SB 184

                                                              Introduced Version
           SENATE BILL No. 184
                 _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-2.5-2.
Synopsis: Sales tax on utility service. Phases down in equal reductions
over four years the state gross retail tax rate imposed on the sale of the
following utility services to a person for domestic consumption: (1)
Electrical energy. (2) Natural or artificial gas. (3) Water. (4) Steam. (5)
Steam heating service.
Effective: July 1, 2026.
                             Young M
   January 5, 2026, read first time and referred to Committee on Utilities.
2026  IN 184—LS 6448/DI 129
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   SENATE BILL No. 184
    A BILL FOR AN ACT to amend the Indiana Code concerning
 taxation.
     Be it enacted by the General Assembly of the State of Indiana:
1    SECTION 1. IC 6-2.5-2-2, AS AMENDED BY P.L.146-2020,
2 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 2. (a) The state gross retail tax is measured by the
4 gross retail income received by a retail merchant in a retail unitary or
5 bundled transaction and, except as provided in subsection (c), is
6 imposed at seven percent (7%) of that gross retail income.
7    (b) For purposes of subsection (c), "utility service" means the
8 provision of any of the following to a person for domestic
9 consumption:
10      (1) Electrical energy.
11      (2) Natural or artificial gas.
12      (3) Water.
13      (4) Steam.
14      (5) Steam heating service.
15 The term includes utility service provided by a power subsidiary
16 or a public utility.
17    (c) The state gross retail tax rate on the sale of utility service to
 2026  IN 184—LS 6448/DI 129
                                    2
1 a person for domestic consumption is equal to the following:
2(1) For a transaction occurring before July 1, 2027, the tax
3rate is imposed at seven percent (7%) of the gross retail
4income.
5(2) For a transaction occurring after June 30, 2027, and
6before July 1, 2028, the tax rate is imposed at five and
7twenty-five hundredths percent (5.25%) of the gross retail
8income.
9(3) For a transaction occurring after June 30, 2028, and
10before July 1, 2029, the tax rate is imposed at three and
11five-tenths percent (3.5%) of the gross retail income.
12(4) For a transaction occurring after June 30, 2029, and
13before July 1, 2030, the tax rate is imposed at one and
14seventy-five hundredths percent (1.75%) of the gross retail
15income.
16(5) For a transaction occurring after June 30, 2030, no state
17gross retail tax is imposed on the transaction.
18    (b) (d) If the tax computed under subsection (a) or (c) carried to the
19 third decimal place results in the numeral in the third decimal place
20 being greater than four (4), the amount of the tax shall be rounded to
21 the next additional cent.
22    (c) (e) A seller may elect to round the tax under subsection (b) (d)
23 on a transaction on an item basis or an invoice basis. However, a seller
24 may not round the tax under subsection (b) (d) to circumvent the tax
25 that would otherwise be imposed on a transaction using an invoice
26 basis.
27    SECTION 2. IC 6-2.5-2-6 IS ADDED TO THE INDIANA CODE
28 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
29 1, 2026]: Sec. 6. (a) The legislative services agency shall prepare
30 legislation for introduction during the 2030 regular session of the
31 general assembly to make any necessary changes to the Indiana
32 Code to conform to the amendments made to section 2 of this
33 chapter in the 2026 session of the general assembly.
34    (b) This section expires December 31, 2030.
 2026  IN 184—LS 6448/DI 129