HB1139 would create a refundable Colorado income tax credit for honorably discharged veterans with a service-connected disability rating of at least 10% who own and occupy a primary residence in the state. Beginning with tax years starting on or after January 1, 2026, the credit would equal a percentage of the property tax paid on the veteran’s primary residence, with the percentage tied to the veteran’s disability rating. The credit ranges from 10% of property tax paid for veterans rated 10%–19% disability up to 100% for veterans rated 100% disability.
To claim the credit, an eligible veteran would apply to the county assessor by September 1 and submit a U.S. Department of Veterans Affairs decision letter showing the disability rating. County assessors would determine eligibility, calculate the credit amount, and issue a tax credit certificate, while the Division of Property Taxation and the Department of Military and Veterans Affairs would develop the application and instructions. The bill also allows a surviving spouse or legal dependents to continue claiming the credit after the veteran’s death, subject to specified conditions, and makes the credit refundable and indefinite in duration.
Impact
The bill would add a new section to Colorado’s income tax code, creating a new refundable tax expenditure for qualifying veterans and establishing a county-administered certification process. It would affect the Department of Revenue, county assessors, the Division of Property Taxation, and the Department of Military and Veterans Affairs by assigning administrative, reporting, and verification duties. It would also create a new ongoing state revenue impact through reduced income tax collections and potential refunds, while indirectly reducing the net property tax burden for eligible veterans on their primary residences.
Sentiment
The available vote history suggests the bill did not have broad support in committee. House Finance approved an amendment unanimously, but then voted 10-3 to postpone the bill indefinitely, and also voted 10-3 against referring it to Appropriations. That pattern indicates some support for refining the proposal, but overall committee sentiment was negative enough to stop the bill from advancing. No committee transcript is available here, so the record reflects the votes more than any detailed debate.
Contention
The main point of contention appears to have been whether the state should create a new refundable tax credit tied to property taxes for veterans, which would reduce state revenue and add administrative complexity. Supporters likely viewed it as targeted tax relief for disabled veterans and their families, while opponents in committee were not persuaded to move it forward, as shown by the vote to postpone indefinitely. The bill’s structure may also have raised practical questions about county assessor verification, documentation of disability ratings, and the ongoing cost of a credit that continues indefinitely and can be claimed by surviving spouses or dependents.