Indiana just announced one of the most generous tax amnesty programs in the country — and the window opens in 16 days.

From July 15, 2026, through September 9, 2026, taxpayers have a limited-time opportunity to pay past-due, eligible taxes and receive a waiver of related penalties, interest, and collection fees.

That's not a reduction in penalties. That's a full waiver — every dollar of accumulated interest, every penalty charge, every collection fee. Gone. If you pay the underlying tax you owe, the rest disappears.

On top of the financial relief, the program also provides lien releases and protection from civil and criminal prosecution for eligible liabilities.

For any business that has been carrying Indiana sales tax exposure — uncollected tax, unfiled returns, underreported periods — this is the most favorable resolution path that will exist in Indiana for years. Possibly decades. Indiana's last amnesty was in 2015. The one before that was 2005.

This window is real. It is limited. And most businesses that could benefit from it don't know it exists.

What Indiana Is Waiving — And Why It's a Big Deal

To understand the value of this program, you need to understand what Indiana's normal penalty structure looks like without it.

Indiana's standard late payment penalties start at 10% of the tax due — immediately. Interest accrues on top of that at the adjusted rate set quarterly by the DOR, currently running at 5% annually. For a liability that has been sitting unresolved for three years — covering tax periods from 2021, 2022, and 2023 — the accumulated interest and penalties can easily exceed the original tax principal.

A business that owes $50,000 in Indiana sales tax from 2021-2023 might be looking at $65,000 to $75,000 in total liability by the time penalties and interest are added. Under Tax Amnesty 2026, that business pays $50,000 — the tax only — and the remaining $15,000 to $25,000 in penalties and interest is wiped out entirely.

DOR is projecting it could collect between $65 million and $145 million through Tax Amnesty 2026. That projection reflects both the volume of outstanding liability in the state and the program's significant financial incentive to come forward.

Who Qualifies

The eligibility rules are broader than most people assume — and residency is explicitly not a barrier.

Residency is not a requirement — eligibility is determined by liability, not domicile. Any individual or business with eligible Indiana tax liabilities, including non-residents who earned Indiana-source income or conducted taxable sales into Indiana, may participate.

The three core eligibility requirements:

1. You have eligible tax liabilities. Liabilities for all listed taxes managed by DOR owed for tax periods ending prior to January 1, 2024, are eligible. That covers sales and use tax, individual income tax, corporate income tax, financial institutions tax, and other DOR-administered taxes. Motor Carrier Services taxes including IFTA and IRP liabilities are also eligible with direct contact to DOR or UCB.

2. You didn't participate in Indiana's 2005 or 2015 amnesty programs. Individuals and businesses that have participated in either the 2005 or 2015 amnesty programs are not eligible to participate in Tax Amnesty 2026. If you took advantage of either prior program, this one isn't available to you.

3. All your current Indiana returns must be filed. A valid amnesty election requires that all previous and current Indiana tax returns be filed. You can't participate while owing unfiled returns — the DOR requires your filing history to be current before amnesty can be granted. If you have unfiled returns, file them first.

What's Not Eligible

A few categories fall outside the program's scope:

• Liabilities for tax periods ending after December 31, 2023 — post-2023 liabilities aren't covered by this amnesty. Only pre-2024 periods qualify.
• Property taxes — not administered by the DOR, therefore not part of the program.
• Unemployment taxes — same reason, not administered by the DOR.
• Taxpayers currently in protest or appeal — taxpayers in the appeals or protest stage before the amnesty begins will be in a holding status and will not face double penalties if they choose not to participate during the protest or appeal process — but they will be ineligible for the penalty waiver.

The Detail Nobody Else Is Writing About: Audited Businesses Can Still Participate

This is the most remarkable feature of Indiana's 2026 amnesty — and the one most businesses with active audits are missing.

