The Indiana General Assembly has concluded its 2026 session, resulting in several legislative changes that will affect small businesses across the state. Key measures addressed topics such as energy policy, regulatory reform, tax law adjustments, health care billing practices, employment rules, and legal reform.
Among the most discussed developments was legislation paving the way for the Chicago Bears to potentially relocate to Hammond through a Stadium Authority bill. Lawmakers also approved a measure allowing the leader of the Indiana National Guard to establish a military police unit with full police powers. Other notable bills included provisions enabling misdemeanor charges for people sleeping on public streets and authorizing police to make arrests under certain emergency detention circumstances.
In response to recent incidents involving minors and social media, legislators passed restrictions on minors’ use of social media platforms and implemented a ban on cell phone use during school hours. The state’s growing Medicaid budget prompted lawmakers to pass changes affecting long-term care services. Additionally, approval was given for establishing a casino in northeast Indiana after considerable debate among local senators.
Energy-related legislation requires utilities to offer low-income assistance programs and shifts toward performance-based ratemaking instead of traditional cost-of-service models. The Indiana Utility Regulatory Commission is set to review energy affordability issues soon.
Regulatory reforms included HB 1001, which aimed to increase housing supply by easing local permitting regulations but was modified by the Senate to allow towns more autonomy. Another bill initially proposed eliminating numerous boards and commissions; amendments reduced this number and delayed eliminations until July 2027 while reinstating oversight for workforce training programs.
SB 4 established an Administrative Rules Oversight Committee empowered to review costly agency rules. SB 277 introduced updates intended to clarify environmental regulations and streamline permitting processes.
On tax matters, previous efforts had increased the business personal property tax exemption from $80,000 to $2 million beginning in 2027—a move preserved despite attempts at reversal during this session. Legislation removing burdensome reporting requirements for pass-through entities is expected to save small businesses nearly $20 million annually if signed into law.
While lawmakers did not adopt federal conformity with a proposed 20% Small Business Deduction (as part of SB 212), another bill would introduce temporary deductions related to overtime pay, tip income, and loan interest for U.S.-made vehicles—potentially saving residents about $250 million if enacted.
The end of penny production by the U.S. Mint led lawmakers to address rounding policies for cash transactions: retailers may round up or down while government agencies must round down starting in 2027—a change that could reduce sales tax revenue and agency earnings.
A proposal allowing creation of tourism improvement districts with opt-out options for small businesses failed after being removed from broader legislation late in session. Meanwhile, new rules could require data center companies receiving future sales tax exemptions on power usage (but not equipment) to share some savings with local governments if enacted.
Another provision allows small businesses organized as pass-through entities offering Individual Coverage Health Reimbursement Arrangements (ICHRA) plans a first-year tax credit up to $400 per employee.
In health care policy, hospitals would be required under HB 1271 (if signed) to inform patients about financial assistance before sending bills to collections and prevent insurers from retroactively demanding reimbursement after claims are paid. The intent is consumer protection against medical debt burdens; however, there are concerns insurers might offset costs by raising premiums.
NFIB supported additional requirements for nonprofit hospitals’ community benefit spending but noted that related legislation did not advance past the Senate this year.
Employment measures included expanding employer childcare tax credits through HB 1177—covering costs like facility operations or staff wages—and stricter immigration compliance via SB 76. This latter bill introduces penalties for employers knowingly hiring undocumented workers; violations could result in license revocation or temporary business closure.
Further immigration-related legislation requires commercial driver’s license applicants prove English proficiency; driving without proper documentation becomes a felony offense subjecting employers who hire undocumented drivers to fines up to $50,000 per violation if enacted into law.
Efforts toward legal reform resulted in HB 1417 creating an interim commission on legal issues but stopped short of comprehensive changes sought by business groups due partly to time constraints this session. According to NFIB: “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.”
Small business owners are encouraged by NFIB representatives such as Gwen Turner and Natalie Robinson “to join us on March 13th for an end of session webinar.”
