United States veterans have a wide category of tax exemptions intended to value their services and reduce the expenses they bear. They vary considerably from state to state and may range from exemption in property, income, and sales taxes as well as automotive taxes. Many states exempt disabled veterans for outright exemption in total or partial while the remaining have multi-level exemptions based on disability, residence status, or lengths of active service. This article brushes on such significant exemptions under various states citing principal details as well as requirement factors.
100% disabled veterans’ complete property tax exemptions
Complete property tax exemptions are provided to twenty states for veterans with a 100% Permanent and Total (P&T) disability rating, as confirmed by the U.S. Department of Veterans Affairs (VA). Alabama, for example, exempts qualifying veterans from homestead and up to 160 acres of land from property taxes, with the surviving spouse retaining the exemption under certain circumstances. Likewise, Arkansas waives all property taxes for 100% disabled veterans or for those who lost an eye or a limb, including unmarried surviving spouses and dependent children.
Florida and Hawaii also fully exempt 100% disabled veterans from property taxes, while Texas exempts fully regardless of the property value. Michigan also offers homestead exemptions for veterans who are rated 100% disabled or need specially adapted housing as early as 2025 without needing to reapply annually. Oklahoma and Mississippi take it a step further by also offering surviving spouses to continue exemptions if the veteran’s death is service-connected.
Income tax exemptions for military personnel
The majority of states grant special tax treatment to military income pay and retirement. Mississippi and Arkansas exempt all military retirement pay and Survivor Benefit Plan (SBP) payments from state income tax. Colorado permits retirees under the age of 55 to exclude up to $15,000 from retirement income, with higher amounts for more veteran seniors.
Active-duty personnel stationed away from home states are usually exempted from income tax. In California, for instance, residents stationed outside of their home state have active-duty pay exempted, while Virginia allows a deduction of military retirement pay up to $30,000 in 2024, up to $40,000 in 2025. More interesting are the realities that Washington and Texas charge no state income tax whatsoever, granting a reprieve to all veterans with or without disability.
Other state-specific tax relief
In addition to income and property exemptions, states provide specialty tax relief. Kansas, in 2026, will implement a sales tax exemption for 100% disabled veterans for up to $24,000 of purchases per year (vehicles and alcohol are not included). Louisiana excludes completely disabled veterans with 100% ratings, though local taxation is possible, and cuts property taxes for 50–69% disabled veterans by $2,500.
Maine provides vehicle exemptions to totally disabled veterans, exempting them from vehicle registration and excise taxes. Virginia exempts disabled veterans, as well as their surviving spouses, from local vehicle taxes, subject to the condition that the vehicle will not be leased. Exemptions from charges on business licenses like California’s for honorably discharged veterans selling merchandise also ease financial loads.
Exemptions for veteran property taxes are a patchwork of state rules, with vast differences in both eligibility and benefit size. Veterans need to ask at local tax assessor offices and VA facilities to make sure they qualify, especially if moving or attempting to stack benefits. Indiana, for example, grants wartime veterans a 10% disability award and a $24,960 property tax exemption, but those aged 62 or older or permanently disabled can stack additional exemptions. With changes in the legislation continuing, remaining current through state veteran affairs websites provides access to the latest benefits.
Read more: Can VA disability payments be used to pay child support?
Read more: VA Medical Benefits: What are the income limits to get healthcare if you’re a veteran?
