March 31, 2014

Indiana Legislation Protects Military Personnel From Property Tax Increases During Deployment

Senate Enrolled Act 367, signed by Indiana Gov. Mike Pence on March 26, includes a provision to prevent active duty military personnel from experiencing substantial and burdensome increases in property tax bills on their Indiana homes while they are deployed or transferred elsewhere.

In late 2013, attorneys Brent Auberry and Joe Smith of Faegre Baker Daniels became aware that military personnel lose the Indiana homestead deduction and the 1 percent property tax cap for a primary residence when they receive orders to transfer out of state and Indiana is no longer their principal place of residence. The deduction reduces a property's assessed value by as much as 60 percent. Losing it creates a significant financial burden for service members who desire to own homes but cannot control when they will be required to move.

Auberry and Smith have lobbied the Indiana General Assembly on property and sales tax matters for more than a decade. They represented the Military Officers Association of America's Indianapolis Chapter (MOAA) on a pro bono basis in working to allow active duty military members to retain their homestead deduction and 1 percent property tax cap if ordered to another state. The provision was signed into law as part of Senate Enrolled Act 367 and will take effect on July 1, 2014.

"Our service members are often forgotten heroes," Smith said. "They sacrifice so much to protect our freedom, and as a state and a nation, we should do whatever we can to prevent them from struggling with unnecessary burdens like this one. Brent and I were happy to use our combined tax and government experience to give back to our military in this way."

Rep. Randy Truitt of Lafayette recognized the value in the proposal and was instrumental in shepherding it through the legislature.

"This bill has a very minor fiscal impact for the state, but a significant effect on the lives of our active duty military personnel," Truitt said. "I'm pleased that we could give our service members greater peace of mind when pursuing the American dream of homeownership in Indiana."

The pro bono practice at FaegreBD is centered on a shared vision of service to our communities. The firm's pro bono priorities include service to persons with disabilities, survivors of domestic violence, children and families, and veterans, among others.

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