Indiana Increases Business Personal Property Tax Exemption

Indiana Business Property Tax Reform: What You Need to Know

Indiana has taken a significant step toward easing tax burdens on businesses with the passage of Senate Enrolled Act 1 (SEA 1). Effective retroactively from January 1, 2025, the new legislation raises the business personal property exemption threshold from $80,000 to $1 million per county in acquisition cost. That threshold will double to $2 million for 2026.

In another major shift, the longstanding “30% floor” on the depreciation of equipment will be phased out for assets installed after January 1, 2025—a change that could substantially reduce taxable values for qualifying new equipment.

However, because these changes were enacted after many 2025 returns were filed, taxpayers may need to file amended returns. As of now, the Indiana Department of Local Government Finance (DLGF) has not yet released final guidance on how these provisions will be administered.

Key Takeaways:

• Exemption threshold jumps to $1M in 2025 and $2M in 2026.
• Applies retroactively to January 1, 2025.
• 30% depreciation floor being eliminated for new equipment.
• Amended returns may be needed for early filers.
• Final administrative guidance from the DLGF is still pending.

Given the ongoing changes, businesses should strongly consider filing returns in 2025—even if they believe they’re exempt—to remain compliant while administrative details are finalized.

Contact Baden Tax Management today to ensure you're positioned for compliance—and savings.

NOTE: The Indiana DLGF has updated their reform. For the most recent update, check our latest entry here.