Vehicle Property Tax While Deployed

Life would be much simpler if we didn’t have to pay taxes. No one revels in paying some of your hard-earned money to the IRS.

But what if you are active-duty military? Do you still owe property taxes on your vehicle while deployed?

This is a question asked by many in our armed forces today. The simple answer is yes, but thanks to the Servicemembers Civil Relief Act, you will only pay property tax in your home state.

While there are currently over 25 states providing either partial or complete exemptions of property taxes to disabled veterans, not as many states offer these same benefits to those still serving, especially for your vehicle.

Many states don’t offer full exemptions but rather exemptions contingent upon certain restrictions being met, like veterans above a certain age or below certain income levels.

Still, some states’ partial exemptions are limited by specified dollar amounts or property values.

Military taxes and benefits can seem complicated, but many resources are available to service members to keep things simple. From volunteers helping with filing taxes to experts finding cheap auto insurance for veterans.

Keep reading to learn more about military deployment and vehicle property tax.

Do You Pay Vehicle Property Tax While Deployed?

Unfortunately, living tax-free is not a current benefit for active-duty military members. However, you may receive some tax breaks when you are deployed.

For example, while you still pay vehicle property tax while on active duty, you only have to pay those taxes in your home state.

With the passing of the Servicemembers Relief Act, if you are deployed to a different state in the US other than your home state, you only owe vehicle property tax during military deployment in your home state.

In other words, if you reside in Florida but are deployed to or stationed in Texas, you will only pay taxes in Florida.

The Military Spouses Residency Relief Act in 2009 extended this military deployment and vehicle property tax payments protection to military spouses who move with their spouses because of a deployment. (For more information, read our “Auto Insurance for Military Spouses (How to Save)“).

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How to Pay Vehicle Property Taxes While Deployed

Despite being deployed, all your bills, including your property taxes, are due at the same time every month as they were before your deployment. Knowing how to make payments is one of the most important property tax considerations for deployed military personnel.

While it may seem challenging to file things in another state or time zone, thanks to the internet, you can pay most, if not all, of your bills online.

Unless you choose to sell your car while deployed overseas, you will need to pay property tax on it. For those who need help paying vehicle property tax while overseas online, the federal government has provided each service member with two options for paying their taxes.

Option one is to file for an extension. For example, if you are serving in a combat zone or are deployed outside the country around the time taxes are due, the IRS can provide an extension of about 120 days.

The IRS worked with the Armed Forces Tax Council to make filing more manageable and created the Volunteer Income Tax Assistance program.

These resources help military members and their families file taxes on time and navigate the paperwork involved.

If you are serving overseas, the second option is to provide a power of attorney, POA, to a family member or someone you trust implicitly.

Regardless of how you pay your taxes, they are still due, despite deployment.

Tax Benefits for Deployed Service Members

Many benefits are available to military personnel and veterans, from financial advice to help with finding military discounts on auto insurance and other savings.

There are also many tax exemptions and exclusions offered to service members. These exclusions can help save money during tax time.

• Federal Income Tax Exclusions mean that some of your income is tax-free. By excluding certain income, you can lower the total amount of income tax you owe or increase your refund.
• State Income Tax Exclusions mean that your local governments also have designated types of income as tax-free for military members and veterans. Because states differ in how they regard current military pay and veterans’ benefits, you will have to refer to the tax laws in the state where you have permanent residency.
• Other Non-Taxable State Benefits mean that there are other benefits offered aside from income tax benefits. Some states collect no property taxes or partial amounts on service members’ primary residences. Other states, such as Arkansas, may waive some or all veteran or military residents’ annual vehicle taxes or fees. 

You will need to research the specific tax laws for your state of residency to find out what benefits you could be eligible for.

Eligibility Requirements for Tax Benefits

While there may be some exceptions, such as hardship, you must meet the following requirements to be considered.

• You served on active duty for a minimum of 24 months
• The (minimum) 24 months were continuous
• Your discharge status was not “dishonorable”

If you meet these requirements and are looking for auto insurance, continue reading to learn how to carry insurance on your automobile while deployed.

Insuring a Car While Deployed

If you’re deployed, especially overseas, you are unlikely to be operating your vehicle, and even if you are, you aren’t using it full-time. Insurance companies know this and understand that deployed service members don’t necessarily drive the vehicles registered to them. As a result, discounts are offered according to military status and types of auto insurance coverage needed.

Discounts will vary based on the type of service you perform. For example, some companies offer small discounts for just being in the military. Further, many insurance companies offer to adjust your premiums to make them cheaper if you are on active deployment.

The most significant discount for service members comes from being on active deployment. Before leaving, the best thing you can do is to let your insurer know the date you’ll be deployed. This way, they can understand that you’ll be away from your vehicle and provide the proper emergency deployment auto insurance discounts.

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Coverage Choices for Deployed Service Members

If you are currently deployed or preparing for deployment in the future, it is vital to understand the basic coverages offered to you. The cost of your insurance will depend on your coverage selection and applicable discounts. Make sure you talk with your insurance agent before making any final decisions. 

Liability Coverage

Liability auto insurance coverage helps protect you from financial losses if something happens that is your fault while operating your vehicle (Read more: Liability Auto Insurance Coverage).

This auto insurance coverage can help cover medical bills or property damage expenses, should you incur any due to an accident. 

Collision Coverage

Collision coverage is what will repair or replace your damaged vehicle after an accident.

If your policy requires a deductible, it will be due before repairs begin.

Comprehensive Coverage

Comprehensive coverage helps protect your vehicle against damages from something other than a collision, such as those caused by floods, theft, windshield damage, and other incidents.

Uninsured/Underinsured Motorist Coverage

Uninsured/underinsured motorist coverage is designed to help you get the service you need, even if you are involved in an accident with another driver who does not have adequate insurance coverage for their damages.

As always, shop around for the best rates and discounts.

Vehicle Property Tax While Deployed: The Bottom Line

If given the option, who wouldn’t want to stop paying taxes? But, unfortunately, your taxes will still be due even if you are in the military, on active duty, or deployed.

You can receive numerous discounts, exclusions, and benefits from being a service member, but all taxes will be due as usual at the end of the day. So take advantage of the tax resources and have an expert help you file your taxes.

Just make sure you shop around and talk to your insurance agent about the tax implications of deployment on vehicle ownership to determine what benefits and discounts you can take advantage of. As always, thank you for your service.

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