Even businesses currently under audit with an assessment may take advantage of the amnesty window and receive the full benefits. This means that even though the Department has begun a formal review, the state believes your company is liable for tax, and took the steps to initiate a proposed assessment — a company may still opt into the amnesty window. The Sales Tax People

In most state amnesty programs, being under audit disqualifies you entirely. The audit has already started; the state found you; you've lost the proactive advantage. Indiana's 2026 program explicitly allows audited businesses to participate — meaning companies that would normally be locked into the full audit process with full penalties can still use the amnesty to settle their liability at the tax-only amount.

The one trade-off: taxpayers that pay their liabilities during the amnesty period waive their right to appeal or protest those amounts. By participating in amnesty, you're accepting the liability and giving up the ability to contest it later. For most businesses with clear-cut exposure, that's an acceptable trade. For businesses with legitimate legal defenses, it's worth evaluating carefully before participating. Taxfyle

Amnesty vs. Voluntary Disclosure — Which Is Right for You

Indiana's Tax Amnesty 2026 isn't the only resolution path available. The DOR's Voluntary Disclosure Agreement program — which provides a limited lookback period — is still available simultaneously.

Per BDO communication with the DOR, the voluntary disclosure agreement program is still available to eligible non-filers, even during the amnesty period.

Here's how to think about the choice:

Tax Amnesty 2026 is better if:

• You have significant pre-2024 liabilities with accumulated penalties and interest
• You've been registered in Indiana but under-collected or under-filed
• You're currently under audit and want to resolve it on favorable terms
• You want the broadest possible penalty and interest waiver

Voluntary Disclosure is better if:

• You've never registered in Indiana and want to limit your lookback period
• Your liability extends into 2024 and beyond — VDA covers all open periods
• You're a non-filer who wants to negotiate the scope of what years are examined
• You can live with paying interest (VDA doesn't waive interest) in exchange for a shorter exposure window

Given that the VDA program provides a limited lookback period and includes all past periods including tax periods ended in 2024 and later, but does not waive interest, non-filers eligible to pay taxes under either program should review the impact of each to make the most beneficial choice. Taxfyle

The right answer depends on your specific situation. A business with three years of under-collected Indiana sales tax and no filing history might benefit more from VDA's limited lookback. A business that filed correctly but has open audit periods with significant accrued interest might benefit more from amnesty's full waiver.

Who Should Be Paying Attention Right Now

Three categories of businesses have the most to gain from Indiana Tax Amnesty 2026 — and all three should be acting now, not waiting until July 15.

Ecommerce sellers who crossed Indiana's nexus threshold:
Indiana's economic nexus threshold is $100,000 in annual sales or 200 transactions. Sellers who crossed that threshold in 2021, 2022, or 2023 and never registered have been accumulating liability ever since. For multi-state retailers navigating complex sourcing rules, marketplace facilitators and third-party sellers, and businesses mistakenly using the wrong exemption or resale certificate — this amnesty is specifically designed for you. The Sales Tax People

Businesses that misclassified products or services:
Indiana has specific rules about what's taxable and what's exempt. SaaS is generally not taxable in Indiana. Certain digital products are. Services that seem like professional services may actually be taxable if they involve tangible personal property. Misclassification errors that have accumulated over multiple years — taxing things that should be exempt, or not taxing things that should be taxed — create liability that amnesty can resolve cleanly.

Businesses with Indiana locations that haven't reviewed their nexus:
A remote employee working from Indiana, a warehouse or fulfillment partner in Indiana, a sales rep making regular Indiana calls — any of these can create physical nexus that triggers sales tax obligations beyond what economic nexus rules would require. Physical nexus exposure that predates 2024 is eligible for amnesty.

How to Participate — The Step-by-Step Process

The process is straightforward — but it has specific steps and a hard deadline for each.

Step 1: Check your eligibility now.
The tax amnesty tool allows individuals and businesses to check their eligibility to participate in Tax Amnesty 2026. Information about the tool and what to do if your liabilities are amnesty-eligible can be found in the FAQ on the DOR's page. The eligibility tool is available through INTIME.

Visit in.gov/dor/amnesty to access the eligibility tool. If you receive a letter from UCB (United Collection Bureau) or the DOR announcing amnesty eligibility, that's a signal you have identified liabilities in the system — act on it immediately.

