The 2026 session of the Indiana General Assembly has officially concluded, and several new laws and policy changes will directly impact the small business community. Below you will find a comprehensive post-session list of key legislation that has passed, bills that were stopped or amended, tax and regulatory changes taking effect, and workforce and employment updates.

*Please join us on March 13^th for an end of session webinar. Register here!

Headlines

Here are some of the major issues that made headlines and ruffled feathers this session:

• The legislature cleared the path and sweetened the pot for the Chicago Bears to relocate to Hammond through the Stadium Authority bill. The ball is now in the Bears’ “field.”
• Legislation was passed that would allow the guard’s leader to establish a military police unit of Indiana National Guard members with police powers: arrests, searches, seizures, and more.
• A measure was passed that makes it possible for people sleeping on the streets to be charged with misdemeanor offenses and allows police to arrest people if there are grounds for “ER detention.”
• In the wake of the Hailey Buzbee tragedy, lawmakers responded by passing a set of sweeping social media restrictions for minors. They also passed a “bell to bell” cell phone ban in schools.
• As Medicaid accounts for the fastest-growing portion of the Indiana state budget, lawmakers took aim with a bill that reshapes parts of Indiana’s long-term care system.
• Lawmakers passed legislation that allows for a casino in northeast Indiana. The bill’s passage came after a tight vote with Senators in the impacted district on opposing ends of the debate.

Energy

HB 1002 requires utilities to have low-income assistance programs and moves Indiana towards performance-based ratemaking as opposed to the traditional cost-of-service model. The goal is to help stabilize energy rates and provide more certainty for consumers.

The Indiana Utility Regulatory Commission will soon hold an inquiry into energy affordability. Energy is a top priority for Indiana small businesses, and NFIB will continue to be at the forefront of this issue.

Regulations

A Republican priority measure, HB 1001, intended to bring more housing stock to the market by streamlining local regulations on permitting and zoning. Concerns about overriding local control watered down the bill, as the Senate let towns opt out of the majority of the bill’s provisions.

HB 1003 originally targeted 63 boards, commissions, committees, and councils for elimination at the end of this year. Senate amendments dialed that number back to 41 and delayed the eliminations until July 2027 to allow for possible changes during next year’s session. It also re-establishes a board overseeing the state’s workforce training programs that legislators dissolved last year. NFIB testified in support of the Senate version of the bill as a step to improve efficiency and cut red tape.

SB 4 establishes a new Administrative Rules Oversight Committee with the authority to review any proposed agency rules where implementation and compliance costs are expected to exceed $500k.

SB 277, the IDEM agency bill, improves regulatory clarity and consistency while preserving existing environmental protection. The bill makes several technical updates across Indiana’s environmental statutes to streamline the environmental permitting process and curb regulatory overreach.

Taxes

Last year, NFIB worked hard to increase the business personal property (BPP) tax exemption from $80,000 to $2 million starting in the 2027 tax year. With this increase, nearly every Hoosier small business will be exempt from this onerous tax. Indiana legislators discussed undoing this huge tax relief during the 2026 session, which would have significantly reduced the number of small businesses that could benefit from this tax relief. NFIB worked diligently to ensure this small business tax exemption remained unchanged.

NFIB was the only organization that championed SB 259. This important piece of legislation removes unnecessary and burdensome reporting requirements for pass-through entities by eliminating the associated $500 penalty. This bill is awaiting the Governor’s signature and is estimated to save small businesses nearly $20 million annually.

NFIB was disappointed that the legislature failed to conform with the 20% Small Business Deduction in the One Big Beautiful Bill Act with the passage of SB 212. SB 243 is the other piece of legislation that addressed federal tax conformity. This bill would add one-year tax deductions on overtime and tip income, along with the interest on loans for U.S.-made vehicles — saving Hoosiers about $250 million. This bill is awaiting the Governor’s signature.

The legislation also takes aim at a penny shortage that began after the U.S. Mint ended production of the one-cent coin in November. Retailers and agencies have been handling cash transactions as they wish in the absence of a statewide policy. Retailers can choose to round up or down on transactions. Governments, meanwhile, would be required to round down. The rounding regime could cost the state millions in sales tax revenue, while agencies could lose thousands in earnings off fees, fines, and more. It would take effect in 2027.

NFIB worked with stakeholders and the sponsor of HB 1144, Tourism Improvement Districts, to allow for an opt-out option for small businesses. The bill allowed for the creation of a tourism improvement district at which point the businesses within the defined district will be assessed a fee (aka, special tax). The bill was amended into HB 1210 and was then stripped out, so the bill failed to pass.

HB 1210, the DLGF bill (aka, the Christmas tree bill), was approximately 700-pages in length and contained a hodgepodge of language taken from other bills at risk of dying, including a controversial provision that could encourage more local communities to approve data center projects, as well as a ban on Hamilton County’s rental cap ordinances.

If it becomes law, it will require data center companies that receive future sales tax exemptions to give at least 1% of their savings to local governments, but only on the sales tax of the power, not the equipment, which would’ve carried a heftier price tag and a much larger incentive for locals.

The most important provision in this bill allows small businesses structured as pass-through entities to claim a tax credit of up to $400 in the first year for employers that offer their employees a non-traditional health care plan known as an Individual Coverage Health Reimbursement Arrangement (ICHRA).

Health Care

HB 1271 would require hospitals to inform patients about assistance programs before sending their bill to collections. The bill also requires hospitals to proactively make information on financial assistance available to patients. The bill would also lock payments once medical bills are paid to prevent insurers from retroactively demanding reimbursement after paying claims, and prohibit insurers from using downcoding in specified manners. The bill is part of a broader effort to protect patients from the financial burden of medical debt and ensure fair billing practices in health care. While the intent is good, the approach may cause insurers to drive up premiums to recoup costs.

NFIB supported HB 1335, which set forth additional requirements for a nonprofit hospital’s community benefits plan. It would require a nonprofit hospital to spend more under the nonprofit hospital’s plan than the nonprofit hospital’s estimated tax exemption value, and it adds additional reporting requirements for a nonprofit hospital’s annual plan report. By requiring nonprofit hospitals to spend more on community benefits than they receive in tax exemptions, the bill ensures these entities provide a measurable return to the public. The bill died in the Senate.

Employment & Labor

HB 1177 will expand the state’s employer childcare tax credit for businesses that offer childcare options to their workers. The credit could be used to help pay for costs such as operating or contracting with a childcare facility, employee training, and higher wages for staff.

SB 76, the immigration bill, will require government entities, including schools, higher education institutions, jails, and hospitals, to comply with ICE. The bill will also create penalties for employers who knowingly or intentionally hire people who are in the country illegally. An employer’s license could be revoked, or their business could be required to shut down for several days.

Indiana lawmakers also sent HB 1200 targeting undocumented truck drivers to the governor’s desk. It would require anyone applying for a commercial driver’s license to demonstrate proficiency in the English language. Lacking proper documentation while driving a commercial vehicle would be considered a low-level felony. Any company that hires someone who lacks documentation could face a $50,000 fine.

Legal Reform

After working throughout the course of the session to position the Indiana business community for meaningful legal reform, HB 1417 created an interim commission to study legal reform issues and limited local government’s ability to bring public nuisance actions. However, both issues needed additional changes to be truly effective for the business community. Given those challenges, combined with a shortened session, a decision was made to pull the bill from the calendar this year. As a member of The Indiana Alliance for Legal Reform, NFIB is committed to continuing efforts during the interim to take a much stronger position heading into the 2027 session.