Indiana Local Income Tax Scoreboard: What Counties Have Actually Done in 2026

A common reading of SB 1 (Senate Enrolled Act 1-2025) is that it gave every county authority, starting July 1, 2025, to impose a 1.2% "replacement" local income tax (LIT). The Indiana Code does not support that. SEA 1's 1.2% rates belong to a new LIT structure, and House Enrolled Act 1210-2026 (P.L.157-2026) pushed its start to January 1, 2029. So no county has "imposed" or "declined" a replacement LIT, and a scoreboard sorted that way would be fiction.

What can be tracked is what counties have actually done under current law, and the negotiations HEA 1210 started for 2029. This is that scoreboard.

The rules counties are working under

Through December 31, 2028 (current law). A county may impose an expenditure rate of up to 2.5% (2.75% in Marion County) under IC 6-3.6-6-2, plus property tax relief rates of up to 1.25% under IC 6-3.6-5-6. SEA 1 added one new option: a homestead-relief rate of up to 0.3% under IC 6-3.6-6-3.1, which may not be imposed after December 31, 2028. Until July 1, 2028, counties that had a county option income tax or county economic development income tax in effect on January 1, 2015 adopt rates through a LIT council made up of the county council and each city and town council. Other counties adopt through the county council (IC 6-3.6-3-1). The LIT council provisions are repealed effective July 1, 2028.

From January 1, 2029 (new structure). The DLGF's July 17, 2026 memo says current LIT ordinances expire January 1, 2029, and counties and eligible municipalities may adopt new ordinances starting July 1, 2028. The county council becomes the sole county adopting body (in Marion County, the City-County Council). Its component rates total no more than 2.9%:

Up to 1.2% for county services
Up to 0.4% for fire protection and EMS providers
Up to 0.2% for nonmunicipal units such as townships
Those three together capped at 1.7%
Up to 1.2% for municipal services in towns that cannot or choose not to adopt their own rate

Cities and towns with 3,500 or more residents may impose their own rate of up to 1.2% "beginning after December 31, 2028" (IC 6-3.6-6-22). Property tax relief rates expire December 31, 2028 (IC 6-3.6-1-3(b); IC 6-3.6-5-7). A county's expenditure rate continues past 2028 only if the county adopts a renewal ordinance on or before October 1, 2028 (IC 6-3.6-3-4(c)).

Full mechanics are in our SB 1 LIT explainer and our explainer on the delayed overhaul.

The scoreboard

1. Rates: almost no changes in 2026

The DOR's Departmental Notice #1, effective October 1, 2026, lists every county's total LIT rate and marks any county whose rate changed since the January 1, 2026 notice. Only Boone County carries that mark; its rate is now 1.71%. Totals run from 0.5% in Porter County to 3.0% in Randolph County. Marion County is at 2.02%, the same rate Indianapolis's 2027 Proposed Budget Book shows for every year from 2023 through 2027.

2. Reshuffling components inside the same total

Some counties are moving revenue between current components ahead of 2029 without raising their total rate:

Marion County. For 2026, the LIT council shifted the property tax relief rate and part of the levy freeze rate into certified shares and public safety. An ordinance filed alongside the 2027 budget continues the shift. The total stays at 2.02% (2027 Proposed Budget Book). More in our Marion County LIT post.
Jay County. The council voted to move forward with raising its public safety rate from 0.25% to 0.35% and cutting its levy freeze rate from 0.2% to 0.1%. A public hearing is required before adoption (The Commercial Review).

3. Property tax relief rates that will end

The State Budget Agency's estimated 2027 certified distributions, certified October 1, 2026, show 56 of 92 counties with a property tax relief rate under IC 6-3.6-5. The highest are Fayette (1.12%), Morgan (1.002%), and Cass, Grant, and Lake (1.0% each). Those rates, and the property tax credits they fund, end December 31, 2028 unless the legislature changes the law. Residents of those counties have the most riding on what replaces them.

4. Homestead-relief LIT: no adoptions found

We found no county with the 0.3% homestead-relief rate. The SBA's 2027 certification has no column for a rate under IC 6-3.6-6-3.1. See our homestead-relief LIT explainer.

5. MUST taskforces

New IC 6-3.6-3-13 let each county, before October 1, 2026, convene a Municipal Unit Strategic Taskforce (MUST): one representative from the county council and the fiscal officer of each city and town. Its job is to reach a unanimous agreement on splitting the county-services and municipal-services rates. Fire/EMS and nonmunicipal units cannot sit on it. Any agreement goes to the DLGF, which must report all agreements to the Legislative Council before December 1, 2026. Counties we could verify moving to form one:

Jay County. The council appointed member Faron Parr and set a tentative first meeting for August 26 (The Commercial Review).
Shelby County. The council approved a service agreement with its financial consultant, Financial Solutions Group, to establish the MUST (Shelbyville News).
Lawrence County. The taskforce scheduled a meeting for August 28, 2026 and posted a baseline LIT analysis (City of Bedford).
Jefferson County. The council named Pam Crozier as its appointee, with the MUST meeting set for September 28 (Madison Courier).

This list is not complete. The DLGF's December report will be the first statewide record of which counties reached agreements.

What it means for residents

No new county LIT was added in 2026. If your county is not marked as changed in Departmental Notice #1, your county LIT rate is the same as it was in January.
Where you live is what counts, not where you work. An Indiana resident pays the rate of the county where they lived on January 1 (IC 6-3.6-2-13; IC 6-3.6-8-3(b)). DOR tells employers to withhold for the employee's county of residence as of January 1. Someone who lives in Hendricks County (1.7%) and works in Marion County (2.02%) pays Hendricks County's rate. Only people who live outside Indiana on January 1 pay the rate of the Indiana county where they work.
The real changes come in 2029. That is when relief rates end, municipal rates begin, and the 2.9% cap applies. Renters and higher-income households with modest homes have the most exposure to income tax increases. Owners in counties that rely on property tax relief rates could lose those credits.

What's coming

2027

The DLGF's MUST report goes to the Legislative Council before December 1, 2026, ahead of the 2027 session. Senate Tax and Fiscal Policy Chair Travis Holdman has asked counties, cities, and towns to "come up with a plan they would recommend to us" (Indiana Capital Chronicle via IPM).
Counties may still change current rates within the 2.5% (2.75% in Marion) expenditure cap and 1.25% relief cap.

2028

July 1, 2028: LIT councils are repealed, and the new adoption rules take effect.
October 1, 2028: deadline for a county to adopt an ordinance renewing its expenditure rate for 2029 (IC 6-3.6-3-4(c)).
December 31, 2028: property tax relief rates and the homestead-relief LIT end.

2029

The 2.9% structure applies. Cities and towns of 3,500 or more may impose their own rate of up to 1.2%.
The DLGF memo notes that distributions under the new structure begin in 2030.

How to check your specific county

Open the DOR's Departmental Notice #1, which lists every county's current rate.
Find your county of residence on January 1. That is the rate you pay. If you lived outside Indiana on January 1, use the county where you work.
Look for an asterisk, which marks a rate changed since the January notice.
Check the component split in the SBA's 2027 certified distribution estimates to see whether your county has a property tax relief rate scheduled to end after 2028.

If your withholding differs from the published rate, check with your employer; payroll systems sometimes lag rate updates by a pay cycle.

What to do

Confirm your LIT rate in Departmental Notice #1.
Find out whether your county formed a MUST. MUST meetings are subject to the Open Door Law, according to the DLGF. Our fall budget hearing guide covers how to follow local meetings.
Track the 2027 legislative session, which may change the 2029 structure again.
Plan for 2029, when relief rates end and municipal rates begin.