SB 1535 would create the “Missouri Disabled Veteran Homestead Tax Credit Act” and authorize counties to offer an annual local property tax credit for certain disabled veterans beginning with tax years on or after January 1, 2027. The credit would be available only in counties that choose to opt in by local vote, and only to Missouri residents who are honorably separated veterans with a U.S. Department of Veterans Affairs disability rating of 100% permanent and total. The credit would apply to the veteran’s primary residence, or homestead, up to a market value cap of $500,000, with rules limiting the property to one qualified residence per owner per year and excluding commercial use portions.
The amount of the credit would generally equal the full amount of local real property taxes levied on the qualified residence, excluding the state blind pension fund levy. The bill also provides that the credit is not refundable, cannot be carried forward, and cannot be transferred. It would not reduce assessed valuation or be treated as a property tax exemption, and it is designed to preserve the security of bonded indebtedness and other tax-backed obligations. Counties could adopt procedures to administer the program, and the credit would be administered similarly to Missouri’s existing property tax credit program for certain seniors and disabled persons under section 137.1050.
The bill’s impact on state law would be to add a new section to chapter 137, RSMo, creating a new local option property tax relief program for a narrowly defined class of disabled veterans. It would also direct that, for levy and revenue allocation purposes, the amount of credit granted be treated as tax revenue actually received, while expressly stating that the credit does not alter tax rate setting or assessed valuation calculations for bonded debt purposes. The bill would further bar recipients from also claiming other property tax relief or related credits for the same residence.
General sentiment around the bill appears supportive in concept, based on its purpose of providing targeted tax relief to totally disabled veterans, but the available record contains no committee transcripts or recorded votes to show debate or formal opposition. Because the program is optional for counties and for eligible owners, the bill reflects a compromise approach that allows local control rather than imposing a statewide mandate.
The main points of potential contention are fiscal and administrative rather than ideological. Counties and local taxing jurisdictions may be concerned about reduced property tax collections, even though the bill attempts to protect bond obligations and treat the credit as revenue received for certain calculations. There may also be questions about eligibility verification, the $500,000 market-value cap, the exclusion of mixed-use or rented property, and the interaction with existing property tax relief programs that the bill would prohibit recipients from using simultaneously.
SB 1535 would add section 137.1053 to chapter 137, RSMo, creating a new local option homestead property tax credit for qualifying disabled veterans. It would authorize counties to adopt the credit by ordinance or resolution, establish eligibility and administration rules, and require that the credit not reduce assessed valuation or impair bonded indebtedness. The bill would also coordinate the new credit with existing property tax statutes by treating the credit as tax revenue received for certain levy and distribution calculations and by prohibiting recipients from receiving other specified property tax relief on the same residence.
The available materials suggest a favorable policy intent, since the bill is framed as tax relief for permanently and totally disabled veterans and there is no recorded committee opposition or vote history in the provided context. The local-option structure also suggests an effort to make the proposal more politically acceptable by leaving adoption to county governments and participation to eligible owners. However, because there are no transcripts or votes, there is no direct evidence of formal support or criticism in committee.
Likely areas of contention include the fiscal effect on county and local taxing districts, the administrative burden of verifying veteran disability status and residence eligibility, and the interaction with existing property tax relief programs. Local governments may also scrutinize the $500,000 value cap, the treatment of mixed-use or rented property, and the rule that recipients cannot combine this credit with other property tax credits for the same home. The bill attempts to address some concerns by preserving bond security and making the credit optional for counties, but those safeguards may not fully resolve revenue concerns for affected taxing jurisdictions.