Problematic Constitutional amendments introduced

January 17, 2019

A pair of Constitutional amendments, HJ 676 (Filler-Corn) and SJ 278 (Reeves), provide that one motor vehicle owned by a veteran of the U.S. armed forces or the Virginia National Guard who has a 100 percent service-connected, permanent disability will be exempt from state and local taxation.  Current Virginia Code classifies a motor vehicle owned by a veteran with certain disabilities as a separate class of personal property, which allows localities to tax such motor vehicles at a lower rate or provide a full exemption, and some localities already offer such tax relief.  This Constitutional amendment proposes to mandate the exemption for all localities.

HJ 657 (Pogge) would expand the existing mandatory real property tax exemption for the surviving spouses of disabled veterans to apply in cases in which the veteran died prior to January 1, 2011.  Currently, the exemption applies in cases in which the veteran died after that date.  This amendment has the potential to significantly expand the number of veterans who may qualify for the mandatory tax relief.

VACo has significant concerns about expanding existing mandatory tax exemption programs or adding new exemptions, as the existing mandatory real property tax exemptions (for disabled veterans and their surviving spouses and for the surviving spouses of servicemembers who are killed in action) have been a costly requirement for localities; according to a survey done by Commissioners of the Revenue, the mandatory exemptions cost local governments approximately $50 million in 2018.

HJ 676 and HJ 657 have been referred to the House Privileges and Elections Committee’s Subcommittee #4 and may be heard as early as Monday afternoon.  SJ 278 has been referred to the Senate Privileges and Elections Committee.

VACo Contact: Katie Boyle

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