Tax Relief

Income Tax Relief

Cancellation of Certain Assessments and Abatement of Income Tax. Any assessment of income tax due prior to the time a person was inducted into the Armed Forces will be canceled and abated if the serviceperson was killed while a member of the Armed Forces or is receiving service-connected disability compensation. No interest is payable on refunds made under this section of the law.

Allowances, Servicepersons. Subsistence and quarters allowances, uniform and equipment allowances and mustering-out payments are not taxable to the serviceperson as income. Mileage and per diem allowances for official travel and transportation are excludable from the service income except to the extent that they exceed the travel and transportation expenses.

Deductions, Servicepersons. Income tax deduction may be claimed for insignia, swords, aiguillettes, epaulets, campaign bars, cap devices, chin straps and the cost of altering uniforms necessitated by change in rank.

Disability Pay, U.S. Government. All disability payments to veterans by reason of service in the Armed Forces are not reportable as income for income taxation purposes.

Education and Training Allowances. U.S. Department of Veterans Affairs payments made to veterans enrolled in schools and training establishments under the GI Bill are exempt from income taxation.

Grants for Motor Vehicles. Grants by the U.S. Department of Veterans Affairs for motor vehicles for veterans who lost their sight or the use of their limbs are exempt from income taxation.

Grants for Specially Adapted Housing. Grants by the U.S. Department of Veterans Affairs to seriously disabled veterans for homes designed for wheelchair living are exempt from income taxation.

Gratuity Pay, Six-Months. The six-months gratuity pay to a beneficiary of a deceased serviceperson is exempt from income taxation.

Hostile Fire Duty Pay. Exemption is same as Federal Internal Revenue Service.

Insurance Dividends, Government Insurance. Dividends and all other proceeds except interest on dividends from G. I. insurance policies are exempt from income taxation.

Retired Pay. The following is exempt from income taxation: Any amount, not to exceed $4,000, received by a taxpayer during any year as retired or retainer pay as a result of service in any of the Armed Forces of the United States.

Property Tax Relief

Certain Vehicles. A motor vehicle owned by a disabled veteran that is altered with special equipment to accommodate a service-connected disability. As used in this section, disabled veteran means a person as defined in 38 U.S.C. § 101(2) who is entitled to special automotive equipment for a service-connected disability.

Specially Adapted Housing. Disabled veterans who receive U.S. Government assistance under Title 38, United States Code Annotated for the acquisition of specially adapted housing are eligible for an exclusion from ad valorem taxation on the first $38,000 in assessed value of housing together with the necessary land therefore which is owned and used as a residence by the disabled veteran.

Veterans Organizations. Real and personal property belonging to veterans organizations as defined by statute shall not be listed, appraised, assessed, or taxed for ad valorem purposes.