The bill would make it a misdemeanor punishable by up to a year in jail to commit "an act ... with the intent to harm" a business on the property.
Bill sponsor Sen. Travis Holdman, R-Markle, said a few hours after the House debate that he wouldn't try to advance another version of the legislation.
Holdman said the bill was meant to protect factories, farms and other businesses from those who violated the owner's property rights.
"I don't think we really want to go to that place in our culture where we turn vigilantes loose with cameras going around doing the work of police and regulatory agencies," Holdman said.
House opponents of the bill called it a "gag all" measure that intruded on freedom of speech rights.
"People who are doing this and trying to whistleblow on danger should be rewarded for protecting lives, not threatened," said Rep. Patrick Bauer, D-South Bend.
Rep. Thomas Saunders, R-Lewisville, said he worried the bill's provisions would make it illegal to visit a constituent in a nursing home and take photos if he saw unsafe conditions.
Rep. Bill Friend, R-Macy, disputed the contention that customers at a restaurant or retail business could face criminal charges, but said he withdrew the bill he sponsored at the request of Republican House Speaker Brian Bosma.
Earlier, Sen. Tim Lanane, D-Anderson, said he was troubled that the bill didn't protect people who did nothing misleading with the photos or videotapes.
"We ought not put people in jail for taking pictures, especially if the picture shows nothing but the truth, and if knowing the truth is in the public interest," Lanane said.