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Committee considers HB 10-32 to allow military retirees fuller use of standard retirement exemption; vote postponed
Summary
HB 10-32 would let taxpayers with military retirement or survivor benefits use the standard $6,000 retirement exemption to the extent military benefits fall short of $6,000, costing the state an estimated $34,000 (partial year) and $68,000 annually; the committee held the bill for a later vote.
Senator introduced HB 10-32 to amend income tax law so taxpayers receiving military retirement or survivor benefits could claim the full standard retirement exemption if their military benefits are less than $6,000. The sponsor said under current law taxpayers must choose between the $6,000 exemption or a military-retirement exemption; the bill would allow those with less than $6,000 in military retirement benefits to claim the difference up to the $6,000 cap.
The sponsor and DFA staff said the change would reduce state revenue by about $34,000 in the first partial year and about $68,000 annually thereafter and would benefit roughly 700–800 military-retiree taxpayers. Paul Gehring (DFA) told the committee the governor's budget included $50 million in income-tax reductions and that this measure was in DFA's legislative packet and accounted for in the governor's balanced budget. Committee members discussed whether the $50 million referenced was a surplus transfer and how other small line items were handled. The chair said the committee would hold HB 10-32 and return later for a vote.
