In 2026, Indiana's data center fight moved out of Indianapolis and into county courthouses. Some local governments kept approving decades-long breaks on data center equipment. Others shut the door: by September 9, 2026, Indiana University's Environmental Resilience Institute counted 25 of Indiana's 92 counties with data center moratoriums and three with outright bans, according to The Bond Buyer.
For property owners, the key fact is this: the state sales tax break costs the state, while property tax breaks are local choices that decide how much of a data center's value reaches your county's tax base. The LEAP and hyperscaler assessment backdrop and Marion County's southside abatement fight are covered separately.
Where Indiana Counties Voted on Data Centers in 2026
- Hobart (Lake County). On January 7, the city council voted 6-0 for Amazon's data center deal: a 10-year, 100% real property abatement and a 35-year, 100% exemption on IT equipment, per WGN. Amazon's community payments total more than $175 million over construction, starting with $47 million upfront (The Times). A resident has sued, arguing the site does not qualify as an economic revitalization area (Fox 32).
- LaPorte. In March, Microsoft gave up the 100% personal property abatement it won in 2024. The 2024 deal would have paid up to $100 million over 40 years; now Microsoft pays full property taxes, with 15% to LaPorte Community Schools for 20 years (WVPE).
- St. Joseph County. Amazon's New Carlisle abatement was valued at $4 billion over 35 years. In March, four council Republicans wrote to Amazon asking it to renegotiate, pointing to Microsoft's reversal (WVPE). Microsoft says it is not seeking a break for its Granger project.
- Boone County. Meta started building its $10 billion LEAP campus in February under incentives Lebanon approved in November 2024: a 10-year, 50% real property abatement and a 35-year full personal property abatement (IBJ via Daily Journal). On June 15, county commissioners unanimously adopted a one-year moratorium on new data centers in unincorporated areas, through June 15, 2027 (WRTV). See our Boone County LEAP post.
- Madison County. Commissioners unanimously passed a six-month moratorium with no data center application pending (Indiana Public Radio).
- Switzerland County passed a one-year moratorium on August 31 (Bond Buyer).
Even Gov. Braun told WTWO, "don't ask for tax abatements"; his office later said locals should "evaluate whether tax abatements are necessary" (Bond Buyer).
The State Sales Tax Exemption (IC 6-2.5-15)
Under IC 6-2.5-15, the IEDC can certify a "qualified data center." It must meet a minimum investment within five years: $150 million in counties over 100,000 people, $100 million in counties of 50,001 to 100,000, and $25 million in smaller counties (IC 6-2.5-15-10). Certified purchases of "data center equipment" are exempt from the 7% sales tax (IC 6-2.5-15-16). That covers servers, cooling, substations, generators, software, and the electricity the equipment uses (IC 6-2.5-15-2). Certificates run up to 25 years, or 50 years for investments of $750 million or more (IC 6-2.5-15-14).
HEA 1210-2026 (P.L.157-2026) added IC 6-2.5-15-15.5. For data centers permitted and certified after June 30, 2026, the operator must pay the host county or city "not more than" 1% of the sales tax it avoids on electricity. Hypothetically, on a $500 million power bill, the avoided tax is $35 million (7%), and 1% of that is $350,000 a year.
How Data Center Personal Property Is Assessed and Abated
A data center's equipment is business personal property, self-reported on Form 103. The $2 million exemption under IC 6-1.1-3-7.2(d) does nothing at hyperscale. The 30% depreciation floor in IC 6-1.1-3-29 no longer applies to equipment placed in service after January 1, 2025. The exception is equipment in a TIF area whose base was set before 2025. Our BPP paradox post explains why that change can cut both ways.
Local governments have two tools to reduce that equipment value further:
- Enterprise IT equipment exemption, IC 6-1.1-10-44. A county council (for unincorporated land) or a city or town council can exempt servers, routers, enterprise networking gear, and backup power equipment. The business must invest at least $25 million and pay at least 125% of the county's average wage. The statute sets no maximum term: "the agreement must specify the duration." City documents describe Hobart's deal as a "35 year enterprise IT exemption" (Fox 32).
- Personal property abatement, IC 6-1.1-12.1. Abatement schedules are capped at 10 years (IC 6-1.1-12.1-17). Enhanced schedules for new business personal property can run up to 20 years, with a required compliance hearing after year 10 (IC 6-1.1-12.1-18).
The Net Effect on County Tax Bases and Homeowners' Bills
Operating levies grow by the maximum levy growth quotient, tied to personal income, not assessed value (IC 6-1.1-18.5-2; see our levy growth explainer). So new taxable value mostly lowers rates rather than raising more money:
- Taxable data center value lowers rates for everyone else. A lower rate means smaller bills for homeowners below their cap and fewer circuit breaker losses for local units.
- Exempt or abated value does nothing for the rate. It stays out of net assessed value. Meanwhile the campus still uses roads, fire service, and water. The data center's own bill is capped at 3% of gross assessed value under IC 6-1.1-20.6. Homesteads are capped at 1%.
- In a TIF district, the new value is captured. If the campus sits in a TIF area, taxes on the incremental value go to the redevelopment commission instead of lowering rates until the district expires. See our TIF explainer.
Warning
Community payments are not property taxes. Hobart's $47 million goes where the agreement directs, and it lowers no one's tax rate unless city officials choose to use it that way.
What Property Owners Near a Proposed Data Center Should Do
- Find the decision-maker. IT equipment exemptions go to the county council (unincorporated land) or the city or town council. Rezoning is a separate vote. Marion County's rules are in our zoning ordinance post.
- Ask four things: the length of the personal property exemption, whether the site is in a TIF area, how big the community payment is and where it goes, and whether an IC 6-2.5-15-15.5 electricity payment applies.
- Watch the rate. Our county tax rate rankings show where your district stands.
- Check your own assessment. Run your parcel through property lookup. If it is high, our appeal guide and tax appeal service can help.