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Sales Tax Benefits for Veterans

  • Nov 11, 2013 | Gail Cole

 Memorial to U.S. soldiers killed in Iraq.

Many states thank veterans for their dedication and service with tax breaks and credits. Property tax exemptions are common, as are earned income tax credits. A number of states offer some sales tax exemptions, as well.

States that offer some type of sales tax exemption for active service members or veterans include the following:

  • California allows a use tax exemption for active service members and their families on out-of-state purchases made “prior to their transition orders.” For example, a service member who purchases a vehicle in Texas and then is transferred to California will not have to pay use tax on the purchase of that vehicle.
  • Georgia allows disabled veterans who receive “a VA grant for the purchase and special adapting of a vehicle” to purchase that vehicle exempt from sales tax.
  • Massachusetts allows a sales tax exemption on purchases of motor vehicles by disabled veterans who possess a Disabled Veteran plate and who purchase the vehicle “for personal, non-commercial use, on or after November 1, 2006.”
  • In New York, veterans and active service members may purchase certain military decorations exempt from sales tax.
  • Oklahoma allows 100% disabled veterans to claim a sales tax exemption; “sales qualifying for the exemption are limited to $25,000.00 per year.” Surviving spouses of 100% disabled veterans are also eligible for that sales tax exemption, although the spousal exemption is limited to $1,000.00 per year. There’s a caveat. Surviving spouses lose the exemption if they remarry.
  • Motor vehicles purchased by disabled veterans are exempt from sales tax in Vermont, provided the disabled veterans have “had their vehicle modified to accommodate their disability and this accommodation was paid for the by the U.S. Department of Veteran Affairs.” Veterans who qualify for this exemption also qualify for an exemption from registration fees and license fees.
  • Service members stationed in Washington State for less than 90 days “may be exempt from paying sales or use tax” on cars purchased in Washington. Washington residents who purchase a vehicle in another state while stationed there but who license that vehicle in Washington may not have to pay Washington State sales tax. In addition, active-duty members of the United States Armed Forces who license vehicles in Washington may be exempt from the vehicle excise tax or RTA tax.

In all states, proper documentation must be presented by veterans and active service members in order to qualify for the exemption.

How does your business keep track of sales tax exemptions?

photo credit: kevin dooley via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.