SB 264

                                               *SB0264.1*
                                                                January 21, 2026
           SENATE BILL No. 264
                 _____
   DIGEST OF SB 264 (Updated January 20, 2026 11:11 am - DI 120)
Citations Affected: IC 6-3.1.
Synopsis: Economic development tax credits. Amends the economic
development for a growing economy (EDGE) tax credit to: (1)
authorize the Indiana economic development corporation (IEDC) to
increase the value of an EDGE credit to a company for new job
creation based on the amount of expenses of the company to relocate
an individual to Indiana to fill the position; and (2) explicitly permit the
IEDC to provide EDGE credits to a company that is retaining an
employee through a minimum of a 25% increase in hourly wages paid
to the individual. Clarifies provisions that apply to IEDC certification
of a fund as a qualified Indiana investment fund.
Effective: July 1, 2026.
                 Buchanan, Rogers
   January 8, 2026, read first time and referred to Committee on Tax and Fiscal Policy.
   January 20, 2026, amended, reported favorably — Do Pass.
SB 264—LS 7096/DI 120
                                                                             January 21, 2026
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   SENATE BILL No. 264
    A BILL FOR AN ACT to amend the Indiana Code concerning
 taxation.
     Be it enacted by the General Assembly of the State of Indiana:
1     SECTION 1. IC 6-3.1-13-2, AS AMENDED BY P.L.4-2005,
2 SECTION 67, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 2. (a) As used in this chapter, "credit amount"
4 means the amount agreed to between the corporation and applicant
5 under this chapter, but not to exceed, in the case of a credit awarded for
6 a project to create new jobs in Indiana, the incremental income tax
7 withholdings attributable to the applicant's project.
8     (b) Notwithstanding subsection (a), in the case of a credit
9 awarded for a project to create new jobs in Indiana that are filled
10 by a full-time employee, as defined in section 4 of this chapter, who
11 is a new resident of Indiana, as determined by the corporation, the
12 credit amount means the amount agreed to between the
13 corporation and applicant under this chapter not to exceed the
14 incremental income tax withholdings attributable to the position
15 filled by the new full-time Indiana resident employee plus an
16 additional amount not to exceed ten thousand dollars ($10,000).
17     SECTION 2. IC 6-3.1-13-13, AS AMENDED BY P.L.74-2020,
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1 SECTION 9, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
2 JULY 1, 2026]: Sec. 13. (a) The corporation may make credit awards
3 under this chapter for any of the following:
4(1) To foster job creation in Indiana.
5(2) To foster job retention in Indiana.
6(3) To foster job and employee retention in Indiana through
7the increase of wages paid to existing full-time employees.
8     (b) The credit shall be claimed for the taxable years specified in the
9 taxpayer's tax credit agreement.
10     SECTION 3. IC 6-3.1-13-14, AS AMENDED BY P.L.74-2020,
11 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
12 JULY 1, 2026]: Sec. 14. (a) A person that proposes a project to create
13 new jobs in Indiana may apply, as provided in section 15 of this
14 chapter, to the corporation to enter into an agreement for a tax credit
15 under this chapter.
16     (b) A person that proposes to retain existing jobs in Indiana may
17 apply, as provided in section 15.5 of this chapter, to the corporation to
18 enter into an agreement for a tax credit under this chapter.
19     (c) A person that proposes to retain existing jobs and employees
20 in Indiana by increasing wages paid to existing full-time employees
21 may apply, as provided in section 15.6 of this chapter, to the
22 corporation to enter into an agreement for a tax credit under this
23 chapter.
24     (c) (d) The corporation shall prescribe the form of the application.
25     SECTION 4. IC 6-3.1-13-15, AS AMENDED BY P.L.197-2005,
26 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
27 JULY 1, 2026]: Sec. 15. (a) This section subsection applies to an
28 application proposing a project to create new jobs in Indiana. After
29 receipt of an application, the corporation may enter into an agreement
30 with the applicant for a credit under this chapter if the corporation
31 determines that all of the following conditions exist:
32(1) The applicant's project will create new jobs that were not jobs
33previously performed by employees of the applicant in Indiana.
