MN Senate Bill Would Extend Tax Benefits for Veteran Spouses

Credit: https://dva.state.wi.us/Pages/benefitsClaims/Financial-Tax-Benefits.aspx

Current homestead market value exclusion law only covers the surviving spouse of a disabled veteran for eight years

St. Paul, MN – The MN Senate is looking to extend property tax benefits for the surviving spouses of disabled veterans with a new bill, Senate File 84.

In 2008, Minnesota passed legislation that offered disabled veterans a homestead market value exclusion. The program provided a tax benefit through reducing the value of the disabled veteran’s home for property tax purposes. Depending on the level of disability, veterans were able to quality for up to a $300,000 valuation exclusion.

The current legislation also offered the tax benefit to the surviving spouse of a deceased veteran enrolled in the program, but only for eight years after the veteran’s death. Surviving spouses of servicemen who died in the line-of-duty also received the same limited provision.

Minnesota State Sen. Andrew Lang (R-17), chief author of the new bill, doesn’t think there should be an eight year limit on the tax benefit for surviving spouses.

“Personally, I’d like to think it fixes a problem that we created on our own. We just didn’t really realize it existed until we passed the law of homestead exclusion the first time,” Lang said.

With Lang’s bill, there would be no expiration date on the tax benefit, and the surviving spouse of a deceased, disabled veteran or servicemember would be able to receive the tax benefit until they sell, transfer, or dispose of the property. It also is retroactive, allowing the spouse of a deceased, disabled veteran to apply for the program up to two years after the passing of their spouse.

According to the House Research Department, excluding all or a portion of the value of the disabled veteran’s home from property taxes slightly increases the taxes on other properties in the taxing jurisdictions where the veteran’s home is located. However, Lang explained the increase is miniscule.

“It’s very low costs. The highest dollar values I had in the files is 7/10ths of a percent with many counties coming in well below that,” he said. “The Association of Minnesota Counties is behind it.”

Lang thinks the low cost is a worthy contribution to something so significant for the families of those who served our country.

Legislators on both sides of the aisle recognize the need to eliminate the eight-year limit on the exclusion. Senate DFL members have proposed similar bills. Lang is confident legislation will be passed to extend the benefit.

“There is broad support with all the veterans committees and veterans groups. I haven’t heard a single word of push-back,” he said.

Lang’s bill cleared the Committee on Veterans and Military Affairs Finance and Policy last week. The Committee on Taxes will hold a hearing for the bill before it gets sent to the Senate floor.