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House passes bill to exempt military pensions from state income tax

January 29, 2019

One of Gov. Eric Holcomb’s top priorities for the legislative session passed the Indiana House on Tuesday afternoon with nearly unanimous support.

House Bill 1010, authored by Rep. Bob Cherry, would exempt military veteran pensions from state income taxes. The House approved the measure 94-3. The bill will head to the Senate for consideration.

Holcomb has argued that the tax exemption was necessary in order to attract and retain more veterans, who could help solve ongoing workforce shortages in the state.

Cherry, R-Greenfield, said all of the states surrounding Indiana already offer the exemption.

“For Indiana to get in line and be competitive, we need to do this,” Cherry said.

The exemption would be phased in over years. During that period, the state would receive about $35.5 million less in estimated tax revenue, and that amount is estimated to grow 1 percent to 3 percent annually after that, according to the Legislative Services Agency.

Three Republicans voted against the bill—Jim Lucas from Seymour, Curt Nisly from Goshen, and Matt Hostettler from Fort Branch.

Lucas, who leans Libertarian, said he couldn’t vote for it because it singles out veterans and he believes that is unconstitutional.

“What about police officers that retire? What about teachers who retire?” Lucas said. “Do we not want to keep them in our state?”

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