4-1 IS AMENDED TO READ AS
39 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 1. An excise tax at the
40 rate of forty-seven cents ($0.47) ninety-four cents ($0.94) a gallon is
41 imposed upon the manufacture and sale or gift, or withdrawal for sale
42 or gift, of wine, except hard cider, within this state.
2025 IN 394—LS 7250/DI 120 76
1 SECTION 44. IC 7.1-4-4.5-1 IS AMENDED TO READ AS
2 FOLLOWS [EFFECTIVE JULY 1, 2025]: Sec. 1. An excise tax at the
3 rate of eleven and one-half cents ($0.115) twenty-three cents ($0.23)
4 a gallon is imposed upon the manufacture and sale or gift, or
5 withdrawal for sale or gift, of hard cider within Indiana.
6 SECTION 45. IC 7.1-4-7-5, AS AMENDED BY P.L.165-2021,
7 SECTION 125, IS AMENDED TO READ AS FOLLOWS
8 [EFFECTIVE JULY 1, 2025]: Sec. 5. (a) The department shall deposit:
9 (1) four cents ($0.04) of the beer excise tax rate collected on each
10 gallon of beer or flavored malt beverage;
11 (2) one dollar ($1) of the liquor excise tax rate collected on each
12 gallon of liquor;
13 (3) twenty-five cents ($0.25) of the wine excise tax rate collected
14 on each gallon of wine;
15 (4) the entire amount eleven and one-half cents ($0.115) of malt
16 excise tax collected; and
17 (5) the entire amount eleven and one-half cents ($0.115) of hard
18 cider excise tax collected;
19 daily with the treasurer of state and not later than the fifth day of the
20 following month shall cover them into the general fund of the state for
21 distribution as provided in this chapter.
22 (b) In addition to the deposits in subsection (a), the department
23 shall deposit:
24 (1) eleven dollars and fifty cents ($11.50) of the beer excise tax
25 rate collected on each gallon of beer or flavored malt
26 beverage;
27 (2) two dollars and sixty-seven cents ($2.67) of the liquor
28 excise tax rate collected on each gallon of liquor;
29 (3) forty-seven cents ($0.47) of the wine excise tax rate
30 collected on each gallon of wine;
31 (4) eleven and one-half cents ($0.115) of malt excise tax
32 collected; and
33 (5) eleven and one-half cents ($0.115) of hard cider excise tax
34 collected;
35 daily with the treasurer of state and not later than the fifth day of
36 the following month shall cover them into the state general fund.
37 SECTION 46. [EFFECTIVE JULY 1, 2025] For the state fiscal
38 years beginning after June 30, 2025, and ending before July 1,
39 2027, there is appropriated one hundred forty million dollars
40 ($140,000,000) from the state general fund to the department of
41 education to be used as supplemental funding for the federal Child
42 Care and Development Fund voucher program administered under
2025 IN 394—LS 7250/DI 120 77
1 45 CFR 98 and 45 CFR 99.
2025 IN 394—LS 7250/DI 120