A new property tax plan from Indiana House Republicans prevailed over qualms from Democrats on Monday, advancing to the House floor for further considerations after the 15-8 committee vote.
Senate Bill 1 would now let counties increase their local income taxes and — for the first time — allow cities to implement their own local income taxes. Under a massive amendment adopted Monday, counties would be able to levy an income tax up to 2.9%, up from the current 2.5% cap, while cities could go up to 1.2%.
The legislation would also phase out, by 2030, the business personal property tax on anything purchased this year or later.
Democrats balked at voting for the 368-page amendment without any fiscal foresight. The Legislative Services Agency doesn’t draft fiscal notes on amendments until they’re adopted.
“(This) is not ready for prime time,” said Rep. Greg Porter, D-Indianapolis. “We still have a lot of movement on it to get it to the point that we can even entertain it, as Democrats.”
Amendment author Rep. Jeff Thompson, R-Lizton, said it balances local government funding needs with relief for homeowners.
“Ninety-three percent (of homeowners) will pay less than they would have without this bill,” said Thompson, who chairs the committee. “Fifty-five percent will actually pay less in pay ‘26 than pay ‘25 and we do know that it’s roughly $200 per home.”
Thompson said that analysts hoped to release an updated fiscal note on the new property tax plan by this evening.