34(2) The applicant's project is economically sound and will benefit
35the people of Indiana by increasing opportunities for employment
36in Indiana and strengthening the economy of Indiana.
37(3) Receiving the tax credit is a major factor in the applicant's
38decision to go forward with the project and not receiving the tax
39credit will result in the applicant not creating new jobs in Indiana.
40(4) Awarding the tax credit will result in an overall positive fiscal
41impact to the state, as certified by the budget agency using the
42best available data.
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1      (5) The credit is not prohibited by section 16 of this chapter.
2      (6) If the business is located in a community revitalization
3      enhancement district established under IC 36-7-13 or a certified
4      technology park established under IC 36-7-32, the legislative
5      body of the political subdivision establishing the district or park
6      has adopted an ordinance recommending the granting of a credit
7      amount that is at least equal to the credit amount provided in the
8      agreement.
9    (b) This subsection applies to an application proposing to create
10 new jobs in Indiana that may be filled by an individual who is a
11 new resident of Indiana, as determined by the corporation. In
12 addition to the conditions contained in subsection (a), the
13 corporation may enter into an agreement with the applicant for a
14 credit under this chapter that may exceed the incremental income
15 tax withholdings attributable to the applicant's project if the
16 corporation determines that all of the following conditions exist:
17      (1) The new jobs created by the applicant's project may be
18      filled by individuals who, prior to their employment at the
19      project location, were not residents of Indiana.
20      (2) The applicant's project is engaging in research and
21      development, manufacturing, or business services, according
22      to the NAICS Manual of the United States Office of
23      Management and Budget.
24      (3) The applicant will implement or maintain a program that
25      facilitates the relocation of individuals to Indiana for the
26      purpose of employment by the applicant at the project
27      location through payments to reimburse the individual, or
28      that are paid directly to third parties on behalf of the
29      individual, that include:
30(A) moving costs;
31(B) relocation bonuses;
32(C) housing assistance;
33(D) storage fees;
34(E) home sale or purchase assistance; or
35(F) other applicable expenses associated with relocating
36individuals to Indiana that are approved by the
37corporation.
38      (4) The average compensation (including benefits) provided
39      to the applicant's new employees exceeds two hundred percent
40      (200%) of the state average wage.
41    SECTION 5. IC 6-3.1-13-15.6 IS ADDED TO THE INDIANA
42 CODE AS A NEW SECTION TO READ AS FOLLOWS
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1 [EFFECTIVE JULY 1, 2026]: Sec. 15.6. This section applies to an
2 application proposing to retain existing jobs and employees in
3 Indiana through the increase of wages paid to existing Indiana
4 resident full-time employees. After receipt of an application, the
5 corporation may enter into an agreement with the applicant for a
6 credit under this chapter if the corporation determines that all of
7 the following conditions exist:
8      (1) The conditions in section 15.5(1) through 15.5(5) of this
9      chapter, section 15.5(7) through 15.5(8) of this chapter, and
10      section 15.5(10) of this chapter are satisfied.
11      (2) Receiving the tax credit is a major factor in the applicant's
12      decision to increase the wages of existing employees at the
13      project location by at least twenty-five percent (25%).
14      (3) Awarding the tax credit will reduce the potential:
15(A) loss of employees; and
16(B) of the applicant either:
17(i) reducing jobs in Indiana, or
18(ii) maintaining job vacancies because of the loss of
19employees in Indiana.
20    SECTION 6. IC 6-3.1-13-17, AS AMENDED BY P.L.135-2022,
21 SECTION 7, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
22 JULY 1, 2026]: Sec. 17. (a) If the applicant proposes a project that will
23 be located at a physical location in Indiana, in determining the credit
24 amount that should be awarded to an applicant under section 15 of this
25 chapter that proposes a project to create jobs in Indiana, the corporation
26 may take into consideration the following factors:
27      (1) The economy of the county where the projected investment is
28      to occur.
