Indiana Farmers Celebrate 2025 Legislative Wins, but Key Transition Tax Credit Falls Short

By Casey Smith

Property tax tweaks and a new online portal were among this year’s legislative wins for Hoosier farmers. But a high-priority proposal to help retiring farmers transition land to a new generation of growers failed to cross the finish line in the final days of the session.

Rural-focused portions of Gov. Mike Braun’s first agenda pledged to “cut red tape,” strengthen the agricultural economy and protect Indiana farmland from encroaching development.

The Republican governor had two early successes: property tax relief and a new online farmer portal.

Some Legislative Wins

Baked into Senate Enrolled Act 1, a hotly-debated property tax measure, were changes to how farmland is assessed for property taxes — increasing the capitalization rate in the farmland formula from 8% to 9%, and adding a new assessed value deduction.

Braun maintained those changes will bring at least some relief for farmers. Agricultural lobbying groups agreed, in part, but said more works need to be done on property taxes, specifically.

“While this will provide relief to Hoosier farmers on their real property taxes the next couple of years, taxes on other agricultural infrastructure like farm buildings and permanent structures are expected to increase due to shifts within the tax base,” said Andy Tauer, Indiana Farm Bureau’s executive director of public policy. “Our members have seen property tax bills go up 60% over the past three years, while net farm incomes have gone down. So, we need to return to the Statehouse in the coming years to craft a more comprehensive and sustainable solution for farmers.”

Another win came in House Enrolled Act 1149, the first bill signed into law by Braun.

The measure, authored by Rep. Kendell Culp, R-Rensselaer, creates an online “one-stop-shop” portal for farmers to access funding opportunities, regulatory information and state agency contacts.

“Hoosier farmers feed America and power our economy, and this bill makes their important job a little bit easier,” the governor told reporters at a Statehouse bill signing ceremony.

Braun’s plan additionally called for the creation of a farmland preservation task force, as well as upgrades in rural communities, including roads, broadband, and water systems.

Members of Indiana Farm Bureau’s water task force in 2024 identified a “gap” in protections for agriculture and significant groundwater well users who utilize irrigation or need water for livestock, Tauer said. Under earlier state law, those users were responsible for proving any loss of water and were liable in court.

Farm bureau leadership said the lobbying group worked with Republican Sen. Sue Glick, of LaGrange, to craft Senate Enrolled Act 28, which establishes a reporting and investigation process managed by the Indiana Department of Natural Resources to fix those issues and ensure that agriculture is protected in cases when usable water is unavailable. Braun signed the legislation in mid-April.

“Although we were successful in getting our water policy signed, we did not get the property tax relief that Hoosier farmers really need,” said Indiana Farm Bureau President Randy Kron. “While we are appreciative of the change in the farmland formula, it’s incredibly important that we advocate for more tax relief for our members in the future and we vow to do just that.

Other agricultural sector bills that passed and were supported by Indiana Farm Bureau and other lobbying groups included:

• Senate Enrolled Act 461: Clarifies the responsibilities of the Indiana Grain Buyers and Warehouse Licensing Agency, ensuring better compliance and support for struggling licensees.
• House Enrolled Act 1012: Requires law enforcement to inform landowners of any damage to their property resulting from motor vehicle accidents.
• House Enrolled Act 1461: Provides additional funding and tax options for local government infrastructure projects, benefiting rural communities.

Retired Farmer Credit Fails Amid Budget Shortfalls

Axed from the final draft of the state’s next two-year budget, however, was a tax credit to support land transitions.

The proposed “retiring farmers tax credit,” originally introduced by Culp, would have offered up to $67,000 in tax credits to landowners who sell or lease farmland or agricultural equipment to beginning farmers, helping ease barriers to land access and encouraging transitions to a younger generation of farmers.

Claire Shipp, Midwest policy manager for the American Farmland Trust, said the policy was based on successful models in Minnesota, Iowa and other states.

With more than 34% of Hoosier farmers now over the age of 65, Indiana is facing “a major shift in farmland ownership,” Shipp said.

Many retiring farmers want to sell or lease to a beginning farmer but can’t afford to turn down higher offers from developers or institutional buyers, she added. The tax credit would have provided an incentive “to preserve Indiana’s agricultural legacy, support rural economies, and ensure farmland stays in productive use for future generations.”

Although the tax credit was included in Braun’s proposed budget in February, it was removed by GOP budget writers in the House.

A Senate version of the state budget later added a “beginning farmer tax credit,” modeled after a similar program in Ohio, but was ultimately dropped in final budget negotiations.

Caitlin Smith, Indiana Farm Bureau’s director of policy engagement, said that while her group supported the tax credit, budget pressures ultimately derailed the proposal.

She pointed to the state’s April fiscal forecast, which revealed $2 billion less in revenue that expected, prompting lawmakers to trim provisions late in the session.

“Indiana Farm Bureau’s two main policy priorities this year were to provide tax relief and water protections,” Smith said. “While we supported the governor’s agenda initiative, as well as Rep. Culp’s bill as filed, ultimately those didn’t make it across the finish line due to budget constraints. After the April forecast was released, legislative leadership made tough decisions to close the budget gap and that was one of the items that fell off.”

Smith noted that the goal of the credit was to help encourage and foster young farmers buying land to start their businesses.

“We know land prices are skyrocketing while the farm economy is on a downward turn, so this credit would be a tool in the toolbox to foster the next generation taking over farms,” she said. “We’re supportive of those initiatives, but we were really focused on asking and advocating for tax relief this year.”

Shipp said the American Farmland Trust plans to advocate for similar legislation again and is working with Culp and other lawmakers to revisit the proposal in 2026.

“Keeping farmland in the hands of farmers is not just a private benefit — it is a public good,” she continued. “When young farmers have access to land, they contribute to local economies, bolster rural communities, and continue the agricultural heritage that sustains Indiana.”

The Indiana Capital Chronicle is an affiliate of States Newsroom, the nation’s largest state-focused nonprofit news organization, supported by grants and donations. It is free of advertising and free to readers. The Capital Chronicle retains full editorial independence.