LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6445 NOTE PREPARED: Dec 23, 2024
BILL NUMBER: HB 1255 BILL AMENDED:
SUBJECT: Property Tax Exemption for Qualified Veterans.
FIRST AUTHOR: Rep. Klinker BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides a property tax deduction for an individual, or the surviving
spouse of an individual, who has been rated by the United States Department of Veterans Affairs (VA) as
individually unemployable (IU).
Effective Date: July 1, 2025.
Explanation of State Expenditures: Department of Local Government Finance (DLGF): The DLGF will
have to modify the veterans deduction application form to accommodate the expansion of the deduction. The
bill’s requirements are within the agency’s routine administrative functions and should be able to be
implemented with no additional appropriations, assuming near customary agency staffing and resource levels.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues: Beginning with taxes due in 2026, veterans classified by the VA as IU will
be eligible to receive up to a $14,000 property tax deduction. The latest data currently available shows that
there were 641 veterans classified as IU in 2019. Applying the 70.4% Indiana home ownership rate provides
an estimate of 451 IU veteran homeowners.
Based on the estimate of 451 IU veteran homeowners, the deduction would shift about $135,000 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 $300. [This estimate will be updated after new data
concerning IU veteran counts is received from the VA.]
Additional Information - Not all veterans with disabilities that prevent them from working are classified by
the VA as Individually Unemployable. 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
HB 1255 1 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: Department of Local Government Finance.
Local Agencies Affected: 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 1255 2