Step 2: File any missing Indiana returns.
Before you can participate, all your Indiana returns must be filed and current. If you have unfiled returns from 2021, 2022, or 2023, file them before July 15. Filing now gives you time to review the returns and prepare for amnesty without the pressure of the deadline.

Step 3: Calculate your liability.
Determine exactly what you owe — the tax principal only, for periods ending before January 1, 2024. Penalties and interest will be waived, so you need the clean underlying number. This is also the moment to decide whether amnesty or VDA is the better path for your situation.

Step 4: Act between July 15 and September 9.
To successfully participate, you must do one of the following between July 15 and September 9, 2026: call UCB at 888-782-5985 to arrange to pay liabilities in full or set up a payment plan, or set up an INTIME account to either pay the liabilities in full or set up a payment plan. The Sales Tax People

Step 5: Pay in full or set up a payment plan.
You must pay your liability in full prior to September 9, 2026, or have your amnesty payment plan paid in full by June 7, 2027.

Payment plan minimums: for individuals, eligible liabilities must total at least $100 to qualify for a payment plan. For businesses, eligible liabilities must total at least $500 to qualify for a payment plan.

Important: there are no extensions available for the Tax Amnesty 2026 program. Miss the September 9 deadline and the window closes permanently. The amnesty is gone. The penalties and interest come back. The Sales Tax People

What Happens If You Miss This Window

If you have Indiana sales tax exposure from pre-2024 periods and choose not to participate in Tax Amnesty 2026, the options that remain are significantly less favorable.

Indiana's enforcement environment is getting tighter. The state's data matching capabilities have improved. Marketplace facilitator reporting creates a paper trail for sales that previously went undetected. And Indiana's data center disclosure story — $655 million in exemptions, most to Amazon — has raised the state's profile as a jurisdiction that takes tax obligations seriously.

After September 9, businesses with pre-2024 Indiana liability face the full penalty and interest stack with no amnesty relief available. The next program, if Indiana follows its historical pattern, won't come until 2036.

The cost of waiting is real. The cost of acting now is just the tax you owe.

Operating a business that sells into Indiana and want to understand whether you have pre-2024 sales tax exposure that qualifies for Tax Amnesty 2026 — or whether amnesty or voluntary disclosure is the better path for your situation? Book a free consultation with our team at sales.tax. We'll review your Indiana nexus history, calculate your potential liability, and help you navigate the amnesty process before the September 9 window closes.

Indiana has been quietly handing out hundreds of millions of dollars in sales tax exemptions to data centers every year — and until recently, nobody outside the industry had a clear picture of how much.

An investigation by WTHR-TV in Indianapolis and watchdog group Good Jobs First forced the disclosure. What they found: Indiana is providing more than $655 million in sales and use tax exemptions for data centers across the state.

And $561 million of that — 86% of the total — goes to a single company.

Amazon.

The story of how Indiana ended up here is the same story playing out in Virginia, Ohio, Pennsylvania, and Georgia — just a few years earlier in the political cycle. And now that the number is public, Indiana's exemption is about to face the same scrutiny that has consumed state legislatures across the country in 2026.

How Indiana's Exemption Works — And Why It's So Generous

Indiana passed its data center sales tax exemption in 2019. The legislation offered eligible data centers a significant sales tax break — facilities packed with state-of-the-art servers could avoid the state's 7% sales tax when purchasing equipment and power.

Indiana offers some of the country's most generous subsidies — including a sales tax exemption on energy and equipment for up to 50 years for data centers that invest more than $750 million.

50 years. That's not a typo. A data center that qualifies under Indiana's most generous tier can avoid paying Indiana's 7% sales tax on equipment and energy purchases for half a century.

The investment thresholds vary by population of the county where the data center is located — ranging from $25 million to $150 million in qualified investment over five years to qualify for the exemption. For hyperscalers like Amazon, Microsoft, and Google, those thresholds are easily cleared.

When the sales tax exemption was passed in 2019, lawmakers didn't anticipate that Big Tech companies would be building out large data centers — thus receiving billions of dollars in tax breaks. The AI boom sparked by the launch of OpenAI's ChatGPT in 2022 accelerated data center construction far beyond anything 2019 projections contemplated.

