Tax Reform on the Horizon: Lawmakers Gear Up for Legislative Session!
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After two long years of discussions, debates, and campaign promises, lawmakers are finally pulling back the curtain on their tax reform plans for the upcoming 2025 session. Exciting times are ahead!
So far, around 300 proposed bills have hit the table as the General Assembly gears up for action. Among these, at least 12 tax-related proposals are making waves, aimed at reshaping property tax credits, deductions, and even imposing freezes on tax bills. And don’t forget about the anticipated tweaks to gas, income, and sales taxes!
Bill introductions and committee assignments will kick off next week, setting the stage for a thrilling legislative showdown.
During the past two years, a legislative committee has been deep in the weeds studying property taxes, leading to sweeping recommendations that came to light last November. Senate Tax and Fiscal Policy Chair Travis Holdman has indicated that his caucus is primed to roll out between 12 and 15 property tax bills soon.
Hot on the heels of his campaign, Governor-elect Mike Braun is making headlines with his promise to follow through on significant property tax cuts. His game plan? A cap on property tax bill increases: just 2% annually for seniors, low-income individuals, and families with kids under 18—and a slightly higher 3% for everyone else. If an increase surpasses those limits? Voter approval will be necessary, though the process remains a bit murky regarding how referendums will navigate varying tax increases.
And that’s not all! Braun’s vision includes a staggering 60% reduction in assessed values for homeowners whose properties are valued at over $125,000. For those below that threshold? They’ll also enjoy a 60% reduction on their assessments, alongside the current standard deduction of $48,000!
Let’s dive into the tax bills that have been filed so far:
Streamlining Property Taxes
Lawmakers are laser-focused on cutting assessed values via deductions and offering targeted tax relief for seniors and veterans. Keep an eye on these property tax-focused bills—they could have multi-million dollar consequences for local governments!
For instance, Rep. Heath VanNatter has introduced House Bill 1028, which would lock in a homeowner’s property tax liability at the 2025 rate. House Bill 1075 by Rep. Craig Haggard proposes a similar freeze.
Haggard’s bill also aims to double the deduction for disabled veterans, effectively reducing assessed value by $50,000. And wait for it—seniors could see their tax bills wiped clean with a 100% tax credit!
Sen. Rick Niemeyer’s Senate Bill 105 suggests refreshing the assessed value of real property every four years instead of annually. This could stabilize bills during non-assessment years, while also possibly creating larger adjustments during revaluations.
A trio of Republican lawmakers is stepping up to propose the elimination of the assessed value cap on property tax deductions for veterans. With Senate Bill 41, authored by Sens. Dan Dernulc, Jim Tomes, and Niemeyer, nearly 16,000 veterans could tap into about $220.4 million in additional deductions come 2027!
Rep. David Abbott and Rep. Ben Smaltz have teamed up to craft House Bill 1101, which includes a series of property tax adjustments for Hoosiers aged 65 and older. This bill aims to raise the adjusted gross income threshold by $10,000, plus adjust the maximum assessed value cap for deductions to $350,000.
Moreover, Sen. La Keisha Jackson is proposing a bill that allows seniors who’ve owned their homes for at least five years to take a whopping $120,000 deduction off their property’s assessed value.
Lowering Income Taxes
But that’s not where the excitement ends! New bills are also emerging that could sweeten the pot for some Hoosiers by lowering income tax returns.
Rep. Kyle Pierce’s House Bill 1018 aims to spark renovations by providing a tax credit for homeowners with properties over 85 years old—20% of renovation costs, or a whopping 55% if it involves pre-1940 wiring!
Sen. Jim Tomes is pursuing an increase to the maximum renter’s income deduction from $3,000 to $4,000 under Senate Bill 25.
And get this—Democrat Sen. Lonnie Randolph is pushing Senate Bill 154 to boost the income tax credit for teachers’ classroom supplies from $100 to $500, while also expanding a $1,000 per child tax credit to include public school parents!
Other Tax Changes on the Horizon
And last but not least, Rep. Mark Genda is taking a stand with House Bill 1042, calling for the removal of sales tax on feminine hygiene products and adult diapers. This change could impact state sales tax revenue by about $11 million in its inaugural year, but it’s a powerful step toward fairness in taxation.
Stay Tuned for More Updates!
