This bill establishes a tax credit for car registration fees paid by disabled veterans who have a 100 percent disability rating. The credit, which can be claimed against the individual income tax, is defined as the amount of the car registration fee paid under Code section 321.105, with a maximum limit of $100. The bill specifies that a "disabled veteran" includes those with a permanent service-connected disability rating of 100 percent or a permanent and total disability rating based on individual unemployability, as certified by the United States Department of Veterans Affairs.

Additionally, the bill allows for any tax credit in excess of the taxpayer's liability to be refundable. Taxpayers also have the option to apply any overpayment to their tax liability for the following year instead of claiming a refund. The Department of Revenue is authorized to adopt rules for the administration of this tax credit. Importantly, the provisions of this bill are retroactively applicable to tax years beginning on or after January 1, 2026.