Proposition 9 – Disabled Veteran Tax Amendment

TEXAS – Proposition 9 – SJR 29

Brief background information: (provided by the Texas Legislative Council)

The Texas Constitution provides some partial exemptions to the requirement that all real or tangible personal property is subject to taxation in proportion to its value.

The proposed amendment covers two aspects of taxation of real property of disabled veterans. It would make all or part of the residence homestead of a disabled veteran who is certified as having a service-connected disability with a disability rating of 100 percent or totally disabled exempt from ad valorem taxation.

At present, disabled veterans are grouped into categories with a range of disability ratings set by the United States Department of Veterans Affairs that are used to determine the amount of their tax examption. Those in the “not less than 10 percent” and “not more than 30 percent” disability rating, for example, are exempt from up to $5,000 of the qualifying property. The largest exemption — up to $12,000 — is for those veterans with a “more than 70 percent” disability rating. Disability ratings are “rounded to the nearest 10 percent” — including rounding down — which can result in a veteran receiving a lower exemption than if the numbers were not rounded off.

not less than 10 / not more than 30 becomes:at least 10 percent but less than 30 (tax exemption up to $5,000) more than 30 / not more than 50 becomes:30 percent but less than 50 ($7,500 property tax exemption) more than 50 / not more than 70 becomes:50 percent but less than 70 ($10,000 property tax exemption) more than 70 becomes:70 percent or more ($12,000 property tax exemption)

In addition to the 100 percent disability exemption, the proposed amendment aims to compensate for the rounding so that certain disabled veterans with rounded ratings of 30, 50, or 70 percent are moved to the next higher category, with the higher tax exemptions.

Before and After Example: Currently a 52 percent disability is rounded down to a 50 percent disability rating so the disabled veteran qualifies for the $7,500 exemption even though they are more than 50 percent disabled. Under the proposed amendment, that 50 percent disability rating qualifies the veteran for the $10,000 exemption.

Pro and Con – information provided by Jacci Howard Bear of About.com

Why Vote for Prop 9 Veterans with total disability are severely limited in their ability to earn a living. Exempting 100% of their property taxes would allow them to keep their homes in the face of rising property values.

Adjusting the tax exemption for veterans subject to the rounding of disability ratings would give those affected veterans the tax relief that the legislature originally intended when those portions of the Tax Code were first enacted.

We owe at least this much to our soldiers.

Why Vote Against Prop 9 With the rising number of disabled veterans returning from Afghanistan and Iraq, moving some veterans into a higher exemption category as well as a total exemption for those with a 100 percent disability rating will result in a significant loss in revenue for local governments.

The current $12,000 credit for totally disabled veterans coupled with a current tax freeze on certain homestead taxes is sufficient for offsetting increases in property value.

— Edited for the web by Miguel Martinez