Oklahoma committee recommends approval of sales tax break for veterans

A bill that would keep vehicle purchases from counting toward sales tax exemption limits for disabled veterans was given a do pass recommendation Wednesday from the Oklahoma Senate Appropriations Committee.

Currently veterans who are 100% disabled in Oklahoma receive a sales tax exemption up to $25,000 a year. Surviving spouses of disabled veterans who have not remarried receive a tax exemption up to $1,000 each year.

House Bill 3050 would exempt veterans who are 100% disabled from the 1.25% sales tax on vehicles in the state. It also would ensure the exemption for a vehicle purchase would not count toward their annual limits for the sales tax exemption.

Based on the disabled veterans exemption during fiscal year 2021, the state could lose $577,812 in tax revenue in fiscal year 2023 and $859,217 in fiscal year 2024, according to the bill. It would cost the Oklahoma Tax Commission $28,850 to implement the change.

“This probably wasn’t intended to deprive them of their sales tax exemption but if they buy a vehicle, it pretty much uses up their entire exemption for that year and this will exempt them from that,” Sen. Frank Simpson, R-Springer, said

If passed and signed into law by Gov. Kevin Stitt, disabled veterans can use the sales tax exemption for one vehicle purchase every three years. The only exception would be if the vehicle was a replacement for another one that was destroyed or totaled, according to the bill summary.

The bill passed the House of Representatives last month.

The committee also recommended approval of House Bill 1800, which would give Oklahoma service members up to 10 years to use their state tuition benefits. Veterans now have five years after being discharged to use this benefit.

“Our original goal was to try to take it to 15, but after some negotiations with higher [education] and we compromised on the 10-year timeframe,” Simpson said. “The reason for that: if they are working and trying to raise a family, it’s kind of hard sometimes to finish a four-year degree plan within five years, so we’re just giving them enough time to be able to complete their degree plan.”

The bill also would allow for the veteran, their spouse or their child to be eligible for in-state tuition if the service member has been stationed for more than one year in Oklahoma any time in the previous 10 years before the date of enrollment.

This article was originally posted on Oklahoma committee recommends approval of sales tax break for veterans