29      (2) The potential impact on the economy of Indiana.
30      (3) The incremental payroll attributable to the project.
31      (4) The capital investment attributable to the project.
32      (5) The amount the average wage paid by the applicant exceeds
33      the average wage paid:
34(A) within the county in which the project will be located, in
35the case of an application submitted before January 1, 2006; or
36(B) in the case of an application submitted after December 31,
372005:
38(i) to all employees working in the same NAICS industry
39sector to which the applicant's business belongs in the
40county in which the applicant's business is located, if there
41is more than one (1) business in that NAICS industry sector
42in the county in which the applicant's business is located;
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1(ii) to all employees working in the same NAICS industry
2sector to which the applicant's business belongs in Indiana,
3if the applicant's business is the only business in that NAICS
4industry sector in the county in which the applicant's
5business is located but there is more than one (1) business in
6that NAICS industry sector in Indiana; or
7(iii) to all employees working in the same county as the
8county in which the applicant's business is located, if there
9is no other business in Indiana in the same NAICS industry
10sector to which the applicant's business belongs.
11      (6) The costs to Indiana and the affected political subdivisions
12      with respect to the project.
13      (7) The financial assistance and incentives that are otherwise
14      provided by Indiana and the affected political subdivisions.
15      (8) The extent to which the incremental income tax withholdings
16      attributable to the applicant's project are needed for the purposes
17      of an incremental tax financing fund or industrial development
18      fund under IC 36-7-13 or a certified technology park fund under
19      IC 36-7-32.
20 As appropriate, the corporation shall consider the factors in this
21 subsection to determine the credit amount awarded to an applicant for
22 a project to retain existing jobs in Indiana under section 15.5 of this
23 chapter or to retain existing employees and their jobs in Indiana
24 under section 15.6 of this chapter.
25    (b) Subject to the limitations of subsection (c), if an applicant
26 proposes a project that proposes to create new jobs in Indiana but does
27 not propose a physical location in Indiana, the corporation may
28 consider the following factors:
29      (1) The potential impact on the economy in Indiana.
30      (2) The incremental payroll attributable to the project.
31      (3) The amount of average wage paid by the applicant that
32      exceeds the average wage paid to all employees working in the
33      same NAICS industry sector to which the applicant's business
34      belongs in Indiana.
35      (4) The cost to Indiana with respect to the project.
36      (5) The financial assistance and incentives that are otherwise
37      provided by Indiana.
38      (6) The extent of Indiana income tax that is paid by eligible
39      employees.
40    (c) An applicant proposing a project that meets the requirements of
41 subsection (b) must propose:
42      (1) to create at least fifty (50) new full-time jobs; and
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1(2) to pay an average hourly wage of at least one hundred fifty
2percent (150%) of the state average wage;
3 in order to be eligible to receive a credit under this chapter.
4    SECTION 7. IC 6-3.1-13-18, AS AMENDED BY P.L.135-2022,
5 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
6 JULY 1, 2026]: Sec. 18. (a) The corporation shall determine the
7 amount and duration of a tax credit awarded under this chapter. The
8 duration of the credit may not exceed twenty (20) taxable years. The
9 credit may be stated as a percentage of the incremental income tax
10 withholdings attributable to the applicant's project and may include a
11 fixed dollar limitation. Except as otherwise provided in section 2(b)
12 of this chapter, in the case of a credit awarded for a project to create
13 new jobs in Indiana, the credit amount may not exceed the incremental
14 income tax withholdings. However, the credit amount claimed for a
15 taxable year may exceed the taxpayer's state tax liability for the taxable
16 year, in which case the excess may, at the discretion of the corporation,
17 be refunded to the taxpayer.
18    (b) This subsection does not apply to a business that was enrolled
19 and participated in the E-Verify program (as defined in IC 22-5-1.7-3)
20 during the time the taxpayer conducted business in Indiana in the
21 taxable year. A credit under this chapter may not be computed on any
22 amount withheld from an individual or paid to an individual for
23 services provided in Indiana as an employee, if the individual was,
24 during the period of service, prohibited from being hired as an
25 employee under 8 U.S.C. 1324a.
