Expand Disabled Veteran Prop. Tax Exclusion.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1122

Short Title: Expand Disabled Veteran Prop. Tax Exclusion. (Public)
Sponsors: Representatives Crawford, Pittman, Ager, and Alston (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
April 30, 2026
*H1122-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO EXPAND THE DISABLED VETERAN PR OPERTY TAX HOMESTEAD 2
EXCLUSION BY EXCLUDING FROM TAXATION THE ENTIRE APPRAISED VALUE 3
OF THE PRIMARY RESID ENCE AND TO REIMBURS E LOCAL GOVERNMENTS 4
FOR THEIR RESULTING REVENUE LOSS. 5
The General Assembly of North Carolina enacts: 6
SECTION 1. G.S. 105-277.1C reads as rewritten: 7
"§ 105-277.1C. Disabled veteran property tax homestead exclusion. 8
(a) Classification. – A permanent residence owned and occupied by a qualifying owner 9
is designated a special class of property under Article V, Section 2(2) of the North Carolina 10
Constitution and is taxable in accordance with this section. The first forty-five thousand dollars 11
($45,000) of appraised value of the residence is excluded from taxation. A qualifying owner who 12
receives an exclusion under this section may not receive other property tax relief. 13
(b) Definitions. – The following definitions apply in this section: 14
(1) Disabled veteran. – A veteran of any branch of the Armed Forces of the United 15
States whose character of service at separation was honorable or under 16
honorable conditions and who satisfies one of the following requirements: 17
a. As of January 1 preceding the taxable year for which the exclusion 18
allowed by this section is claimed, the veteran had received benefits 19
under 38 U.S.C. § 2101. 20
b. The veteran has received a certification by the United States 21
Department of Veterans Affairs or another fede ral agency indicating 22
that, as of January 1 preceding the taxable year for which the exclusion 23
allowed by this section is claimed, he or she has a service -connected, 24
permanent, and total disability. 25
c. The veteran is deceased and the United States Department of Veterans 26
Affairs or another federal agency has certified that, as of January 1 27
preceding the taxable year for which the exclusion allowed by this 28
section is claimed, the veteran's death was the result of a 29
service-connected condition. 30
(2) Repealed by Session Laws 2009-445, s. 22(c), effective for taxes imposed for 31
taxable years beginning on or after July 1, 2009. 32
(2a) Hold harmless amount. – The appraised value of a property excluded from 33
taxation under subsection (a) of this section multiplied by the applicable local 34
tax rate. 35
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1122-First Edition
(3) Permanent residence. – Defined in G.S. 105-277.1. 1
(4) Property tax relief. – Defined in G.S. 105-277.1. 2
(4a) Qualifying owner. – An owner, as defined in G.S. 105-277.1, who is a North 3
Carolina resident and one of the following: 4
a. A disabled veteran. 5
b. The surviving spouse of a disabled veteran who has not remarried. 6
(5), (6) Repealed by Session Laws 2009-445, s. 22(c), effective for taxes imposed for 7
taxable years beginning on or after July 1, 2009. 8
(7) Service-connected. – Defined in 38 U.S.C. § 101. 9
(8) Total hold harmless amount. – The sum of the following: 10
a. The hold harmless amount for all property excluded from taxation 11
under subsection (a) of this section in the county. 12
b. The hold harmless amount for all prop erty excluded from taxation 13
under subsection (a) of this section in the cities located in the county. 14
… 15
(g) Reimbursement. – On or before September 1 of each year, each county tax collector 16
shall notify the Secretary of Revenue, in a manner prescribed by the Secretary, of the county 's 17
total hold harmless amount. A county that fails to notify the Secretary of Revenue of its total hold 18
harmless amount by the due date is barred from receiving a reimbursement under this subsection 19
for that taxable year. On or before December 31 of each year, the Secretary of Revenue shall 20
distribute to each county its respective total hold harmless amount. 21
Any funds received by a county that are attributable to a city within the county must be 22
distributed to that respective city. Any funds received by a county or city because the county or 23
city was collecting taxes for another unit of government or special district must be credited to the 24
funds of that other unit or district in accordance with regulations issued by the Local Government 25
Commission. 26
In order to pay for the reimbursement under this section and the cost to the Department of 27
Revenue of administering the reimbursement, the Secretary of Revenue shall draw from 28
collections received under Part 2 of Article 4 of this Chapt er an amount equal to the 29
reimbursement and the cost of administration." 30
SECTION 2. There is appropriated from the General Fund to the Department of 31
Revenue the sum of one hundred thousand dollars ($100,000) in nonrecurring funds for the 32
2026-2027 fiscal year for administrative expenses associated with implementing the hold 33
harmless provision implemented by this act. 34
SECTION 3. Section 1 of this act is effective for taxes imposed for taxable years 35
beginning on or after July 1, 2027. Section 2 of this act becomes effective July 1, 2026. The 36
remainder of this act is effective when it becomes law. 37