OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 134 Bill Analysis
135th General Assembly
Click here for S.B. 134’s Fiscal Note
Version: As Introduced
Primary Sponsors: Sen. Hoagland
Effective Date:
Mackenzie Damon, Attorney
SUMMARY
 Authorizes a new homestead exemption for disabled veterans that, relative to an
existing exemption for disabled veterans, expands the class of disabled veterans that
qualify for the exemption and bases the exemption amount on the veteran’s disability
rating.
 Caps the new exemption at $150,000 of a homestead’s value.
 Allows a veteran to apply for the new or existing exemption by furnishing disability
documentation obtained from a county veterans service commission.
DETAILED ANALYSIS
Homestead exemption for disabled veterans
The bill creates a new property tax reduction for disabled veterans. Under continuing
law, qualifying veterans may receive an enhanced homestead exemption. For 2022, the
exemption equaled $50,000 of the true value of the veteran’s home; this amount will increase
for inflation beginning in 2023. The bill’s new exemption is similar, except it expands the class
of disabled veterans may qualify for the exemption and calculates the exemption amount based
on the veteran’s disability rating.
Homestead exemption: background
Continuing law provides a property tax credit for the primary residence, or
“homestead,” of certain qualifying individuals. The standard “homestead exemption”
essentially exempts a portion of the value of a home owned by an individual who is 65 years of
age or older, permanently and totally disabled, or at least 59 years old and the surviving spouse
of an individual who previously received the exemption. For 2022, the exemption equaled
$25,000 of the fair market value of a qualifying homestead. Beginning in tax year 2023, that
amount will increase for inflation each year. The exemption is means-tested, so only
September 19, 2023
Office of Research and Drafting LSC Legislative Budget Office
homeowners with household income below a certain threshold ($36,100 for tax year 2023) may
qualify.
Enhanced exemption for disabled veterans
Under continuing law, a special “enhanced” exemption is available for homes of certain
disabled veterans. For 2022, the exemption equaled $50,000, but as with the standard
exemption, that amount will increase for inflation each year beginning in 2023. To qualify, the
veteran must have been honorably discharged and have one or more service-connected
disabilities that have received either (1) a total disability rating (i.e., a disability rating of 100%)
or (2) a total disability rating for compensation based on individual employability. Under the
latter scenario, the U.S. Department of Veterans Affairs (VA) determines that a veteran is
treated as if he or she has a 100% rated disability if (1) the veteran has at least one service-
connected disability rated at 60% or higher, or two or more service-connected disabilities with
at least one rated at 40% or higher and a combined rating of 70% or more and (2) the veteran
cannot hold steady employment. If a veteran qualifies under either of these scenarios, the
veteran receives the enhanced exemption.
The bill creates a new enhanced exemption for disabled veterans. Under the bill’s
exemption, any honorably discharged veteran would qualify if they have one or more rated
service-connected disabilities, regardless of the disability rating, as long as they either (1) are at
least 60 years old or (2) served at least 20 years in the armed forces or National Guard.1
The bill also changes, compared to the existing exemption, how the new exemption is
calculated for disabled veterans who meet either of these two requirements. For disabled
veterans who do not currently qualify for the existing enhanced exemption, the reduction will
be based on the veteran’s percentage disability rating, multiplied by his or her current tax
liability.2 However, the exemption cannot reduce the value of the disabled veteran’s home by
more than $150,000. Disabled veterans who already qualify for the existing exemption (i.e., are
100% disabled), and who are either at least 60 years old or served for at least 20 years, may
choose between the existing exemption amount ($50,000 for 2022) or the reduction based on
the veteran’s percentage disability rating (100%), subject to the $150,000 value limitation. If a
veteran already qualifies for the existing enhanced exemption, but does not meet either of the
two additional age or service requirements, the veteran may continue to claim the existing
exemption.
Example
The following examples illustrate how the bill’s changes would affect the amount of, and
a veteran’s eligibility for, an enhanced homestead exemption. The examples use the $50,000
exemption amount available in 2022, since the 2023 inflation increase has yet to be calculated.
1 R.C. 323.151(F).
2 R.C. 323.152(A)(2) and 4503.065(B).
P a g e |2 S.B. 134
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
First, consider a veteran who is 65, has a 100% disability rating, owns a home with a fair
market value of $200,000, and has an annual tax liability is $3,000. Under current law, the
veteran would receive a $50,000 exemption, so that the veteran is only taxed on $150,000 of
the value of the veteran’s home. Under the bill, the veteran could alternatively calculate a tax
reduction equal to 100% (their disability rating) multiplied their tax liability ($3,000). However,
since the reduction can only apply to up to $150,000 of the home’s value, the veteran could not
claim the full $3,000 reduction and would still need to pay taxes on $50,000 of the value of
their home ($1,250, or one-quarter of $3,000).
If the veteran in the above example had a 50% disability rating, the veteran would not
receive any exemption under current law but, under the bill, would receive a tax reduction
equal to $1,500 (50% of $3,000).
Surviving spouses, means test, and manufactured homes
As under the current enhanced exemption, the bill’s enhanced exemption for disabled
veterans extends to the surviving spouse of the veteran, until the spouse dies or remarries. Also
similar to the existing exemption, the bill does not require the veteran to meet an income test.
And, as with all current homestead exemptions, the bill’s enhanced disabled veteran exemption
applies to manufactured and mobile homes regardless of whether they are taxed as real
property or subject to the manufactured home tax.
Application requirements
Under continuing law, a veteran must apply to the county auditor for the homestead
exemption. The veteran must include documentation with this initial application that shows
their discharge status and disability rating. The bill adds that, if a veteran qualifies for the
exemption based on length of service, the veteran must also provide documentation proving
that service. After this initial application, no further application is needed, but the auditor must
be notified if the homestead no longer qualifies for exemption.
Under current law, the required documentation must come from the U.S. Department
of Veterans Affairs. The bill alternatively authorizes the disability documentation to come from
a county veterans service commission. To obtain these records, a veteran must make a request
to a county veterans service officer of the county in which the veteran resides. 3
Special assessments
Under current law, the homestead exemption does not apply to special assessments –
i.e., special charges imposed by a local government on specific properties to pay for
improvements benefitting those properties. (An example is a special assessment imposed by a
municipality on properties in a certain neighborhood to pay for a new water line in that
neighborhood.)
3 R.C. 323.153(A)(1), 4503.066(A)(1), and 5901.07.
P a g e |3 S.B. 134
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
The bill’s enhanced exemption for disabled veterans applies to reduce special
assessments as well as property taxes.4
Reimbursement of local taxing units
As with all current homestead exemptions, local taxing units are reimbursed by the state
for the reduction in property tax revenue that results from the bill’s disabled veterans
homestead exemption. The reimbursement is paid from the GRF semiannually or annually.5
Application
The bill’s disabled veteran homestead exemption applies to tax years ending on or after
the bill’s 90-day effective date or, in the case of homes that are subject to the manufactured
home tax, tax years beginning on or after that date. The difference in application is accounted
for by the fact that manufactured home tax is payable on a current-year basis, whereas
property tax is payable in arrears.6
HISTORY
Action Date
Introduced 07-18-23
ANSB0134IN-135/ks
4 R.C. 323.152(C).
5 R.C. 323.156 and 4503.068, not in the bill.
6 Section 3.
P a g e |4 S.B. 134
As Introduced