HB 118 — Disabled Veterans Tax Relief Bill.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2025 H 21 HOUSE BILL 118 Committee Substitute Favorable 3/18/25 Short Title:

Representatives Campbell, Loftis, Schietzelt, and Chesser (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Homeland Security and Military and Veterans Affairs, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House February 17, 2025 A BILL TO BE ENTITLED AN ACT TO INCREASEMODIFY THE DISABLED VETERAN PROPERTY TAX HOMESTEAD EXCLUSION AMOUNT.TO EXCLUDE FROM TAXATION THE PERCENTAGE OF APPRAISED VALUE OF A PRIMARY RESIDENCE OWNED BY A DISABLED VETERAN THAT IS EQUAL TO THE VETERAN'S DISABILITY RATING.

– A permanent residence owned and occupied by a qualifying owner is designated a special class of property under Article V, Section 2(2) of the North Carolina ConstitutionandConstitution istaxableinand accordancewithis thissection.Thefirsttaxable forty-fivesixty-onethousandin dollarsaccordance ($45,000)with ($61,000)this ofsection. appraised value of the residence is excluded from taxation.

The first forty-five thousand dollars ($45,000) of appraised value of the residence is excluded from taxation.

The amount excluded from taxation is as follows:

(1) Disabled veteran exclusion.

– For a disabled veteran, the exclusion amount is the product of (i) the appraised value of the residence and (ii) the percentage of the qualifying owner's disability rating, as determined by the United States Department of Veterans Affairs.

(2) Surviving spouse exclusion.

– For the surviving spouse of a disabled veteran, the exclusion amount is equal to the greater of (i) the amount excluded under subdivision (1) of this subsection as of the date of the disabled veteran's death or (ii) the first forty-five thousand dollars ($45,000) of appraised value of the permanent residence, provided that the applicant establishes eligibility for such exclusion by providing certification from the United States Department of Veterans Affairs that, as of January 1 preceding the taxable year for which the exclusion is claimed, the veteran's death was the result of a service-connected condition.

–Aveteranofanybranchofthe ArmedForcesoftheUnited States whose character of service at separation was honorable or under honorable conditions and who satisfies one of the following requirements:requirements:has received a certification by the United States Department of Veterans Affairs indicating that, as of January 1 preceding the taxable year for which the exclusion allowed by this section is claimed, the veteran has been assigned a *H118-v-1* General Assembly Of North Carolina Session 2025 disability rating of fifty percent (50%) or greater for a service-connected condition.

The veteran has received a certification by the United States Department of Veterans Affairs or another federal agency indicating that, as of January1precedingthe taxable yearfor whichthe exclusion allowed by this section is claimed, he or she the veteran has a service-connected, permanent, and total disability.

(2)… Repealed(e) byOther SessionMultiple LawsOwners. 2009-445, s.

22(c),– effectiveThis forsubsection taxesapplies imposedto forco-owners taxablewho yearsare beginningnot onhusband orand afterwife. July 1, 2009.

(3)Each Permanentco-owner residence.of a permanent residence must apply separately for the exclusion allowed under this section.

–When Definedone inor more co-owners of a permanent residence qualify for the exclusion allowed under this section and none of the co-owners qualifies for the exclusion allowed under G.S.

105-277.1, each co-owner is entitled to the full amount of the exclusion allowed under this section.

The exclusion allowed to one co-owner may not exceed the co-owner's proportionate share of the valuation of the property, and the amount of the exclusion allowed to all the co-owners may not exceed the exclusion allowed under this section.property.

When one or more co-owners of a permanent residence qualify for the exclusion allowed under this section and one or more of the co-owners qualify for the exclusion allowed under G.S.

105-277.1, each co-owner who qualifies for the exclusion allowed under this section is entitled to the full amount of the exclusion.

The exclusion allowed to one co-owner may not exceed the co-owner's proportionate share of the valuation of the property, and the amount of the exclusion allowed to all the co-owners maynot exceed the greater of the exclusion allowed under this section and the exclusion allowed under G.S.

(4)(f) PropertyApplication. tax relief.

– DefinedAn inapplication G.S.for the exclusion allowed under this section should be filed during the regular listing period, but may be filed and must be accepted at any time up to and through June 1 preceding the tax year for which the exclusion is claimed.

105-277.1.An applicant for an exclusion under this section must establish eligibility for the exclusion by providing a copy of the veteran's disability certification or evidence of benefits received under 38 U.S.C.

(4a)§ Qualifying2101.certification." owner.SECTION 2.

– An owner, as defined in G.S.

105-277.1, who is a North Carolina resident and one of the following:

a.

A disabled veteran.

*H118-v-2* General Assembly Of North Carolina Session 2025 b.

The surviving spouse of a disabled veteran who has not remarried.

(5), (6)Repealed by Session Laws 2009-445, s.

22(c), effective for taxes imposed for taxable years beginning on or after July 1, 2009.

(7) Service-connected.

– Defined in 38 U.S.C.

§ 101.

…." SECTION 2.

Page 2 House Bill 118-Second118-First Edition