Article

Understanding the impact of SEA 1 and HEA 1427 on Indiana Business Personal Property (BPP)

May 7, 2025 · Authored by Matt Eckerle

The Indiana Department of Local Government Finance (DLGF) defines “Business Personal Property” (BPP) as “equipment used in the production of income or held as an investment; billboards; foundations for the equipment; and all other tangible property other than real property.”

Senate Enrolled Act (SEA) 1 and House Enrolled Act (HEA) 1427 both implement changes to how BPP is assessed in Indiana. These legislative changes to BPP assessments including increased de minimis exemption and removal of the depreciation floor, will significantly impact taxpayers and taxing units.

Changes to BPP assessments

SEA 1, which was subsequently updated in some respects by HEA 1427, made the following changes to BPP assessments:

Increased the current de minimis exemption: SEA 1 increased the current de minimis exemption from BPP assessment and taxation from a total acquisition cost of $80,000 to a total acquisition cost of $2,000,000 beginning with the January 1, 2026, assessment date.
Remove of the current 30% depreciation floor: The current 30% “depreciation floor” for the assessment of all BPP placed in service after January 1, 2025, will be removed. However, here is an exception to this change if the BPP is located within a tax increment allocation area (TIF Area) established prior to January 1, 2025.