Can a disabled veteran in Arkansas get a refund of property taxes paid before the VA disability award came through?

Plain-English summary

A state senator asked Attorney General Leslie Rutledge what happens when a veteran applies for VA disability status, pays property taxes for several years while the application is pending, and then receives a qualifying disability award years later. Can the veteran get those earlier years of property taxes refunded or abated, given that the disabled-veteran exemption exists?

The AG concluded the answer was no under the law in effect from 2010 through 2012. The exemption hinged on the veteran's status as of the first Monday of January each tax year, the moment the property tax lien attached. Because the veteran in the hypothetical did not have a qualifying award until 2012, the 2010 and 2011 taxes had already attached as liens and were owed in full. Whether the veteran paid those earlier taxes before or after the eventual award did not matter.

The opinion explicitly limited itself to the pre-2015 statute. The General Assembly amended the exemption in 2015 (Act 1167) to provide that "the person shall be exempt from the date the person's eligibility is established regardless of the date the lien for the property taxes attached." So the answer for tax years 2015 and beyond may be different. The AG did not analyze the post-amendment statute.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Arkansas Code § 26-3-306(a)(1)(A)(i) was the operative exemption statute during the 2010 to 2012 window. It exempted a disabled veteran "who has been awarded special monthly compensation by the Department of Veterans Affairs" for specified conditions from payment of all state taxes on homestead and personal property. The AG noted that although state property taxes were abolished by Arkansas Constitution Amendment 47 in 1958, the General Assembly has continued to amend the statute, so the exemption is read to apply to local property taxes.

Two other statutes framed the conclusion. Section 26-34-101(b) provided that "all taxes assessed shall be a lien upon and bind the property assessed from the first Monday of January of the year in which the assessment shall be made and shall continue until the taxes, with any penalty which may accrue thereon, shall be paid." And section 25-16-701 barred the AG from engaging in the private practice of law, so the conclusions in the opinion were not framed as advice to any private third party.

The AG also pointed to a prior office opinion (Op. Att'y Gen. 2000-011) reaching the same conclusion on the first-Monday-of-January timing point.

Common questions

The veteran applied for disability in 2010 but did not get the award until 2012. Why are the 2010 and 2011 taxes not refundable?

Because under the pre-2015 statute, the exemption's effective trigger was the veteran's status on the first Monday of January of each tax year. The lien for those taxes attached on that date, before the disability was established. Late receipt of the award did not undo the lien that had already attached for prior years.

Did the 2015 amendment change this?

Yes, in part. Act 1167 of 2015 added subsection (f)(1), which provided the exemption applies from the date eligibility is established "regardless of the date the lien for the property taxes attached." The AG explicitly declined to interpret the new provision because the senator's hypothetical was framed around the 2010 to 2012 period.

Does it matter whether the veteran had already paid the older years' taxes by the time the award arrived?

No, the AG concluded that fact was not relevant. The question was about liability for those tax years, and that liability had already been fixed by the time the disability status was awarded.

Citations

• Ark. Code Ann. § 26-3-306(a)(1)(A)(i) (Repl. 2012) (disabled-veteran exemption from property taxes)
• Ark. Code Ann. § 25-16-701 (Repl. 2014) (AG barred from private practice of law)
• Ark. Code Ann. § 26-3-306(f)(1) (Act 1167 of 2015) (2015 amendment regarding effective date of exemption)
• Ark. Code Ann. § 26-34-101(b) (Repl. 2012) (property tax lien attaches first Monday of January)
• Arkansas Constitution Amendment 47 (1958 prohibition on state property tax levies)
• Act 363 of 1953 (origin of disabled-veteran exemption)
• Op. Att'y Gen. 2000-011 (prior AG opinion reaching the same first-Monday timing point)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2015-086
November 20, 2015
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE
The Honorable Keith M. Ingram
State Senator
P. O. Box 1028
West Memphis, AR 72303-1028
Dear Senator Ingram:
This is my opinion on your questions about a statute - as it provided during the years 2010 through 2012 - that exempts a disabled veteran from paying property taxes on his or her homestead and personal property. Your request sets out the following facts, stated to be hypothetical:

The veteran is an Arkansas resident and applies for disability status with the Department of Veteran Affairs in 2010. The veteran assesses his or her property in the county of residence in 2010. In 2011, the veteran pays property taxes (from 2010) and assesses property for 2011. In 2012, the veteran pays the 2011 property taxes and assesses for 2012. Also in 2012, the veteran receives a disability award from the Department of Veteran Affairs that makes the veteran eligible for the exemption under [the statute at issue].

Your questions are:

1. Is the disabled veteran entitled to:
   a. Abatement of the 2011 property taxes payable in 2012 if the taxes have not been paid at the time of the disability award; or
   b. Retroactive abatement of the 2011 property taxes if the taxes had been paid before the date of the disability award?
2. Is the disabled veteran entitled to retroactive abatement of the 2010 property taxes paid in 2011 after the veteran applied for disability status but prior to the time the veteran received the qualifying disability award?

RESPONSE

Before addressing the hypothetical questions you have posed, I must emphasize that I am statutorily barred from engaging in the private practice of law. Accordingly, the conclusions stated herein should not be deemed to be offered for the benefit of any private third party.

As alluded to above, I must also emphasize that - because your hypothetical facts are stated to have all occurred in the years 2010 through 2012 - I do not consider a 2015 law that amended the statute with respect to the date on which the exemption becomes effective. It is true that the 2015 amendment changed the relevant law, and might well require different answers to your questions if they concerned, say, the years 2016 through 2018. I address your hypothetical questions by applying the law in place during the relevant period from 2010 to 2012, and I do not consider the 2015 amendment.

With these caveats, it is my opinion that the answer to each of your hypothetical questions is "no."

DISCUSSION

The law in the relevant time period provided that a disabled veteran "who has been awarded special monthly compensation by the Department of Veterans Affairs" for one of several specified conditions "shall be exempt from payment of all state taxes on the homestead and personal property owned by the disabled veteran."

In my opinion, the question whether the pre-2015 statute exempted a veteran from payment of homestead and personal property taxes for a given year was determined by reference to the veteran's status under the statute on the first Monday in January of that year. Because - under the hypothetical facts given - the veteran did not receive an award until 2012, the property was, in my opinion, subject to 2010 and 2011 taxes. Whether the disability award occurred before or after the veteran's 2012 payment of 2011 taxes is not relevant, in my opinion, to the question of the veteran's liability for 2011 taxes. Again, it is important to note that this analysis is limited to the time period you asked about in your hypothetical questions, and therefore does not include an analysis of the effect of the General Assembly's 2015 amendment of the relevant law.

Sincerely,
LESLIE RUTLEDGE
Attorney General