The 2025 Indiana General Assembly was one of the more consequential sessions in recent memory for small and medium-sized businesses. Among the more than 240 bills signed into law by Governor Mike Braun, two deserve particular attention from business owners: a landmark property tax relief measure and a new employee leave requirement for working parents. Together, they illustrate the dual nature of the legislative session — delivering meaningful financial relief on one hand while imposing new workplace obligations on the other.
Senate Bill 1: A Major Win on Property Taxes
For many small business owners, the business personal property tax has long been a source of frustration. Unlike real estate, which at least holds or appreciates in value, equipment, machinery, and fixtures steadily lose value over time — yet Indiana’s tax code historically prevented that depreciation from being fully reflected in assessed values. Under the old rules, no matter how worn or obsolete a piece of equipment became, its assessed value could never fall below 30% of its original acquisition cost. Senate Bill 1 changes that.
Effective for property placed in service after January 1, 2025, the 30% depreciation floor has been eliminated. Businesses can now depreciate personal property down to its true market value, which in practical terms means significantly lower assessed values — and lower tax bills — for aging equipment and fixtures. For businesses that have been carrying older assets on their books, the savings could be substantial.
The legislation also dramatically expands the personal property tax exemption itself. Beginning in 2026, the exemption threshold rises to $2 million, meaning a large number of small businesses will owe little or nothing in personal property tax at all. This is a significant departure from the previous structure and represents one of the more impactful tax changes for small business in Indiana in years.
There is one important exception to keep in mind. Property located within a Tax Increment Financing (TIF) district remains subject to the old 30% floor, so businesses operating in or near TIF districts should not assume the new depreciation rules apply without first confirming their status. For everyone else, a conversation with your accountant about your current personal property tax filings is well worth having sooner rather than later.
Senate Bill 409: A New Leave Right for Working Parents
On the employment side, Senate Bill 409 — which took effect July 1, 2025 — creates a new, albeit modest, leave entitlement for employees who are parents or guardians of school-age children. The law requires all Indiana employers, regardless of size, to permit eligible employees to take one unpaid day of leave per year to attend certain school-related meetings on behalf of their child.
The qualifying meetings are fairly specific: leave may be taken for meetings related to the child’s attendance issues or for Individualized Education Program (IEP) meetings, which are formal planning sessions held for students receiving special education services. This is not a broad personal leave law — it is targeted at a narrow but meaningful category of parental involvement.
From an employer’s perspective, the administrative requirements are straightforward. An employee who wishes to use this leave must provide at least five days’ advance notice, and employers retain the right to impose reasonable limitations on how and when the time is taken. That said, the obligation itself is real: failing to accommodate a valid request, or taking adverse action against an employee who exercises this right, could expose a business to legal liability.
The legislature built a sunset provision into the law, meaning it will automatically expire in four years unless extended. Whether that reflects a trial-period approach or simply legislative caution remains to be seen, but for now employers should treat this as a binding requirement and ensure their employee handbooks and management practices reflect it.
This post is for informational purposes only and may not apply to your specific situation. if you have questions about this topic and how it might relate to your business, contact Lorch Naville Ward LLC.