IndianaBill would let qualifying home businesses operate without municipal permits
If enacted, the bill would let people run qualifying businesses from home without municipal permits, while preserving narrow local rules and property restrictions.
What it does
A municipality would have to allow a qualifying home business without requiring a permit or other municipal approval. Property restrictions set by deeds or homeowners’ and condominium associations would still apply.
Municipalities could still make narrowly tailored safety and neighborhood rules for qualifying home businesses. They could also limit or ban certain uses, including structured sober living homes and sales of illegal drugs, liquor, or pornography.
Municipalities could not require commercial rezoning or fire sprinklers in covered homes as a condition of running a qualifying business. Courts could review local rules, and municipalities would have to prove those rules comply.
Argument forPeople with small home businesses could avoid municipal permit and licensing steps if their business meets the bill's limits.
Argument againstMunicipalities might have less room to address business activity that affects nearby residents, though they could still make narrowly tailored safety and neighborhood rules.
More detail
A municipality would have to allow a qualifying home business without requiring a municipal permit, license, or other approval. The business must be run by a home’s owner or tenant, stay within the dwelling’s municipal occupancy limit for employees and clients, and meet the bill’s limits on legal activity, traffic, location, and visibility. The rule would not override deed restrictions or homeowners' or condominium associations' governing documents. The section would take effect July 1, 2026, if enacted.
A municipality could make reasonable, narrowly tailored rules for certain purposes and could limit or prohibit specified business uses. These rules would apply to a no-impact home business as defined in the bill. Rules must be narrowly tailored to protect public health and safety, ensure the business fits residential use, remains secondary to living in the home, follows state and federal law, or pays applicable taxes. A municipality could limit or prohibit using the business to run a structured sober living home; make, display, distribute, or sell illegal drugs, liquor, pornography, or obscenity; or run an adult entertainment business. The section would take effect July 1, 2026, if enacted.
A municipality could not require rezoning for commercial use or fire sprinklers as a condition of operating a qualifying home business; a court could review whether municipal rules comply. The limits apply to a no-impact home business as defined in the bill. The sprinkler restriction covers single-family detached homes and homes with no more than two dwelling units. The municipality would have to prove by clear and convincing evidence that its rule complies with the section. The section would take effect July 1, 2026, if enacted.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jan 6First reading: referred to Committee on Local GovernmentLatest
- Jan 6Authored by Representative Morris
- Jan 6Coauthored by Representatives Teshka, VanNatter, JudyIntroduced
HousingEconomy & JobsGovernment & Ethics