26    SECTION 8. IC 6-3.1-24-7.5, AS ADDED BY P.L.165-2021,
27 SECTION 80, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
28 JULY 1, 2026]: Sec. 7.5. (a) The Indiana economic development
29 corporation may certify that an investment fund is a qualified Indiana
30 investment fund if the corporation determines that the fund meets the
31 definition in section 2.5 of this chapter and the requirements in
32 subsection (b).
33    (b) The Indiana economic development corporation may only certify
34 a fund as a qualified Indiana investment fund if the fund makes
35 investments according to a policy that:
36(1) requires eligible companies to be primarily focused on the
37commercialization of research and development, technology
38transfer, or application of new technology; and
39(2) prioritizes investments in companies that:
40(A) have received a grant, loan, or other investment funds
41provided by the Indiana twenty-first century research and
42technology fund established by IC 5-28-16-2; or
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1(B) maintain a substantial presence in Indiana.
2 The policy referred to in this subsection shall apply only to
3 investable capital in the fund, excluding management fees, legal
4 fees, and other expenses incurred in the operation of the fund.
5     (c) An investment fund must apply to be certified as a qualified
6 Indiana investment fund on a form prescribed by the Indiana economic
7 development corporation.
8     (d) If an investment fund is certified as a qualified Indiana
9 investment fund under this section, the Indiana economic development
10 corporation shall provide a copy of the certification to the investors in
11 the qualified Indiana investment fund for inclusion in tax filings.
12     SECTION 9. IC 6-3.1-24-12, AS AMENDED BY P.L.165-2021,
13 SECTION 85, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
14 JULY 1, 2026]: Sec. 12. (a) If the amount of the credit determined
15 under section 8 or 8.5 of this chapter for a taxpayer in a taxable year
16 exceeds the taxpayer's state tax liability for that taxable year, the
17 taxpayer may carry the excess credit over for a period not to exceed the
18 taxpayer's following five (5) taxable years. The amount of the credit
19 carryover from a taxable year shall be reduced to the extent that the
20 carryover is used by the taxpayer to obtain a credit under this chapter
21 for any subsequent taxable year. A taxpayer is not entitled to a
22 carryback or a refund of any unused credit amount.
23     (b) If the corporation certifies a credit for an investment that is made
24 after June 30, 2020, and before July 1, 2029, the taxpayer may assign
25 all or part of the credit to which the taxpayer is entitled under this
26 chapter, subject to the limitations set forth in subsection (c).
27     (c) The following apply to the assignment of a credit under this
28 chapter:
29(1) A taxpayer may not assign all or part of a credit or credits to
30a particular person in amounts that are less than ten thousand
31dollars ($10,000).
32(2) Before a credit may be assigned, the taxpayer must notify the
33corporation of the assignment of the credit in the manner
34prescribed by the corporation.
35(3) An assignment of a credit must be in writing, and both the
36taxpayer and assignee shall report the assignment on the
37taxpayer's and assignee's state tax returns for the year in which the
38assignment is made, in the manner prescribed by the department.
39(4) Once a particular credit or credits are assigned, the assignee
40may not assign all or part of the credit or credits to another
41person.
42(5) A taxpayer may not receive value in connection with an
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1assignment under this section that exceeds the value of that part
2of the credit assigned.
3 Nothing in this subsection shall prevent a taxpayer from combining
4 individual credits of less than ten thousand dollars ($10,000) for
5 assignment.
6    (d) The corporation shall collect and compile data on the
7 assignments of tax credits under this chapter and determine the
8 effectiveness of each assignment in getting projects completed. The
9 corporation shall report its findings under this subsection to the
10 legislative council in an electronic format under IC 5-14-6 before
11 November 1, 2022. This subsection expires January 1, 2023.
 SB 264—LS 7096/DI 120
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                   COMMITTEE REPORT
   Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred Senate Bill No. 264, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
   Page 1, line 13, after "exceed" insert "the incremental income tax
withholdings attributable to the position filled by the new full-time
Indiana resident employee plus an additional amount not to
exceed".
