Senate committee advances SB 212 to adopt select federal tax changes, declines accelerated depreciation

A state Senate committee advanced Senate Bill 212 on a party-line committee vote, moving the tax-conformity measure to the floor after a 11'2 roll call.

Chair opened the hearing by describing SB 212 as an "immediate fix" to clarify filing rules for the current season and said the bill would adopt several provisions of the federal HR 1 that affect tax year 2025 filings. He listed specific federal sections proposed for conformity and said the committee's plan was to pass the bill out of committee and seek final action before the end of the month.

Why it matters: The bill would align state rules with several federal changes that affect taxpayers this year, while excluding at least one provision that state analysts say would produce materially larger revenue losses.

Testimony and stakeholder requests: Sam Sharon, testifying for the Indiana Manufacturers Association, said the IMA was "not generally opposed to the language in the introduced version of the bill" but urged the legislature to couple additional pro-manufacturing federal provisions with the state code. "The IMA supports fully coupling with the QPP deduction," Sharon said, and recommended raising the state cap for the Section 179 small-business deduction from the current $25,000 to at least $50,000. He also said the association supports the state's continued decoupling from recent federal R&D (section 174) changes because, he said, state statute is more taxpayer-friendly.

Committee debate and amendments: Senator Cadore said he supported adoption of the bill's adoption-credit and telehealth provisions but announced two amendments he plans to offer on second reading. The first would eliminate taxes on utilities to deliver what he said could be "$300 to $600 annually" in relief to affected households; the second would roll back parts of House Bill 1601 that, he said, provide data centers with up to 50-year tax credits. Cadore cited constituent hardship, including disconnection notices, and a projected nearly $5 billion surplus by fiscal 2027 as reasons to pursue relief.

Senator Baldwin pushed back on the scale of potential relief versus cost, saying it was "estimated to be upwards of... $1,000,000,000 dollars over the biennium" in lost revenue and arguing the state must prioritize growing Medicaid costs. Baldwin also defended some targeted incentives as economic drivers and raised concerns about the net fiscal effect of broad utility-tax elimination.

Data center concerns: Members debated how long-term incentives for data centers can affect local utilities, transparency around local abatements and the scale of local impacts such as large water withdrawals. Cadore said communities have been "angry" at the pace and scale of some projects and pushed for more transparency and shorter recertification timelines rather than permanent, multi-decade credits.

Vote and next steps: After discussion the committee voted to advance SB 212 to the floor with an 11'2 vote; the chair announced the motion carried and said the bill will proceed to second and third reading next week before moving to the House. No committee amendments were adopted at this meeting.

Procedural note: The chair said a broader Department of Revenue bill addressing an additional 37 conformity provisions will be filed in two weeks, giving stakeholders an additional opportunity to seek changes on related items.