Indianapolis Small Businesses: You Still File Form 103/104 Under the $2M Exemption

There is a piece of good news for Indianapolis small businesses and a trap hiding right next to it. The good news: effective January 1, 2026, the business personal property (BPP) exemption threshold rose from $80,000 to $2,000,000 of acquisition cost per county. Most small businesses now owe zero BPP tax. The trap: you still have to file the return. Exempt does not mean excused.

This post explains the per-county test, who qualifies, the still-must-file rule, the penalty for skipping it, and exactly which forms you submit.

What changed in 2026

For years the BPP exemption sat at $80,000 of acquisition cost. As of the January 1, 2026 assessment, that threshold is $2,000,000 per county. If the total acquisition cost of your business personal property within a single county is under $2 million, no BPP tax is owed for that county.

For the typical Indianapolis small business - a shop, an office, a small services firm - this almost certainly means a $0 tax bill on equipment, furniture, and fixtures. But the obligation to file the return did not go away.

The acquisition-cost-per-county test

The threshold is measured by acquisition cost - what you originally paid for the property - not current market or depreciated value. And it is measured per county, not statewide.

If your total acquisition cost in Marion County is under $2,000,000, you qualify for the exemption in Marion County.
If you operate in multiple counties, you apply the test separately in each county.
Acquisition cost includes equipment, machinery, furniture, fixtures, and similar tangible business property.

For most single-location Indianapolis businesses this is a clear yes. But run the math on your full equipment list before assuming - acquisition cost can add up faster than expected for businesses with heavy machinery or large IT investments.

You still must file - this is the part people miss

Here is the rule that costs businesses money: even when you are fully exempt, you must still file. For an under-$2M business in Marion County, that means filing the Form 103 Short and Form 104, and checking the under-$2M exemption box on Form 103.

The filing deadline is May 15. Filing the return is how you claim the exemption. Skipping it because "I don't owe anything" is exactly the mistake the rule punishes.

Warning

A $25 penalty applies for failing to file - even if your tax owed is zero. The exemption eliminates the tax, not the return. File the Form 103 Short and Form 104 by May 15 to claim it and avoid the penalty.

Form 103 Short vs. Form 103 Long

Which version of Form 103 you file depends on the size of your personal property:

Situation	Form to file
Under $2M acquisition cost in the county	Form 103 Short + Form 104, check the under-$2M box
More than $150,000 in personal property	Form 103 Long required
Multiple counties	File separately in each county where you have property

The Form 104 is the summary cover return that accompanies your Form 103 in every case. If your personal property exceeds $150,000, you move from the Short to the Long form even though you may still be under the $2M exemption threshold - so the form choice and the tax outcome are separate questions.

What counts toward acquisition cost

Acquisition cost is the original cost of the tangible personal property you use in the business, before depreciation. For a typical Indianapolis business, that includes:

Office furniture, desks, and shelving.
Computers, servers, and other IT equipment.
Machinery, tools, and shop equipment.
Signage, displays, and fixtures.
Leasehold improvements that qualify as personal property.

It generally does not include your real estate - the building and land are assessed separately as real property. That distinction matters: a business can be far under the $2M BPP threshold while still facing a large real-property assessment increase from the 2026 commercial surge. The two are taxed and appealed on entirely separate tracks.

Multi-county businesses

The per-county nature of the test is easy to overlook. A business with locations in Marion County and a neighboring county applies the $2M threshold independently in each. You could be exempt in one county and owe tax in another if equipment is concentrated in a single location. File a return in every county where you hold business personal property, even the exempt ones.

How to file in Indianapolis

Marion County businesses file through the Indianapolis BPP process. The Indianapolis business personal property taxes page covers the local filing portal and instructions. Plan to file before May 15. If you are new to BPP filing, give yourself time to assemble your equipment list and acquisition costs - that inventory is the foundation of the return.

A quick decision checklist

Total your acquisition cost for business personal property in Marion County.
Under $2M? You are exempt - but proceed to file anyway.
File Form 103 Short and Form 104 by May 15; check the under-$2M box on Form 103.
Over $150,000 in personal property? Use Form 103 Long instead of Short.
Operate in another county? Repeat the test and filing there.

The whole exercise is paperwork that costs nothing in tax for most small businesses - and a $25 penalty if ignored. File it.

Why the exemption still requires a return

It can feel backwards to file a return claiming you owe nothing. But the filing is how the assessor confirms the exemption applies to you. Without a return on record, the county has no documentation that your acquisition cost is under $2M - and the default is to expect a filing, not to assume exemption. The return is the mechanism that turns "I think I qualify" into "the county has confirmed I qualify." That is also why the $25 penalty exists: it enforces the recordkeeping, independent of any tax due.

Year-over-year: do not auto-pilot

If your business grows, revisit the test each year. Acquisition cost is cumulative - it reflects everything you have bought and still hold, not just this year's purchases. A business that crosses the $2M acquisition-cost line in a county moves from a $0 filing to an actual tax obligation, and at that point the form choice (Short vs. Long) and the valuation detail become consequential. Set a recurring May reminder so the deadline never sneaks up.

The statewide picture and the policy background behind this change are covered in our statewide $2M BPP exemption explainer.

Common questions

Do I file if I just started my business this year? Yes. A new business with property in the county files a return for the assessment year, claiming the exemption if you are under $2M.

What if I closed the business mid-year? The obligation is tied to property held on the January 1 assessment date. If you held qualifying property on January 1, you generally still file for that year.

I have almost no equipment - do I really need to file? Yes. There is no de minimis carve-out from the filing requirement. The exemption removes the tax, not the return, and the $25 penalty applies regardless of how little property you own.

Does the exemption cover my building? No. Real property is assessed and taxed separately. The $2M BPP exemption applies only to tangible business personal property like equipment and fixtures.

Find Your Property

Reviewing your business location and parcel? Start at Marion County and check commercial parcels for your property's assessment context.

Our property lookup gives you the real-property picture for your business location, and our tax appeal service helps if the real-estate assessment on your commercial parcel jumped in the 2026 surge - a separate issue from BPP, but one many business owners face at the same time.

For official filing details, see the Indianapolis business personal property page and the DLGF.