Indiana House Ways and Means debates extensive amendment to property tax bill

INDIANAPOLIS — The House Ways and Means Committee spent hours debating a 238-page amendment to Gov. Mike Braun’s property tax bill on Wednesday.

The committee chairman and author of the amendment, State Rep. Jeff Thompson (R-Lizton), said that one provision could save Indiana homeowners a combined $150 million they’d otherwise have to pay in property taxes next year under the state’s current tax structure.

The amendment, which was originally its own separate bill that failed to get a hearing in the first half of the 2025 legislative session, also reduces assessment values for homes that fall under the state’s 2% circuit breaker. However, the amendment removes key Senate provisions such as a proposed first-time homeowner tax credit, and deductions for seniors and veterans (instead, turning those into tax credits).

The amendment also makes a big change to how local income taxes (LIT) are collected and dispersed. According to Rep. Thompson, more than $5 billion in LIT dollars currently aren’t being utilized statewide.

To change this, he’s proposing having cities and municipalities set their own LIT rates with guardrails instead of relying on counties to divvy out dollars through a distribution formula.

“It’s going to be a shell shock,” Rep. Thompson said. “It’s going to be, I think, in some places, how much LIT has been going from one community to another, and I’m okay with that change because some have been subsidizing others to be blunt.”

It’s unclear how many of the amendment’s provisions will make it into the bill before lawmakers vote it out of committee.

“My prediction is what we’re going to end up with is going to be a combination of everything you see at this point and a lot of what I had in there,” Gov. Mike Braun said.