Indiana Lawmakers Want to Eliminate Property Taxes
When I was a little kid, I loved the Disney classic Robin Hood. Everything about it was magic. If you aren't familiar with this well-known story, when King Richard goes to fight in the Crusades, his younger brother Prince John is left in charge of the country. Instead of leading it like he should, he uses the Sheriff of Nottingham to tax the people to death. But enter our hero, the daring fox Robin Hood, and his loyal bear companion Little John. The pair find funny ways to steal the tax money back from Prince John and give it to the poor.
I never thought that classic story would have much bearing on my life. But then I became an adult and realized just how much we are taxed.
We are taxed when we earn money.
We are taxed when we are gifted money.
We are taxed when we buy something.
We are taxed when we sell something.
We are taxed on things that we own.
Heck, some estates are even taxed after we die.
And we're taxed by our country, state, and local governments.
I understand we need taxes for road maintenance, schools, salaries, and other community essentials, but the amount of government waste and abuse is astounding. I won't go into specifics, but I have thoughts about a few purchases by individuals in our state and federal governments who are supposed to be civil servants.
Indiana Property Taxes Continue to Rise
As if paying taxes wasn't enough, the amount many Indiana homeowners pay in property taxes is increasing, too.
According to the Indiana Capital Chronicle, "Gross assessed values for commercial, industrial and residential properties collectively rose nearly 10% across Indiana from 2025 to 2026 in the latest state data, less than the 19% jump recorded between 2024 and 2025. Residential properties make up more than three-quarters of the assessed value in the state comparison."
Indiana Lawmaker Proposes Replacing Property Taxes With a Service Tax
Republican State Rep. J.D. Prescott is working on a proposal to eliminate property taxes and replace them with a tax on services, which is one of the few types of transactions that generally isn't taxed today.
Things like haircuts, landscaping, attorney fees, and other services would be charged a 7% service tax if the plan goes through, although there would be exemptions for things like nonprofit services and healthcare.
At first glance, that sounds like a great deal for homeowners. But according to Prescott, the change would actually generate more revenue than the current property tax system, which means that additional money has to come from somewhere.
According to Prescott, Indiana residents are expected to pay about $10.6 billion in property taxes next year, but experts estimate a statewide service tax could generate between $13 billion and $15 billion annually.
The average Hoosier will spend $1800 to $2200 on service tax. Multiply that by the people in your household, and that can add a significant chunk of change.
Taxes on consumer services, such as haircuts and gym memberships, would come directly from households. Taxes on business services, such as software, advertising, and equipment maintenance, could also increase operating costs. Many small businesses are already grappling with higher energy costs, wages, and other expenses, and most businesses would likely pass at least some of those added costs on to consumers.
Some states exempt business-to-business services to avoid "tax pyramiding," where the same value is taxed multiple times before reaching the consumer.
When Would Indiana Eliminate Property Taxes?
The proposal targets July 1, 2028, for the new service tax to begin, with property taxes being phased out at the end of 2028. That means there would be a six-month period where both systems would overlap.
Because, of course...
Source: WDRB
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