INDIANAPOLIS— A new law will soon take effect that eliminates Indiana state income tax for more than 34,000 active duty military personnel, as well as Reserves and National Guard members.
HEA 1034 takes effect July 1.
“Our active-duty men and women work for peanuts and so if we can give them a couple hundred dollars a year in their pockets, that's important for us veterans because that's what we do,” said Air Force Veteran Lisa Wilken.
Veterans say they recognize it’s tough financially for young servicemen and women in Indiana.
“With the economy being so tight, every dollar counts,” said veteran Kent Morgan. “It might help some of the stress of their budget."
Veterans say they’ve been fighting for the law for 14 years.
Records show Indiana’s state tax revenue will take a $20 million loss per year as a result of HEA 1034.
However, veterans say eliminating state income tax for military personnel will keep more servicemen and women in Indiana—which will bring in more federal dollars.
“They often switch states to avoid paying that income tax,” said Brigadier General James Bauerle. “We estimate over a 10-year period we lose 10,000 to 25,000 citizens to our state. 25,000 citizens come Census time could get you an additional Congressman. 25,000 additional citizens would be a tremendous amount of federal dollars coming into our state."
Veterans say the new law will bring in more federal dollars for things like Medicaid, education and roads.
“This is about bringing Hoosiers back home, that’s what it’s all about it,” said veteran Ron Martin, chairman of the Military Veterans Coalition.
Martin said Indiana is now the 39th state to eliminate state income tax for military personnel.
"It's nice to say thanks for your service, but doggone it's time to show you mean it and this bill did that,” said Martin.
The Governor’s Office held a ceremonial signing on May 22.
Veterans Ron Martin, Kent Morgan, Lisa Wilken and Gen. Jim Bauerle are all members of the Military Veterans Coalition of Indiana and testified in support of the HEA 1034, but say they were not invited to the bill signing.
WRTV contacted the Governor’s Office, and a spokesperson told us, “Invitations to outside guests for ceremonial signings are up to the bill author."
WRTV contacted the bill’s author, Rep. Randy Frye (R-Greensburg), and we are still waiting to hear back.
"As advocates it's not about the pictures at the end, it's about the effort,” said Wilken. “The return on investment of making sure the men and women serve from Indiana making sure it's easy for them to come back to Indiana."
Wilken said military personnel in Indiana do not have to file anything to get the tax savings.
"It will happen automatically,” said Wilken. “You won't have to do anything except see your paycheck go up."
The new law does not apply to veterans who are no longer active duty.
