DELAWARE- A new bill aims to extend a tax break to veterans by raising the portion of their pensions exempt from income tax.
If approved, it could mean a boost in income for retired military personnel. Sen. Eric Buckson (R-Dover), the bill's sponsor, hopes this initiative will persuade veterans to remain in the First State.
Buckson highlights the impact of high income taxes on retired military, which he believes is prompting many to relocate out of state. Senate Bill 201 seeks to halt this migration.
"We have to compete with other states and right now neighboring states like Maryland and Virginia have already done this or are in the process of doing it," he said.
Currently, Delaware provides veterans with an income tax exemption capped at $12,500, exclusively for individuals under 60 years old. SB201 aims to eliminate the age requirement and incrementally raise the exemption over three years, ultimately reaching a $25,000 cap.
Despite bipartisan support in the State House and Senate, Buckson anticipates opponents will hone in on an estimated $3 million reduction in state revenue.
President of Delaware's Veterans Coalition, Dave Skocik, thinks keeping highly skilled veterans in the state will pay off for the workforce and community culture.
"These are people that the government has spent hundreds of thousands of dollars training in thinks like IT, logistics and medical practices," Skocik said. "These are the folks that we want to keep here."
The bill awaits consideration in the Senate Executive Committee. Buckson acknowledges the desire among veterans for a full exemption, as seen in states like Alabama and Arizona. However, he notes the challenge in garnering support for such a measure in Delaware, given the absence of a sales tax.
