Tax bill to exempt military pay for retirees dies
March 22, 2016
A bill that would have provided military retirees with a 100 percent state income tax exemption died after failing to make it through the Utah Legislature’s House Rules Committee.
Coalville resident and 88-year-old retired Lieutenant General Hal Hardin, who has been an advocate for the measure, referred to the effort as "a sham and a farce." Hardin traveled to Salt Lake City to voice his support and said he felt as though his testimony was dismissed.
"Everything went downhill and it became obvious to me when I was in front of that committee that they were just interested in getting through our statements," Hardin said. "I felt sorry for a couple of them (veterans) that testified. They were World War II veterans, older than I was, and were basically cut off after two minutes."
Hardin said he was disheartened about the bill’s lack of support and doesn’t wish to be associated with it any more "unless a sponsor someone in the Legislature is willing to spend the appropriate time with it."
Rep. Lee Perry, a Republican from Box Elder County, sponsored the measure which would have made military retirement pay for service within the armed forces exempt. Retirees are defined as veterans who receive compensation for a minimum of 20 years of service or more.
Perry said the bill’s lack of movement was also frustrating for him, especially after the veterans, including Hardin, testified in favor of it.
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"When he came in he got up and said, ‘This isn’t going to benefit me and I don’t even want it. I don’t need it. I’m asking for this for the future generations,’" Perry said. "That’s why I have a great deal of respect for him. He was asking for our enlisted men and those who keep our country free. I truly appreciated his testimony and will continue to fight for this."
Utah is one of seven states that do not have any form of a military tax exemption. Ten states have minimal and eight states have limited exemptions, while 16 states have full income tax exemptions. Nine states don’t have an income tax, according to the Utah Department of Veterans and Military Affairs.
It appeared legislators’ hesitation to move forward concerned the economic impact to the state of granting the exemption, Perry said, adding that a 100 percent exemption would cost the state nearly $16 million.
"The Revenue and Taxation Committee, because we are flat tax state, some of them do not like to give breaks," Perry said. "While we do pass them and sometimes they make it through, sometimes they don’t. I think the committee as a whole is supportive of the military personnel, but can we really make up the difference if we give this benefit or at least reach a balance or an economic benefit to the state. That is the question."
HB 99 has now been sent for interim study for more data to be gathered concerning the economic impact of the exemption, Perry said.
"We will have constituents reaching out to other states who have passed this legislation so we can look at the experiences of other places," Perry said. "Ohio just did it a couple of years ago and have had roughly 6,000 retirees who have moved in. And what I’m saying is I think we can get these people to buy houses and buy cars. We won’t be able to do it all at one time, but maybe we can do it incrementally."
Over the next several months, Perry said an interim committee meeting will be scheduled to start reexamining the issue and pitching the measure to legislators again.
"This is just one of those situations where there is an economic and patriotic side to it," Perry said. "If we can pull it off we can do both things at once. We can make this thing happen and say, ‘yes we appreciate your service and we know you will bring money into the state.’"
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