Indiana Data Center Assessments 2026: LEAP, AWS, and the Hyperscaler Tax Question

Indiana has emerged in the last five years as one of the leading Midwest data center destinations. The LEAP district in Boone County (Lilly's R&D campus and adjacent data center sites), Amazon's New Carlisle campus in St. Joseph County, Google's south-suburban activity, and a wave of smaller hyperscaler builds in central Indiana represent billions of dollars of new tax base for the host counties.

The catch: data centers are unusual property tax citizens. Their AV is dominated by personal property (servers, network gear, racks, cooling, electrical infrastructure) more than real property (the building itself). The assessment treatment of these facilities — and the abatements they receive — is novel, politically contested, and being actively litigated through 2026 and beyond.

Why data center assessments are different

A traditional warehouse: $10–$30M real property AV, modest personal property (forklifts, racking, computers).

A hyperscaler data center of the same square footage: $50–$200M+ real property AV (specialized building, raised floors, redundant power, fire suppression) plus $300M–$1B+ personal property AV (servers, network equipment, UPS systems, cooling infrastructure).

The personal property tail is the story. Indiana taxes personal property (machinery, equipment, etc.) — but with a complex schedule of depreciation, classification, and exemptions. SB 1 raised the general business personal property exemption to $2M for 2026, but data centers vastly exceed that threshold and pay personal property tax on their massive equipment investments.

The abatement question

Most Indiana data center deals have included substantial tax abatements as part of the site selection package:

Personal property abatement — typically 10-year phase-down on the equipment component
Real property abatement — typically 10-year phase-down on the building
Designated economic development area — local government action establishing the abatement framework

The abatements are negotiated parcel by parcel through the host county's economic development authority and approved by the County Council. Different counties have different appetites for abatement depth:

Boone County (LEAP) — substantial abatements approved, multi-year phased
St. Joseph County (AWS New Carlisle) — multi-year abatements approved
Hendricks, Hamilton, Marion — generally less aggressive on data center abatement
Smaller rural counties — varies; some have offered very deep abatements as economic development incentive

The political tension: abatements are how Indiana wins data center deals against competing states (Virginia, Ohio, North Carolina, Iowa). Without abatements, Indiana likely loses the deals. But abated AV is, by definition, AV not currently paying its full share of local taxes.

Note

Abatement is time-limited, not permanent. A 10-year abatement at full 100% in year 1 phases down such that by year 10–11, the facility is fully on the tax rolls. The political question is what to do at year 11 if the facility threatens to relocate without a renewal.

What hyperscalers actually pay

A representative hyperscaler campus year-by-year tax profile (illustrative numbers):

Year	Real property AV	Personal property AV	Abatement %	Effective tax	Notes
1	$150M	$400M	100% / 100%	~$0	Full abatement, construction completing
3	$180M	$800M	80% / 80%	~$1.5M	Operations ramping
5	$200M	$1.2B	50% / 50%	~$8M	Mid-phase
7	$200M	$1.5B	30% / 30%	~$15M	Phase-down continuing
10	$200M	$1.8B	10% / 10%	~$30M	Near full taxation
11+	$200M	$1.8B + ongoing capex	0% / 0%	$35M+	Full tax base

By year 11+, a single hyperscaler campus represents $35M+ in annual tax revenue to the host county, city, school district, and overlapping taxing units. That's significant — frequently the largest single taxpayer in the county.

The LEAP district specifics

The LEAP (Limitless Exploration / Advanced Pace) district in Boone County is the highest-profile Indiana economic development project, anchored by Lilly's $9B+ R&D campus. Adjacent to the Lilly campus, multiple data center sites have been announced or are under construction.

LEAP-area data center assessments will:

Be phased on the standard 10-year schedule
Pay meaningful tax by years 5–7 of operation
Reach full-tax status in the early-to-mid 2030s for the first wave of facilities
Continue to grow as later phases come online through 2030

LEAP is also significant because it required substantial infrastructure investment — water, sewer, electrical — that's being funded through a combination of state, local, and private financing. The infrastructure cost is partly justified by the projected tax revenue once abatements fully wind down.

The personal property valuation question

The bigger 2026 question for data centers isn't whether they pay — they do, on the schedule — but how their personal property is valued.

Indiana personal property is reported on Form 103 by the taxpayer, who assigns assets to depreciation classifications. The categories matter:

Pool 1 (3-year life) — generally office equipment, computers in a traditional business
Pool 2 (5-year life) — most computer equipment, including servers
Pool 3 (10-year life) — production machinery, equipment with longer useful life
Pool 4 (15-year life) — heavy industrial equipment

How a hyperscaler classifies its $400M+ of server gear, network equipment, cooling, and electrical infrastructure determines the assessed value. Servers in Pool 2 (5-year life) depreciate to floor value (currently 30% of cost for assets placed in service before 2025; eliminated for assets after 2025 under SB 1) much faster than equipment in Pool 3 or Pool 4.

The 30% floor elimination from SB 1 is critical: assets placed in service after January 1, 2025 depreciate to true cost-less-depreciation rather than the historical 30% floor. For data centers continuously refreshing equipment, this means higher assessments on newer equipment than the prior regime would have produced. Counter-intuitively, the same SB 1 that benefits small businesses (raising the $2M exemption) raises assessments for hyperscale data centers.

What counties are doing about valuation disputes

Several Indiana counties have hired specialized appraisers to assess data center personal property:

Independent third-party appraisal — counties contract with firms specializing in IT asset valuation to verify the taxpayer's Form 103 classifications
Reclassification disputes — counties may challenge a taxpayer's Pool 2 vs. Pool 3 assignments
Audits of cost basis — counties verify that reported acquisition cost matches actual

These disputes can run to tens of millions of dollars of AV per facility. PTABOA hearings on data center assessments are increasingly common and increasingly technical.

The bigger policy question

Beyond the parcel-level mechanics, Indiana faces a strategic policy question for the 2027 legislative session: should the state's approach to data center assessment and abatement be standardized, or left to county-by-county negotiation?

Arguments for standardization:

Levels the field across counties
Reduces "race to the bottom" abatement competition between Indiana counties
Predictability for taxpayers

Arguments against:

Counties lose flexibility to compete with out-of-state alternatives
Local control is the bedrock of Indiana's economic development model
Standardization is hard given how unique each project is

The 2027 interim study committee on property tax assessment is likely to address some of these questions, though data center specifics may end up in a separate workgroup.

What to watch through 2027

Boone County LEAP build-out — additional data center announcements adjacent to Lilly
St. Joseph AWS expansion — phase 2 and 3 build-out
Google and other hyperscaler activity — south-suburban and central Indiana
Personal property valuation cases — at PTABOA and IBTR; will set precedent for future disputes
Abatement renewal decisions — first-wave data center abatements approach renewal questions in 2027–2030

What to do

If you're in a host county, watch your county's data center tax revenue projections. By years 5–7 of operations, data centers are meaningful tax contributors.
If you're a hyperscaler tax professional, model the personal property valuation under SB 1's 30% floor elimination — your effective AV on post-2025 equipment is materially higher than prior-regime math suggests.
If you're a local property owner near a data center, the abatement schedule on your neighbor matters for your tax rate over time as the AV comes online.
If you're evaluating a data center investment, the after-abatement tax expense is a significant pro forma input. Don't model based on year-1 abated taxes; model on year-11 fully-taxed taxes.