[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Extensions of Remarks]
[Page E371]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             CLARIFY THAT VETERANS' BENEFITS ARE TAX-EXEMPT

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                      HON. G.V. (SONNY) MONTGOMERY

                             of mississippi

                    in the house of representatives

                      Thursday, February 16, 1995
  Mr. MONTGOMERY. Mr. Speaker, today I am introducing H.R. 972 to 
clarify that veterans benefits are not taxable. A number of members of 
the Committee on Veterans' Affairs have joined me as cosponsors of this 
legislation.
  Mr. Speaker, as far as we know, veterans' benefits have never been 
subject to taxation, either at the Federal or the State level. We have 
long had laws which prohibited these benefits from being taxed. 
However, over the course of the last several years, some doubt about 
the tax-exempt status of veterans' benefits has arisen. In 1992, the 
IRS Chief Counsel's office concluded that some benefits might be 
taxable under amendments made to the Internal Revenue Code in 1986.
  To its credit, this administration responded to this possibility by 
proposing that new language be enacted exempting all veterans' benefits 
and allowance from taxation. The Subcommittee on Select Revenue 
Measures of the Committee on Ways and Means received favorable 
testimony on a proposal which I introduced last Congress, H.R. 786, 
which would have done the same thing as the administration proposal. 
However, the committee failed to act on any technical tax bills last 
Congress.
  I think that we should clear up any remaining confusion on this issue 
by enacting this legislation, and the administration has indicated its 
support for my position in the past. Since there is no tax now being 
collected on veterans' benefits, thee shouldn't be any revenue loss 
from its enactment. I urge all my colleagues to support this measure.


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