Rafferty, Scavello Applaud Committee Passage of Realty Transfer Tax Exemption for Veterans’ Organizations

Harrisburg – The Senate Finance Committee recently moved legislation sponsored by Sen. John Rafferty (R-44) and Sen. Mario Scavello (R-40) to exempt nationally recognized veterans’ organizations from the Realty Transfer Tax.

Currently, veterans’ organizations wishing to transfer property from the local home association to the post are not excluded from the 2 percent realty transfer tax despite their tax exempt status.

The change was made necessary as the result of a 1998 state Supreme Court ruling that prompted American Legion home associations which did not have a liquor license but wished to obtain one to apply as an incorporated unit of a national veterans’ organization. The associations were advised to transfer all other realty and assets to the post to insulate the post and its assets from liability while still affording them the opportunity to have social or associate members who can contribute to the post’s financial success.

Senate Bill 430 will exempt veterans’ organizations from the Realty Transfer Tax during such necessary transactions.

 “Other tax-exempt entities are excluded from the Realty Transfer Tax, and this legislation will see to it that organizations that serve veterans receive the same treatment,” said Scavello. “Veterans’ organizations are the last groups we want to see facing an unnecessary tax burden.”

“Home associations and other social clubs affiliated with veteran’s organizations operate on very thin financial margins,” said Rafferty.   “For many smaller clubs, the realty transfer tax is an impediment to them performing a simple transfer of real estate.”  I think it is very important for these veteran affiliated clubs to benefit from the same real estate tax benefit currently afforded to other tax exempt organizations throughout the state.”

Despite the proposed change in tax status contained in this legislation, the home association would still be dependent upon the national veterans’ organization post, and the post would still continue to have the authority to disband the home association at any time.

CONTACT: Christine Zubeck czubeck@pasen.gov (717) 787-6123 (Senator Scavello)