Indiana would bar property taxes first due after 2027

Indiana would bar property assessments and property taxes first imposed or due after the stated dates. The rule covers physical property in Indiana. Officials could still collect taxes and penalties imposed before 2028. Other fees and charges on property that the law allows could continue. Assessments would stop after December 31, 2026; property taxes could not be first imposed or first due after December 31, 2027.

Indiana would charge sales tax on covered purchases of paid services. It covers paid services bought in Indiana. Work employees do for their employers is excluded. Education, health care, social assistance, and rentals of land or buildings for at least 30 days would be exempt. The rate could fall to 6.75% if a reserve holds enough for 12 months of payments. It would return to 7% if the reserve could not cover six months. The service tax provisions would take effect July 1, 2027.

The state would send service tax money from a dedicated fund to schools and local taxing units. Recipients include school districts, charter schools, other eligible schools, and local taxing units. The state would set aside part of the money for a reserve. Local taxing units would use their shares to pay older debts backed by property taxes before spending the rest on other lawful purposes. Monthly distributions would begin after December 31, 2027.

School districts would charge an annual fee to owners of parcels in their territory. It covers parcel owners in school districts that imposed those voter-approved tax levies. A district must have imposed a school project, operations, or safety tax levy that voters approved before May 10, 2026. The amount depends on the district's 2027 receipts from those measures and each parcel's share of 2027 taxable property value. The fee would begin in 2028 and end when each measure was originally set to expire.

Local governments would be barred from taking on certain property tax backed debts and changing covered development areas. The debt ban covers bonds, notes, leases, and similar obligations paid from property taxes. The area ban covers redevelopment project areas and other covered development districts. Local governments also could not issue or extend debt for covered development areas. They could refinance obligations incurred before May 10, 2026. The restrictions would apply after May 9, 2026.