Sound familiar? It's exactly what happened in Virginia — where a $1.54 million annual projection grew to $1.6 billion. Indiana may be on the same trajectory.

The $655 Million Number — And Why It's Probably Bigger

The $655 million figure is significant — but it's explicitly not the full picture.

The more than $655 million figure covers state sales and use tax exemptions reported by data centers. It does not include local property tax abatements or all outstanding 2025 reports.

Indiana's Economic Development Corporation told investigators that some 2025 reports from data centers are still outstanding — meaning the total could grow beyond $655 million once all reporting is complete. And the figure doesn't include local property tax abatements, tax increment financing impacts, or other local incentives layered on top of the state exemption.

The reporting gap itself is a problem. Good Jobs First said it could not find a clear public price tag showing how much tax revenue Indiana was giving up through its data center tax exemption program — which is what prompted the investigation in the first place.

Under Indiana's law, the quasi-public Indiana Economic Development Corporation is responsible for collecting information about tax-abated investments at data center projects and reporting them to the state Comptroller. That arrangement created a transparency gap — the IEDC wasn't publishing the numbers publicly until investigative pressure forced the disclosure.

Who Is Getting the Money

Here's the breakdown of Indiana's data center sales tax exemptions as disclosed:

Amazon — $561 million. That's 86% of the entire disclosed total going to a single company.

DX Hammond Opco, LLC — $28.4 million since 2022.

Blocke LLC — $12.3 million.

Hatchworks LLC — $2 million. After the award was granted, a state filing showed Hatchworks is a subsidiary of Google. A Google spokesperson said using a third-party LLC until project details are finalized is standard practice in economic development projects.

Two Digital Egg projects — roughly $1.4 million combined.

The LLC opacity issue is worth pausing on. In 2023, a company named Hatchworks applied for Indiana's sales tax exemption — and only after the award was granted did a state filing reveal it was actually Google. The practice of using third-party LLCs to obscure identity during the application process is standard across the industry — which means Indiana's publicly disclosed list of exemption recipients may not accurately reflect which ultimate corporate beneficiaries are receiving the breaks.

Microsoft Just Walked Away

There's one notable exception in Indiana's data center landscape — and it's significant.

Microsoft announced in March 2026 that it would no longer be seeking local property tax abatements or breaks for their data center facility in La Porte.

Microsoft's voluntary decision to forgo property tax breaks — in a state where the exemption is available and where Amazon is taking full advantage — is unusual. Whether it reflects a broader corporate ESG positioning, a response to public scrutiny of data center subsidies, or a strategic decision specific to that facility isn't entirely clear.

But it does demonstrate that the exemption isn't mandatory — companies can choose to accept or decline it. And in a political environment where the size of these exemptions is increasingly in the public eye, Microsoft's move creates an interesting implicit pressure on other companies.

Why Indiana Didn't Know — And Why That's a Problem

The most alarming detail in WTHR's investigation isn't the dollar amount. It's the transparency gap that allowed the number to grow to $655 million without lawmakers having a clear picture of what was happening.

The public needs to know how much money the state is losing, but also the lawmakers need to access this information to be able to make good fiscal decisions about the state budget, said Kasia Tarczynska, a senior research analyst with Good Jobs First.

That's a direct indictment of Indiana's disclosure framework. The state's fiscal decision-makers were voting on budget priorities without a complete picture of how much revenue they were giving away through data center exemptions. The IEDC was collecting the data — but it wasn't being published in a form that made the aggregate cost visible.

Virginia had the same problem. Its data center exemption was projected to cost $1.54 million per year in 2008. It cost $1.6 billion in 2025. The cost exploded not because anyone decided to dramatically expand the program — but because the AI and cloud computing boom drove investment far beyond anything that was modeled, while the transparency mechanisms that would have triggered a legislative review didn't exist or weren't being used.

Indiana is watching Virginia's story play out and now holding its own version of the same mirror.

