Indiana just executed the biggest small-business tax reform since 2015, and the number of operators who even noticed is embarrassingly small. The business personal property (BPP) exemption threshold jumped from $80,000 to $2,000,000 with the January 1, 2026 assessment. For the vast majority of Indiana LLCs, S-corps, landlords, and sole proprietors, the BPP tax is effectively gone.
Two things to know: most of you owe nothing now, and you still have to file Form 103 by May 15, 2026 to claim it.
What changed
Two bills moving together — Senate Enrolled Act 1 (SEA 1) and House Enrolled Act 1427 (HEA 1427) — raised the BPP exemption threshold from $80K to $2M as part of the broader SB 1 property tax reform package. The rationale was straightforward: the old $80K threshold caught too many small operators (every decently-equipped coffee shop, every landlord with a dozen furnished rentals, every light manufacturer) and was generating enough assessor labor that the revenue-to-overhead ratio had gotten silly.
New rule, effective for the assessment of January 1, 2026 (taxes payable 2027):
- If your total Indiana BPP is ≤ $80,000 — file the short form, owe nothing (unchanged).
- If your total Indiana BPP is $80,001 to $2,000,000 — file Form 103, owe nothing. (This is new.)
- If your total Indiana BPP is > $2,000,000 — file Form 103-Long, owe the standard BPP tax.
What counts as "business personal property"
If you run any business in Indiana, you probably have more BPP than you think. Indiana's definition is broad:
- Equipment — machinery, tools, computers, POS systems, office furniture
- Fixtures — anything attached to real estate you don't own (leasehold improvements, attached signage)
- Inventory — stock on hand on January 1 of the assessment year (not exempt except for certain raw materials)
- Supplies — maintenance, office, and operating supplies
Specifically not BPP: the real estate itself (that's handled separately on your parcel assessment), licensed vehicles (that's BMV), or intangibles (goodwill, patents, brands).
How landlords and short-term rental operators benefit
This is the quietly huge change nobody's writing about. Under the old $80K threshold:
- A small furnished rental LLC with 4–6 properties at $15K–$25K of furniture and appliances each easily cleared $80K in aggregate BPP — and had to file Form 103-Long, report item by item, and pay the tax.
- A short-term rental host with a mid-size Airbnb portfolio (think Indianapolis lake country, Brown County cabins) frequently cleared $200K in aggregate BPP when kitchens, linens, bikes, hot tubs, and electronics all got counted.
- A small landscaping contractor with trucks, trailers, mowers, and tools? $150K–$400K in BPP was normal.
Under the new $2M threshold, all three operators file the short form, tick a box confirming they're under $2M, and owe zero. That's it.
Filing mechanics: May 15, 2026 deadline
The exemption is not automatic. You still file a return.
- Form 103-Short — for anyone under $2M. One page. You certify total BPP is under threshold, sign, done.
- Form 103-Long — required only if BPP exceeds $2M. Itemized listing, depreciation schedules, the whole thing.
- Form 104 — Supporting personal property assessment (filed alongside 103 in most counties).
Filing location: the assessor in each Indiana county where you have BPP. If your LLC operates properties across Marion, Hamilton, and Boone counties, you file three returns. Filing deadline is May 15, 2026, same as real property's Form 130 petition window.
Late filing penalty: $25 per late return, plus a potential 25% penalty on the underlying tax if you're over the exemption. For most readers under $2M, the worst case is the $25.
What the "Not Over $80K" checkbox becomes
Indiana's old Form 103-Short had a famous checkbox: "Total assessed value of personal property is less than $80,000." Checking it exempted you. In the 2026 form revision, DLGF updated the certification line:
"I certify that the total depreciable personal property of this taxpayer in this county is less than $2,000,000 for the assessment date."
Physically it's the same one-line certification. Substantively, it now covers something like 98% of Indiana businesses by count.
County-level gotchas to watch for
The state exempts. Counties can still impose local personal property replacement taxes to backfill school and library revenue. These are small in dollar terms — typically a few basis points — but they exist in some high-density counties. Watch for:
- Marion County local option replacement fees on BPP filings
- Lake County school-corporation-level personal property levies
- Any county with 2025 budget shortfalls that needed emergency financing
Your county treasurer's office will tell you if there's a replacement fee. Most readers will find none.
What to do if you filed under the old assumptions last year
If your 2025 Form 103 was filed and paid under the old rules — even when your BPP was above $80K but below $2M — there's no retroactive relief. The exemption applies to the 2026 assessment forward. Your 2024 and 2025 filings stand as filed.
Going forward: file Form 103-Short by May 15, 2026, check the new $2M certification box, keep records of your BPP inventory as of 1/1/26 in case you're audited, and move on.
Why this matters beyond the tax savings
For landlords specifically, the BPP exemption change is part of a broader shift. Combined with the $300 homestead credit for owner-occupied housing and the local income tax replacement authority counties received in 2025, Indiana's residential tax structure is moving toward "real estate only" — personal property, income, and circuit-breaker mechanics are absorbing the revenue load that BPP used to carry.
For small-business operators looking at Indiana rental property strategy, the effect is that Indiana's tax overhead per furnished unit dropped meaningfully in 2026 compared to neighboring states. Factor that into any cap-rate model you're running.
Bottom line
Check your 2026 Form 103 filing. If your Indiana BPP is under $2M (statistically, it is), file the short form, check the new certification box, and stop worrying about BPP. It's the cleanest small-business tax change Indiana has passed in a decade.
If you also own real estate in Indiana and are dealing with the residential side of the 2026 cycle, our property tax analysis covers assessment, appeal evidence, and the full May 10 installment interaction with pending Form 130 appeals.