The start of a new year means several new laws will go into effect for Hoosiers today.
A majority of Indiana’s new laws go into effect immediately after passage or on July 1, following each year’s legislative session. However, some provisions don’t go into effect until Jan. 1, especially if more time is needed to get the law ready to go.
Here’s a look at some of the new laws going into effect at the start of 2026.
Income tax
Hoosiers will pay less in income tax in 2026, thanks to a law passed a few years earlier.
As part of Indiana’s 2023 budget, House Enrolled Act 1001, lawmakers approved a series of decreases in the state’s income tax. Another decrease is set to take effect in 2026, lowering 2025’s 3% rate to 2.95%. This is roughly a yearly savings of $50 for someone with a $100,000 salary.
The final budget passed the House 70-27 and the Senate 39-10.
Property tax changes
Senate Enrolled Act 1 of 2025 reduces property taxes by increasing exemptions and deductions so that less of a property’s value is taxed.
Several provisions go into effect in 2026, including the phasing out of the standard deduction of $48,000 — the flat amount an average homeowner takes off their gross assessed value for tax purposes. At the same time, the percentage-based supplemental deduction will decrease.
For 2026, the standard deduction will remain $48,000, but the supplemental deduction will increase to 40% from 37.5%. And by 2031, the standard deduction will be gone, and the supplemental will be two-thirds of the property value, according to the law.
Additionally, a new credit will be taken off the end of homestead property tax bills for $300 or 10% of the tax bill, whichever is lower.
There are also changes to taxes for businesses. Companies were already able to pay less taxes on equipment, as their value depreciates over time, but until now, there had been a 30% floor — requiring businesses to pay taxes on at least 30% of the purchase price of the equipment. The floor is now gone starting Jan. 1.
A new supplemental deduction for rental properties and farmland also begins phasing in starting Jan. 1. It starts with 6% in 2026 and will increase to one-third of the gross assessed value in 2031.
SEA 1 also requires the Department of Local Government Finance to make a property tax transparency portal available online by Jan. 1. The portal will allow property owners can compare their current property tax bill to what the bill would be under a different rate, along with allowing them to provide feedback to state and local governments.
SEA 1 passed the House 65-29 and the Senate 27-22.
Updating your vehicle’s color
Hoosiers must update their vehicle registration if their vehicle’s exterior appearance is changed, per a new law passed by lawmakers in 2025.
Effective Jan. 1, SEA 331 of 2025 requires vehicle owners to notify the Indiana Bureau of Motor Vehicles if a person changes the color of their passenger vehicle in the following ways:
- Application of paint;
- Installation of a partial or full vinyl vehicle wrap; and/or
- The removal of a partial or full vinyl vehicle wrap
Anyone who fails to notify the BMV of this change within 30 days could receive a warning from law enforcement. Additionally, if the vehicle’s color was changed after it was used in the commission of a crime and the BMV was not notified of the change, the vehicle owner may be charged with a Class C misdemeanor, according to a news release from the BMV.
Customers can update the color of their vehicle on their registration by visiting a BMV branch, BMV Connect kiosk if their registration is already scheduled for renewal, or by logging on to their myBMV account, the news release says.
SEA 331 passed the Senate 45-2 and the House 73-17.
Data privacy
Hoosiers will have a new method to know and exercise control over the way their personal data is used by companies, or used at all. This includes requesting a copy of your data a company is using, requesting it be deleted and opting out of targeted advertising.
The new method is the result of SEA 5 of 2023, established a new article in the Indiana Code concerning consumer data protection. The Senate voted 47-0 and the House voted 98-0 to pass the law.
Bingo, casino night limts
Facilities that host bingo or casino game nights have new limits this year.
Under SEA 108 of 2025, a facility that hosts bingo or casino game nights cannot do so for more than three nights a week. SEA 108 passed the Senate 36-1 and the House 75-17.
Other laws
Additional laws going into effect include:
- HEA 1285 of 2025 — Schools need to have made sure at least one employee present during the school year has received nonviolent crisis intervention training. It also prohibits a school district from removing a student’s property without providing the student’s parent with the opportunity to collect the student’s property if the student has died, transferred, dropped out, or otherwise withdrawn from enrollment in the school corporation for any reason, or adopting a policy or otherwise preventing a parent of a student from recording a meeting concerning the student’s individualized education program. The law passed the House 90-0 and the Senate 46-1
- HEA 1380 of 2025 — Fees attached to registering electric vehicles in Indiana will no longer apply to motorcycle owners. The law passed the House 90-0 and the Senate 45-2.