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Bill to exempt some veterans groups from property taxes moving through House

Messenger-Inquirer - 2/16/2021

Feb. 16—A bill that would eliminate property taxes for veterans groups that contribute more than half their income to veteran and community causes has been approved by one House committee and is waiting to be heard in another.

House Bill 14 is sponsored by Rep. DJ Johnson, an Owensboro Republican, and Rep. Matthew Koch, a Paris Republican.

The bill, which has a number of cosponsors from both parties, was approved earlier this month by the House Veterans, Military Affairs and Public Protection Committee, and is next scheduled to be heard by the Appropriations and Revenue Committee.

Johnson said Monday he is hopeful the bill will make it through the process to become law during the short legislative session.

"We have a better than 50-50 shot," Johnson said.

The bill would designate a "veterans service organization" to be a "purely public charity" and exempt from ad valorem taxes "if over 50% of its annual income is expended on behalf of veterans and other charitable organizations." The bill defines "veterans service organization" as "an organization wholly dedicated to advocating on behalf of military veterans providing charitable programs in honor and on behalf of military veterans."

Currently, veterans service organizations like the VFW or American Legion are considered private charities, subject to paying ad valorem property taxes. The bill would exempt qualifying groups from state, local, school and special district property taxes.

Downtown development in Owensboro has caused the property value of veterans groups located there there to increase, which results in higher property tax bills.

For example, the VFW 696 Post downtown saw its property value increase by 243.7% over a four-year period. In 2015, American Legion Post 9 relocated off Veterans Boulevard to Frederica Street after the value of its riverfront property nearly doubled.

"I would say Owensboro is probably the hardest hit, just because of the skyrocketing property values taking place on the river," Johnson said. "Their property taxes have increased multiple times.

"We have been looking at ways we can take a little pressure off veterans groups that serve the community as well as veterans," Johnson said.

The property tax exemption would apply only to buildings that are occupied by a qualifying veterans group. The House Veterans Committee approved the bill with an addition, which says property owned by a veterans service organization and rented out would still be subject to property taxes.

Not all veterans groups would be eligible for the tax exemption, Johnson said.

"This specifically applies to veterans groups that are reaching out and doing more," Johnson said. The exemption is for veterans "that came home and continue to want to serve," he said.

The bill has to be approved by the Appropriations and Revenue Committee because it affects tax revenue.

"I think we've got a pretty good shot" of passing the bill, Johnson said. "We have been working on this for four years now. That's not unusual for a bill."

James Mayse, 270-691-7303,, Twitter: @JamesMayse

James Mayse, 270-691-7303,, Twitter: @JamesMayse


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