Committee advances bill to exempt congressionally chartered veterans groups from property tax on post buildings

The House Taxes Committee on Thursday advanced House File 195, a bill sponsored by State Representative Cindy Bennett that would exempt congressionally chartered veterans service organizations (such as the American Legion and VFW) from property taxes on buildings they own and operate. The committee laid the bill over for possible inclusion in the omnibus tax package.

Barry Hendrickson, adjutant quartermaster for the Department of Minnesota Veterans of Foreign Wars, told the committee there are 188 VFW posts statewide and that an estimated 107 still operate post homes. "Over the last 20 years, we averaged five VFWs going away completely from their communities," he said, adding property taxes are a factor in closures.

Dr. Christie Janigo, legislative chair for the American Legion Department of Minnesota, said many posts face rising costs and the proposal would align treatment of congressionally chartered organizations with exemptions available to many 501(c)(3) nonprofits. "We're asking for access to the same nonprofit property tax exemptions provided to those 501(c)(3) organizations," Janigo said.

How current law works: Nonprofit property tax treatment in Minnesota includes reduced classification rates for certain organizations; committee staff described a classification that taxes eligible properties at a 1% local rate and noted there are two classifications with different treatment under the state general levy depending on frequency of revenue‑generating activity. For properties that do more frequent revenue activity, eligibility also requires charities to donate at least an amount equal to the prior year's property tax to maintain the classification.

Local examples and fiscal concerns: Witnesses cited specific posts under strain, including an Anoka post that paid nearly $15,000 in property taxes last year. Representative Joakim and others noted that changes to property tax exemptions shift a portion of the tax burden to other property owners and asked staff for data on how many states entirely exempt veterans organizations; staff said they would supply additional information to the committee.

Formal action: Representative Bennett moved the bill and the committee laid House File 195 over for possible inclusion in the omnibus tax bill. The motion was recorded as carried by voice vote; no roll‑call tally was taken.

Next steps: If included in the omnibus, the bill would proceed through the budget and conference process. Supporters said exemption would preserve community post homes used for honor guards, local events and veterans' services; critics and some members requested more analysis of local tax shifts and fairness when posts operate revenue‑generating activities.