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HB 492 - Disabled veteran property tax reduction

HB 492 - Disabled veteran property tax reduction

Phil Haunschild
February 12, 2018

Bill description: This bill would exempt from paying property taxes veterans who are 100 percent disabled.

Rating: 0

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments? 

HB 492 would exempt veterans, who are 100 percent disabled, from paying property taxes on their primary residence, up to $1,320. This amount could not exceed their total property tax liability.

It is difficult to qualify for a military service-related disability rating of 100 percent. To qualify, a veteran must have been disabled during the course of her service such that it renders a mental or physical faculty debilitated. Should a veteran receive multiple disabilities (e.g., a back injury and PTSD) that were both rated at 50 percent, the individual would not be entitled to the full 100 percent disability rating simply by adding the two ratings together. Rather, after taking the first disability into account, the second disability rating would be calculated using the remainder of the veteran’s capabilities, granting them a total of 75 percent. In short, to receive a full 100 percent disability rating, a veteran must be severely debilitated, to the extent that work is nigh impossible.


Does it increase government redistribution of wealth? Conversely, does it decrease government redistribution of wealth? 

The Fiscal Note for HB 492 estimates that there are as many as 960 veterans in Idaho who would qualify for this new exemption, at an average of $900 in property tax relief. There is another group of veterans who already qualify for a partial reduction in their property taxes through Idaho’s circuit breaker program. The new program created under this legislation would exempt the remainder of their property taxes, provided the additional amount does not exceed $1,320. The new exemption would reduce total property tax collections across all Idaho counties by roughly $1.1 million per year. The reduction in revenue to counties and taxing districts would be offset by transferring sales tax revenue equal to the amount lost in property taxes to each county.

To exempt a select group from Idaho property taxes and reimburse counties with sales tax revenue, HB 492 would transfer money from all who have paid the state sales tax in order to give a benefit to a small, select group of individuals.


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