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Conference discusses expanding military retirement tax exemption, excluding dishonorably discharged service members
Summary
Members of a committee of conference debated amendments to expand the state tax exemption for military retirement pay and to bar benefits for those with dishonorable discharges, while the tax department warned of administrative verification challenges.
At a committee of conference meeting, senators discussed an amendment to expand the state tax exemption for military retirement pay and to exclude payments to people with dishonorable discharges.
The proposal’s sponsor urged removing the current phase-out that begins at $120,000 of adjusted gross income and ends at $175,000, and adding language to prohibit payments to people discharged for serious misconduct. “This is a tool that will make us at least competitive with the rest of the nation,” the sponsor said, arguing the exemption can help attract military retirees to fill local workforce needs.
Supporters said the exemption is intended as an economic development tool to attract veterans into occupations…
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