Indiana Houses passes amended SB 1, bill heads back to Senate for final action

INDIANAPOLIS — After weeks of major rewrites and public outcry, the Indiana House passed an amended SB 1 Thursday in a 65-29 vote.

Although the amended bill doesn’t fully align with Gov. Mike Braun’s original property tax relief plan, House Republicans argued that their version saves Hoosier homeowners $1.4 billion in property taxes over the next three years. Roughly two-thirds of Hoosier homeowners will pay less in property taxes in 2026 than they will in 2025 under this plan, according to Indiana House Speaker Todd Huston.

“I think we’ve found that balance,” Speaker Huston said. “You hit the sweet spot when everyone’s cranky on every side of the issue, but they should be pleased with the type of support we’re providing.”

Hours after the vote, Gov. Braun posted the following statement to X:

“SB 1 offers meaningful tax relief for Hoosiers. The plan to CUT, CAP, and REFORM means relief now and systemic changes for the future to protect taxpayers. Thank you to the House for their hard work and I look forward to the Senate sending this to my desk for signature next week!”

But House Democrats said the bill would cut $1.4 billion from local governments, including $750 million for local schools, over the next three years. Because the bill allows municipalities that meet a certain threshold to impose a local income tax (LIT) of up to 1.2%, Democrats argue that local income taxes could go up more than $1 billion each year to make up for fewer property tax revenues.

“It’s a tax hike,” State Rep. Gregory W. Porter (D-Indianapolis) said. “It’s a tax hike on all of us here.”

“The drastic change in Indiana’s tax policy will force local communities to raise your taxes to keep schools open and ambulances running,” State Rep. Phil GiaQuinta (D-Fort Wayne) said.

“We are going to find by this time next year, there are big winners and big losers,” Michael Hicks, director of the Center for Business and Economic Research at Ball State University, said.

According to Hicks, the bill will most likely shift the tax burden from seniors, disabled veterans and wealthier homeowners to younger, poorer Hoosiers.

“We’re going to see some households that are walking out of this with several $100 per year in their pocket, and other households that find themselves several $100 per year poorer because of the offsetting income tax,” Hicks said.

Senate Republicans said discussions will likely take place over the weekend to determine if the Senate will concur with the House’s changes.

“We’ve had leadership meetings with the House, the Governor’s Office and the Senate, so I think that will be a group discussion,” State Sen. Ryan Mishler (R-Mishawaka) said. “I think this year, we’ve seen a lot of collaboration between the House and the Senate. I think you’re going to see a lot more concurrences…I’d like to see, you know, that happen, so I think that will probably be discussed over the weekend.”