Indiana vs. The National Picture

At $655 million per year, Indiana is headed rapidly toward the dubious club of states already known to be losing more than $1 billion per year to data centers — Georgia, Ohio, Texas, and Virginia.

That club is going to grow. And the pattern is consistent across every member: exemptions created to attract an emerging industry, projections that dramatically underestimated the eventual cost, and a transparency gap that kept lawmakers in the dark until watchdog groups or investigative journalists forced the numbers into the open.

The states still in the dark — where exemption costs exist but haven't been publicly disclosed — include Alabama, Arkansas, Idaho, Iowa, Louisiana, Maryland, Missouri, Mississippi, North Dakota, Oklahoma, and Utah.

Every one of those states is potentially sitting on a number similar to Indiana's $655 million — or larger — without their legislatures having a clear picture of the cost.

What Happens Next in Indiana

Indiana's disclosure is the beginning of a political process — not the end of one.

Virginia's disclosure of its $1.6 billion cost led to a four-month legislative battle that ended with a new $600 million annual energy consumption tax. Ohio's disclosure is now fueling a bipartisan veto override attempt. Pennsylvania's disclosure is driving a House-passed digital advertising tax and bipartisan exemption repeal push.

Indiana's $655 million disclosure — forced by investigative journalism rather than voluntary government transparency — will almost certainly prompt legislative attention in the 2027 session. The question is whether Indiana follows Virginia's energy tax model, Ohio's repeal push, or a third path uniquely suited to its political environment.

Indiana's governor is a Republican. Its legislature is Republican-dominated. The political dynamics are different from Virginia's intra-Democratic fight. But the fiscal pressure is the same — and the "we didn't know how much it cost" defense is no longer available now that the number is public.

The "Giant Transfer of Wealth" Argument

The framing that has gained the most traction among critics of data center exemptions is blunt — and worth understanding.

There was a giant transfer of wealth from taxpayers to shareholders, said Greg LeRoy, executive director of Good Jobs First. Some states, like Virginia, are headed toward billion-dollar annual losses.

The counterargument from the industry is equally direct. When lobbying for sales tax exemptions, advocates have said that data centers are a key driver of economic growth — pointing to jobs created, investment generated, and local tax revenue from sources not covered by the exemption.

In Indiana's case, the industry argues that the state is not writing companies a check — rather, the exemptions are part of a competitive framework designed to attract major investment that may not otherwise come to Indiana.

But Good Jobs First's position is that money not collected is still a public cost. A dollar of tax that isn't paid is a dollar that doesn't go to schools, roads, or public services — regardless of whether it shows up as a line item in the budget.

Both arguments are legitimate. The difference in 2026 — versus 2019 when Indiana's exemption passed — is that the cost is now quantified. And quantified costs invite scrutiny in ways that abstract projections never do.

What Indiana Businesses and Data Center Operators Need to Know

For data center operators currently benefiting from Indiana's exemption, the disclosure doesn't change anything immediately. The exemption remains in place. The 7% state sales tax on qualifying equipment and energy purchases is still waived for qualifying facilities.

But the political environment has changed. The 2027 Indiana legislative session will almost certainly include proposals to modify, cap, or add new revenue requirements to the exemption — following the Virginia, Ohio, and Pennsylvania models. Operators who planned their Indiana investments around a 50-year exemption should be modeling what a Virginia-style energy consumption tax or an Ohio-style repeal of construction materials exemptions would mean for their long-term cost structure.

For businesses generally: Indiana's disclosure is a reminder that data center tax exemptions — and their costs — are being dragged into public view across the country. States that have been quiet about their exemption costs are facing increasing pressure from watchdog groups and investigative journalists to publish what Indiana just published under duress.

The era of invisible data center subsidies is ending. Whatever replaces them — modified exemptions, new consumption taxes, caps, conditions, or outright repeal — will shape the data center tax landscape for the next decade.

Operating a data center in Indiana or evaluating Indiana for future investment? Book a free consultation with our team at sales.tax. We'll help you understand your current exemption status, model the compliance implications of potential legislative changes, and prepare for whatever Indiana's 2027 session brings.