A number of states have adopted tax policies that provide favorable consideration to disabled veterans. These polices either reduce or eliminate taxes on the property, income and consumption activities of qualifying participants. The exemptions vary in size and scope and in some cases eligibility is tied to the amount of the disabled veteran’s income or the value of his property.
The relaxation of property taxes is one of the most common methods by which states provide tax incentives to disabled veterans. Several states have laws that allow veterans to pay a reduced property tax subject to the value of his property not exceeding an established amount. Pennsylvania has perhaps one of the most aggressive property tax exemption laws benefiting disabled veterans. It states that 100 percent disabled veterans are exempt from paying all real estates taxes on property occupied by the veteran as his principal residence. Indiana disabled veterans may qualify for an up to $12,480 reduction in property taxation if the assessed value of the property does not exceed state guidelines. Disabled Texas veterans are eligible for a property tax exemption of up to $12,000 on the value of one property.
Disabled veterans in Oklahoma may qualify for a complete sales tax exemption on up to $25,000 per year of expenditures. This essentially makes Oklahoma a sales tax-free state for disabled veterans who meet certain legally established standards. The State of Georgia provides veterans with an exemption on the sales tax that must be paid when purchasing a vehicle.
Several states provide income tax benefits to veterans. The State of Maryland allows retired military veterans to earn up to $5,000 of income completely tax free from the state’s income tax. Arkansas provides an state income tax exemption on the first $6,000 of income provided the pay is either service pay or retirement pay from the military. Alabama completely exempts military retirement pay from state, county and municipal income taxes.
Other Fees and Taxes
Oklahoma law waves the fee for gun hunting licenses during deer hunting season provided the applicant is a disabled veteran. Oklahoma also provides these veterans with free admission to state parks and museums, reduced fees on auto tags and exemptions on excises taxes.