LANSING, Mich. — Legislation introduced by Sen. Jon Bumstead on Wednesday would reform Michigan’s property tax exemption for 100% disabled veterans by shifting the tax burden from local units of government to the state Department of Treasury.
Senate Bills 783 and 784 would maintain the same level of tax relief for 100% disabled veterans but would transform the benefit from a property tax exemption to an income tax credit in order to ease the burden on local governments.
“It is important for our 100% disabled veterans to understand this reform will not affect the amount of property tax credit they could receive, the process that they apply for their credit, or force them to pay their property taxes up front,” said Bumstead, R-Newaygo. “From an eligible veteran’s perspective, effectively nothing changes.
“Local governments are under financial stress, and the goal is to simply put the burden of administering the credit and reimbursing local governments for exempt property taxes on the state. This will provide cities, villages, townships, and counties financial relief while maintaining the current benefits that veterans receive.”
The process for eligible veterans to claim their credit would continue unchanged — a veteran or their spouse would file an affidavit with their local unit of government to claim the exemption, which would then defer property tax collection until the Department of Treasury dispenses payment for reimbursement.
Upon a payment by the state, the local unit shall provide written notification to the individual who filed the affidavit explaining the payment or rejection by the state, as well as any additional amount that may be due and the subsequent due date.
SBs 783-784 were referred to the Senate Finance Committee for review.