Soldiers, vets should pay no state tax, Pawlenty, lawmakers say

01/08/2007

Soldiers, vets should pay no state tax, Pawlenty, lawmakers say
By Mark Brunswick, Star Tribune
Last update: January 08, 2007 – 4:29 PM


Minnesota's soldiers and veterans would receive a 100 percent exemption from paying state income taxes on their military pay and pensions under a proposal announced today, part of a broad package of legislation to support the state's veterans and active members of the military.

The exemption will cover current members of the military, military retirees and their survivors. It will also cover the pay of active duty service members who claim Minnesota as their state of residence.

The exemption will be phased in over a four-year period and is expected to save veterans and military members $16.5 million in state income taxes in the next two-year budget period.

The exemption could ultimately affect more than 33,000 members of the military and their survivors, including Guard and reserve members.

The proposal, announced by Gov. Tim Pawlenty and endorsed by DFLers in the House and Senate, also would supplement the federal GI Bill by providing eligible veterans and dependents $1,000 per semester for up to five years to defray education costs. The money is expected to be a bridge for other veterans' benefits financial aid. As many as 7,000 veterans and 600 spouses and dependents could apply to receive assistance.

The package was part $74.8 million veteran and military proposal.