INDIANAPOLIS, IND. (WOWO) Indiana Senate Republicans are moving forward with a new package of tax cuts scheduled for 2026.

Senate Bill 243 passed a key legislative committee Tuesday and proposes eliminating state taxes on tips, overtime pay and interest on loans for American-made vehicles. Supporters say the bill is designed to mirror existing federal tax provisions and reduce the overall tax burden for Indiana residents.

Senate President Rodric Bray said the legislation aims to allow workers to keep more of their earnings while maintaining consistency between state and federal tax policy. According to Indiana Public Media, Republican lawmakers argue the proposal builds on a series of recent tax reductions already affecting Hoosiers.

The bill advances as Indiana’s flat income tax rate dropped again this month under a previously approved schedule. At the same time, a major property tax relief package approved by lawmakers is beginning to take effect across the state.

Senate Bill 243 now moves forward in the legislative process as lawmakers continue negotiations over the state’s broader fiscal priorities for the coming year.