LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6234 NOTE PREPARED: Nov 22, 2023
BILL NUMBER: HB 1038 BILL AMENDED:
SUBJECT: Property Tax Exemption for Qualified Veterans.
FIRST AUTHOR: Rep. Klinker BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides a property tax deduction for an individual or surviving spouse
of a veteran who has been rated by the United States Department of Veterans Affairs as individually
unemployable.
Effective Date: July 1, 2024.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures: County Auditors: County auditors will have to modify forms and
policies to accept and process applications for the new deduction. This requirement constitutes an additional
workload on county auditors but is within their routine administrative functions and would be implemented
with existing staff and resources.
Explanation of Local Revenues: Deduction: Beginning with taxes due in 2026, an estimated 454 veterans
classified by the U.S. Department of Veterans Affairs as Individually Unemployable (IU) will be eligible to
receive up to a $14,000 property tax deduction. The deduction would shift about $150,000 in property taxes
from IU veterans to all other taxpayers. Local units could also experience a slight reduction in revenue due
to an increase in tax cap losses, although the impact is expected to be minimal. Individuals receiving the
deduction will see an average savings of approximately $330.
Additional Information - Not all veterans with disabilities that prevent them from working are classified by
HB 1038 1 the VA as Individually Unemployable (IU). IU status may be granted to veterans who do not qualify for
disability compensation at the 100% rate on the basis of their service-connected disabilities alone, but meet
a threshold rating and are unable to maintain substantially gainful employment. IU veterans receive the same
amount of money as a veteran with a 100% rating, but IU status will be revoked if the person in question
takes a regular job. Veterans who receive a 100% disability rating on the basis of their service-connected
disabilities alone are not considered IU.
State Agencies Affected:
Local Agencies Affected: County auditors; Local civil taxing units and school corporations.
Information Sources: Local Government Database; US Census Bureau; US Department of VA
Compensation by County, provided by Lisa M. Goebel, Indianapolis VA Regional Office.
Fiscal Analyst: Bob Sigalow, 317-232-9859.
HB 1038 2