Tax Cuts for Hoosiers

Hoosiers work hard for their money, which is why Senate Republicans have supported over 20 tax cuts in the past 10 years.

Cutting Income Taxes

Thanks to laws supported by Senate Republicans in 2022 and 2023, Indiana is in the middle of a staggered individual income-tax cut that will save Hoosiers almost $500 million in 2025 and $2 billion in the first five years. The rate is guaranteed to go down each year until 2027, when it will reach 2.9%. Starting in 2030, a tax-cut trigger will kick in every other year if state revenue grows at a reasonable rate. 

Other income-tax cuts include:

  • Exempting military income for members of the Armed Forces and National Guard from the income tax;
  • Phasing out income taxes on military retirement pensions and survivors benefits;
  • Doubling the income-tax exemption parents can claim for a new child; and
  • Cutting the corporate income-tax rate by approximately 42%.

Learn more about what Senate Republicans are doing to cut income taxes here.

Cutting Property Taxes

Indiana has the eighth-lowest median property taxes in the nation for homeowners and one of the most taxpayer-friendly property-tax systems in the country. Property-tax rates are set and collected by local government officials, not the state or General Assembly, but it is important for state lawmakers to ensure Indiana's tax system works fairly for all Hoosiers.

Although Indiana's property-tax system compares positively to other states, Senate Republicans know many Hoosiers are feeling the pain of rising property-tax bills.

The biggest recent overhaul to Indiana's property-tax system came in 2025 with Senate Enrolled Act 1. This legislation is expected to save homeowners $1.3 billion by 2028 and save farmers $116 million through 2027. More information on this hallmark legislation can be found here.

In addition, Senate Republicans have supported many other initiatives in recent years to provide property-tax relief for homeowners, small-business owners and veterans, including the following.

  • Establishing constitutional property-tax caps, which were approved by voters
  • Expanding those who qualify for the disabled veterans property-tax deduction
  • Beginning with 2027 bills, the business personal property tax will be eliminated for all businesses with equipment under $2 million
  • Eliminating the assessed value limit so more Hoosiers over 65 qualify for the senior citizen circuit breaker credit
  • Requiring local referenda to be held during general elections to align with higher voter turnout and increase transparency of referenda questions
  • Creating a Property Tax Transparency Portal to allow taxpayers to compare their current tax bill with proposed tax rate changes
  • Removing local governments' ability to go above the operating levy growth cap and reining in local governments' ability to issue new debt without taxpayer input
  • By 2031, all homes will have a deduction worth two-thirds of their assessed value (the phase-in for this deduction begins in 2026)

In addition, beginning with property tax bills issued for 2026, every homestead will get an extra annual property tax credit to reduce their bills by 10% with a maximum savings of $300.

In addition to these initiatives, Senate Republicans also supported legislation to make the property-tax appeals process more taxpayer-friendly by stating that if a homeowner files an appeal for their home assessment, the assessed value of the property cannot go up as a result of the appeal. To learn more about the appeals process, click here.

Learn more about other efforts to cut property taxes here.

Returning Money to Taxpayers

In addition to supporting Hoosiers through steady tax cuts, Senate Republicans also supported returning money straight to taxpayers by way of the Automatic Taxpayer Refund (ATR), which was created by the General Assembly in 2011. The first ATR was delivered to Hoosiers in 2013, giving back $360 million to taxpayers. The second was delivered in 2021, returning $545 million, and a third ATR in 2022 returned $1 billion to taxpayers.

Continuing the Search for Improvements

Senate Republicans also supported the establishment of the State and Local Tax Review Task Force (SALTR) in 2023, which was created to take a comprehensive look at the state's tax system and see where improvements can be made for Hoosiers. The task force continued through the end of 2024, after which recommendations were made on how to further improve Indiana's tax system.

Learn more about the SALTR here.