   Page 6, after line 23, begin a new paragraph and insert:
   "SECTION 8. IC 6-3.1-24-7.5, AS ADDED BY P.L.165-2021,
SECTION 80, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 7.5. (a) The Indiana economic development
corporation may certify that an investment fund is a qualified Indiana
investment fund if the corporation determines that the fund meets the
definition in section 2.5 of this chapter and the requirements in
subsection (b).
   (b) The Indiana economic development corporation may only certify
a fund as a qualified Indiana investment fund if the fund makes
investments according to a policy that:
  (1) requires eligible companies to be primarily focused on the
  commercialization of research and development, technology
  transfer, or application of new technology; and
  (2) prioritizes investments in companies that:
     (A) have received a grant, loan, or other investment funds
     provided by the Indiana twenty-first century research and
     technology fund established by IC 5-28-16-2; or
     (B) maintain a substantial presence in Indiana.
The policy referred to in this subsection shall apply only to
investable capital in the fund, excluding management fees, legal
fees, and other expenses incurred in the operation of the fund.
   (c) An investment fund must apply to be certified as a qualified
Indiana investment fund on a form prescribed by the Indiana economic
development corporation.
   (d) If an investment fund is certified as a qualified Indiana
investment fund under this section, the Indiana economic development
corporation shall provide a copy of the certification to the investors in
the qualified Indiana investment fund for inclusion in tax filings.
   SECTION 9. IC 6-3.1-24-12, AS AMENDED BY P.L.165-2021,
SECTION 85, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2026]: Sec. 12. (a) If the amount of the credit determined
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under section 8 or 8.5 of this chapter for a taxpayer in a taxable year
exceeds the taxpayer's state tax liability for that taxable year, the
taxpayer may carry the excess credit over for a period not to exceed the
taxpayer's following five (5) taxable years. The amount of the credit
carryover from a taxable year shall be reduced to the extent that the
carryover is used by the taxpayer to obtain a credit under this chapter
for any subsequent taxable year. A taxpayer is not entitled to a
carryback or a refund of any unused credit amount.
(b) If the corporation certifies a credit for an investment that is made
after June 30, 2020, and before July 1, 2029, the taxpayer may assign
all or part of the credit to which the taxpayer is entitled under this
chapter, subject to the limitations set forth in subsection (c).
(c) The following apply to the assignment of a credit under this
chapter:
  (1) A taxpayer may not assign all or part of a credit or credits to
  a particular person in amounts that are less than ten thousand
  dollars ($10,000).
  (2) Before a credit may be assigned, the taxpayer must notify the
  corporation of the assignment of the credit in the manner
  prescribed by the corporation.
  (3) An assignment of a credit must be in writing, and both the
  taxpayer and assignee shall report the assignment on the
  taxpayer's and assignee's state tax returns for the year in which the
  assignment is made, in the manner prescribed by the department.
  (4) Once a particular credit or credits are assigned, the assignee
  may not assign all or part of the credit or credits to another
  person.
  (5) A taxpayer may not receive value in connection with an
  assignment under this section that exceeds the value of that part
  of the credit assigned.
Nothing in this subsection shall prevent a taxpayer from combining
individual credits of less than ten thousand dollars ($10,000) for
assignment.
(d) The corporation shall collect and compile data on the
assignments of tax credits under this chapter and determine the
effectiveness of each assignment in getting projects completed. The
corporation shall report its findings under this subsection to the
legislative council in an electronic format under IC 5-14-6 before
November 1, 2022. This subsection expires January 1, 2023.".
Renumber all SECTIONS consecutively.
and when so amended that said bill do pass.
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  (Reference is to SB 264 as introduced.)
                                        HOLDMAN, Chairperson
Committee Vote: Yeas 12, Nays 0.
SB 264—LS 7096/DI 120