PA 16-191—SB 202

Veterans' Affairs Committee

Planning and Development Committee

AN ACT CONCERNING VETERANS' PROPERTY TAXES

SUMMARY: By law, certain wartime veterans or their surviving unmarried spouses are eligible for state-mandated property tax exemptions (see BACKGROUND). A municipality, with its legislative body's approval, may provide them with an additional property tax exemption if their income does not exceed a specified amount set by the Office of Policy and Management (OPM) each year (see BACKGROUND). This act increases, from $10,000 to $20,000, the amount a municipality can provide as an additional exemption. By law, a municipality may choose to exempt up to 10% of the property's assessed value instead of a dollar amount.

By law, veterans rated by the U. S. Veterans Administration (VA) as having a disability are eligible for a larger state-mandated property tax exemption than available to wartime veterans (see BACKGROUND). The act allows a municipality to provide an additional property tax exemption to these disabled veterans with the same qualifying income levels as the wartime veteran exemption. If the municipality chooses to provide the exemption for disabled veterans, the exemption must be at least $3,000 and applied to the assessed value of the veteran's property.

Lastly, the act requires municipalities to waive the interest on delinquent property taxes owed by certain active military members serving out-of-state, rather than only by those serving in Iraq or Afghanistan.

EFFECTIVE DATE: October 1, 2016, and applicable to assessment years beginning on and after that date.

DELINQUENT PROPERTY TAX WAIVER

The act requires municipalities to waive the interest on delinquent property taxes owed by certain active military members serving out-of-state, rather than only by those serving in Iraq or Afghanistan. By law, a municipality must charge 18% annual interest (1. 5% per month) on delinquent property taxes. Prior law allowed municipalities, with their legislative body's approval, to waive this interest for any out-of-state military members.

The act does not limit the waiver to one year as under prior law for the Iraq and Afghanistan mandatory waiver and the optional out-of-state municipal waiver. But it requires any waived interest to be reinstated if the military member fails to pay the delinquent property tax after he or she returns from service and lives in the state for at least one year.

Under the act, the interest waiver applies to any state resident who is a member of the U. S. Armed Forces or their reserve components, has been called to active service, and who either (1) is serving outside of Connecticut on the final day the property tax is due or (2) has been residing in Connecticut for less than one year since returning to the state.

The act also repeals an obsolete provision allowing a property tax interest waiver for certain service members' spouses.

BACKGROUND

OPM Income Limits

OPM annually updates the qualifying income levels for the property tax exemption to reflect the amount of the Social Security Administration's cost-of-living adjustment. For the 2015 tax year, OPM set the income limits at $35,200 for unmarried veterans and $42,900 combined for married veterans.

Property Tax Exemption Eligibility

Veterans. The state-mandated veterans property tax exemption is available to state residents who are veterans of the U. S. Armed Forces (Army, Navy, Marine Corps, Coast Guard, and Air Force and any reserve component of these branches, including the Connecticut National Guard performing duty under Title 32 of federal law) and have served at least 90 days in a time of war, as shown in Table 1.

Table 1: Service in a Time of War

Operation

Date

Service Condition

World War II

12/07/1941-12/31/1947*

Active service during the war

Korean War

06/27/1950-01/31/1955

Active service during the war

Lebanon Conflict

07/01/1958-11/01/1958 or 09/29/1982-03/30/1984

Combat or combat-support role in Lebanon

Vietnam Era

02/28/1961-07/01/1975

Active service during the war

Grenada invasion

10/25/1983-12/15/1983

Combat or combat-support role in Grenada required

Operation Earnest Will (escort of Kuwaiti tankers flying U. S. flag in Persian Gulf)

07/24/1987-08/01/1990

Combat or combat-support role required in the operation

Panama invasion

12/20/1989-01/31/1990

Combat or combat-support role required in the invasion

Persian Gulf War

08/02/1990 until a date prescribed by the President or law

Active-service anywhere during the war (not necessarily in the Persian Gulf or in a combat role)

*Ending dates specified in CGS 12-86 for property tax exemptions.

Additionally, World War II veterans of certain allied armed forces are also eligible if they (1) were a U. S. citizen at enlistment and received an honorable discharge or (2) have been a U. S. citizen for at least 10 years and participated in armed conflict with an enemy of the United States (CGS 12-81(19) and 27-103).

Surviving Spouses. A property tax exemption is available to an unmarried surviving spouse of a deceased veteran who qualified for the state-mandated exemption described above. The deceased veteran must have died either during his or her term of service or after receiving an honorable discharge (CGS 12-81(22)).

Veterans with Disabilities. The law provides property tax exemptions to veterans with a VA-rated disability of at least 10% (CGS 12-81(20)). (The disability does not have to be service-related, and unlike the exemptions for non-disabled veterans, wartime service is not required to qualify. )

OLR Tracking: DC; MK: PF; bs