Bills › 90th General Assembly
Relating to the military service property tax exemption and credit and including applicability provisions
Sponsored by the House Veterans Affairs Committee
Topics:TaxesProperty taxes
Where it is now
- Done: IntroducedJanuary 12, 2023
- Done: SubcommitteeJanuary 12, 2023
- Done: House committeeJanuary 25, 2023
- Stopped: Passes the HouseDied when the General Assembly ended
- Next: Senate committee
- Next: Passes the Senate
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2024 session adjourned on April 19, 2024, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary Eligible veterans would receive a larger property tax exemption, which increases to $4,000 for everyone who qualifies. This change affects veterans who served in World War I and those who were honorably discharged during other specific time periods.1
Read the official explanation
This bill relates to the military service property tax exemption and credit. Under current law, veterans of World War I are entitled to a property tax exemption of $2,778 in taxable value and honorably discharged veterans who served during other specific time periods are entitled to a property tax exemption of $1,852 in taxable value. The bill increases the exemption amount for all eligible veterans to $4,000.92 per $1,000 of assessed value of the exempt property.7 provides that if a state appropriation made to fund a credit or exemption is not sufficient to fully fund the credit or exemption, the political subdivision shall be required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by the state appropriation. 92 per $1,000 of assessed value of the exempt property. The bill applies to property taxes due and payable in fiscal years beginning on or after July 1, 2023.
House subcommittee
Named January 12, 2023 (as HSB 22). On January 18, 2023 it recommended passage. Vote Total: 3-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
AI summary This bill increases the property tax exemption for most veterans and their survivors from $1,852 to $4,000. For fiscal year 2024, this change is estimated to increase State General Fund appropriations by $1.8 million for the military service tax exemption and $1.4 million for school aid. Additionally, the bill is expected to reduce local government property tax revenue by $5.4 million.3
Read the fiscal note
Description
Senate File 280 increases the value of the Military Service Tax Exemption from the current level of $1,852 of property value for most veterans and their qualified survivors to $4,000. The change is effective beginning assessment year 2022 (FY 2024).
Background
Under current law, the Military Service Tax Exemption is equal to $2,778 of property value for veterans of World War I and qualified survivors and $1,852 for all other qualified situations. The vast majority of exemption situations qualify for the $1,852 amount. The exemption reduces the amount of property value subject to property tax. At $1,852 of value and at the statewide FY 2022 average Military Service Tax Exemption tax rate of $34.03 per $1,000 of taxable value, the average exemption reduces a veteran’s annual property tax payment by about $63. The State reimburses local governments for $6.92 per $1,000 of the revenue reduction associated with the Military Service Tax Exemption. Through the action of the State school aid formula, the State also reimburses school districts for $5.40 per $1,000. At the $34.03 per $1,000 statewide average residential property tax rate, this results in $21.71 per $1,000 in unreimbursed property tax impact that is spread across all types of local governments that levy a property tax. This impact results in reduced local government property tax revenue.
Assumptions
- The number of taxpayers claiming the Military Service Tax Exemption is estimated at 121,624 for FY 2023 and 117,365 for FY 2024.
- The average tax rate for property subject to the Military Service Tax Exemption for FY 2023 is calculated to be $34.03 per $1,000 of taxed value. That tax rate is assumed to remain constant for future years.
Fiscal Impact
The Bill increases the current property tax reduction available to qualified veterans, beginning with FY 2024 (taxes payable in the fall of 2023 and the spring of 2024), by an estimated $8.6 million. This reduction in property tax payments will result in an increase in two State General Fund appropriations and a decrease in overall local government revenue. The FY 2024 impact on government finance is projected to be:
- State General Fund Military Service Tax Exemption appropriation increase = $1.8 million
- State General Fund school aid appropriation increase = $1.4 million
- Local government property tax revenue reduction = $5.4 million
Going forward, the number of veterans is expected to decline each year, and this will produce a declining fiscal impact on State appropriations and local revenue.
Sources
- Department of Management property tax value and rate files
- Legislative Services Agency analysis
- Military Service Property Tax Exemption, Amount · February 15, 2023
- Military Service Property Tax Exemption, Amount · February 1, 2023
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Tried before
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90th General Assembly
Earlier and later bills are matched by wording or an identical title.
Tried before
This idea has been filed in 2 earlier General Assemblies. None got through a chamber.
- HF 2016 Relating to the military service property tax exemption and credit and including applicabi…89th General Assembly · Subcommittee recommends passage · same titleCleared committee
- HSB 644 HSB 64489th General Assembly · In committee · same titleCleared committee
- SF 485 Relating to the military service property tax exemption and credit by increasing the exemp…88th General Assembly · Approved by committee · nearly identicalCleared committee
Matched by wording or an identical title.