Bill making totally disabled veterans’ property tax exemption retroactive advances

A bill designed to make property tax exemptions for totally disabled veterans retroactive to the date the U.S. Department of Veterans Affairs (VA) determines their disability status advanced today out of the Senate Community and Urban Affairs Committee.

“Our veterans, who have sacrificed so, much shouldn’t lose money over a technicality,” said Senator Patrick J. Diegnan Jr., who sponsored the bill. “This legislation will right that wrong.”

Diegnan’s bill is intended to address the sometimes lengthy period it takes the VA to determine a veteran’s total disability. Such a determination could take several years to certify, which results in the veteran paying property taxes for those years despite being eligible for an exemption.

“Within that time frame, they still have to pay property taxes that would have otherwise been exempt,” Diegnan said. “A veteran deemed to have been disabled in 2018 but who did not receive their determination until 2020 should have those years of payments returned to them.”

Under Diegnan’s bill (S131), a municipality would be required to reimburse all property taxes a totally disabled veteran who had been awaiting VA certification paid. In addition, the state would reimburse each municipality an amount equal to 102 percent of the amount of any veterans’ property tax reimbursement granted in that municipality, as reported by its tax assessor.

Current law permits, but does not require, a municipality to refund the property taxes a veteran who becomes certified as 100 percent disabled paid prior to the certification of his or her disability status. Many municipalities do not issue refunds, which results in the veteran having to pay property taxes for years in which those payments should not have been required.

According to the latest U.S. Census, 322,000 veterans were living in New Jersey in 2019. Approximately 14,000 disabled veterans and surviving spouses received a full property tax exemption in 2021, according to the New Jersey Division of Taxation.

New Jersey is one of 17 states nationwide that gives a property tax exemption for totally disabled veterans.

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