HB1288 • 2026

A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an appropriation.

Budget Education Healthcare Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Representative J.D. Prescott
Last action: 2026-01-06
Official status: Introduced House Bill (H)
Effective date: Not listed

Plain English Breakdown

The bill summary does not provide specific details on how much money will be in the local revenue sharing fund or what changes will be made to statutes for the next legislative session, leaving these points uncertain.

Indiana Tax and Finance Bill

This bill ends property taxes, restricts local government financing through property tax revenue, extends sales and use tax to services (excluding healthcare), establishes a local revenue sharing fund, and requires school corporations to charge annual fees.

What This Bill Does

Ends the assessment of tangible property after December 31, 2026, and stops property taxes from being imposed after December 31, 2027.
Prevents political subdivisions from issuing new bonds or leases that depend on property tax revenue.
Establishes a local revenue sharing fund to distribute sales and use tax money collected from services (excluding healthcare).
Extends the sales and use tax to cover transactions involving most services but excludes health care, mental health services, and charitable services.
Requires school corporations to charge an annual fee instead of collecting property taxes for certain purposes.

Who It Names or Affects

Residents who pay property taxes in Indiana
Schools that rely on property tax revenue
Local governments and political subdivisions

Terms To Know

sales and use tax: A tax on buying goods or services, collected by sellers from buyers.

Limits and Unknowns

The bill does not specify how much money will be in the local revenue sharing fund.
It is unclear what specific changes will be made to statutes for the next legislative session.

Bill History

2026-01-06 House
Authored by Representative Prescott
2026-01-06 House
Coauthored by Representatives Haggard, Lucas, Payne
2026-01-06 House
First reading: referred to Committee on Ways and Means

Official Summary Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an
appropriation.
Local government finance.

Current Bill Text

Read the full stored bill text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an
appropriation.

Local government finance.

Abolishes the assessment of tangible property after December 31, 2026, and the imposition of property taxes after December 31, 2027. Provides that a political subdivision may not issue any new bonds, notes, or warrants, or enter into any leases or obligations to be paid from property tax revenue, or that include a pledge to levy property taxes if other funds are insufficient. Provides that: (1) no property tax increment financing district or allocation area may be established, amended, or renewed; and (2) no bonds, leases, or other obligations may be issued, entered into, or extended for a property tax increment financing district or allocation area. Provides that a school corporation may impose an annual fee to replace the loss of revenue previously collected by the school corporation from the imposition of an operating referendum tax levy or school safety referendum tax levy. Prescribes procedures for the fixing and reviewing of a political subdivision's budget. Prohibits the imposition of new levies for controlled projects, operating referenda, and school safety referenda. Abolishes the offices of county assessor and township assessor. Extends the sales and use tax application to transactions involving services, except for health care or mental health services (including insurance premiums for policies covering these services) and services provided for charitable tax exempt purposes. Establishes the local revenue sharing fund (fund) into which revenue from the portion of revenue from the extended sales and use tax is to be deposited. Requires the state comptroller to distribute to taxing units the portion of all the state sales and use tax revenue attributable to services from the fund. Continually appropriates money from the fund. Requires the legislative services agency to prepare legislation for introduction in the 2027 regular session of the general assembly to make appropriate required changes in statutes. Makes corresponding changes.