On May 6, 2025, Indiana Governor Mike Braun signed HEA 1427 into law, formally amending several key provisions of the state’s recently passed Senate Bill 1 (SB1)—legislation that overhauled Indiana’s business personal property tax rules in April.
While many of SB1’s reforms remain intact, HEA 1427 repeals the planned $1 million exemption for the 2025 assessment year and introduces a compliance deadline for businesses that filed early under the original provisions.
What Changed
No $1M exemption for 2025
SB1 had raised the business personal property exemption threshold to $1 million for the 2025 assessment year. That increase has now been repealed under HEA 1427. The exemption remains at $80,000 for 2025.
$2M exemption in 2026 remains
The increase to $2 million, originally scheduled for the 2026 assessment year and beyond, remains unchanged. The exemption applies if the total acquisition cost of a taxpayer’s business personal property within a county is less than $2 million.
May 31 amendment deadline for early filers
Businesses that submitted 2025 returns before April 28 and claimed the now-repealed $1M exemption must file an amended return by May 31, 2025, to avoid compliance issues.
“A taxpayer… who claimed an exemption… of more than $80,000… under provisions enacted in SEA 1-2025… must file an amended return not later than May 31, 2025.”
—(HEA 1427, Section 14; IC 6-1.1-3-7.2(g)
Expanded application of the 30% floor exemption
SB1 had removed the 30% minimum valuation floor for new depreciable personal property placed in service after Jan 1, 2025, except where the property is located in a tax increment allocation area or its tax revenue was pledged for bonds, leases, or similar obligations. HEA 1427 broadens this benefit by eliminating the exception for property if the property’s tax revenue was pledged for bonds, leases, or other obligations.
As a result, all qualifying new property placed in service after January 1, 2025, is exempt from the 30% floor unless located in an existing tax increment allocation area.
Why This Matters for Businesses
For companies that acted quickly after SB1 was signed, the most immediate concern is compliance. If your business filed a 2025 personal property return before April 28 and claimed the now-repealed $1 million exemption, you may be required to file an amended return by May 31, 2025, to avoid potential noncompliance issues. The exemption threshold for 2025 remains at $80,000.
Looking ahead, the planned $2 million exemption for 2026 and beyond remains in place—an important savings opportunity for capital-intensive businesses preparing for future investments. Additionally, the removal of the exception tied to the 30% valuation floor could result in broader tax relief than originally expected under SB1, particularly for companies operating in TIF districts or under financing agreements tied to personal property tax revenue.
In a fast-changing legislative environment, timely adjustments to filing and valuation strategies are essential. Businesses should review their Indiana filings to ensure they reflect the most current law—and should work with experienced property tax professionals to stay ahead of future developments.
Indiana Property Tax Expertise
DMA’s Indiana property tax team helps businesses navigate legislative changes, reduce liabilities, and ensure fair and accurate assessments.
Contact our Indiana experts to discuss your company’s real and personal property tax exposure and explore how we can help you stay ahead of the changes enacted under SB1.
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