Purpose

Allows a taxpayer or their descendants or heirs who receive reparation payments made to victims of the Nazi Holocaust to subtract those payments from their individual income tax.

Background

Under Federal law reparations payments from the German government do not constitute income because they are in the nature of reimbursement for the deprivation of civil or personal rights. Additionally, Federal law exempts reparations directly from the German government from means tested programs. However, Federal law makes no reference to reparations coming from pools of funds created to address claims against banks, insurance companies, or corporations that used slave labor.

The amendment to H.B. 2459 provides an income tax subtraction to a taxpayer (or the taxpayer’s decedents or heirs) who receive reparations payments from any source made to victims of the Nazi Holocaust. Additionally, it excludes any income received as a holocaust reparation payment from consideration when determining income eligibility for a state program.

The Department of Revenue anticipates very little, if any, fiscal impact from the provisions of this measure.

Provisions

1. Allows a taxpayer (or the taxpayer’s descendants or heirs) who receive reparation payments made to victims of the Nazi Holocaust to subtract those payments from their individual income tax.

2. Excludes any income received as a Holocaust reparation payment from consideration when determining income eligibility for a state program.

3. Provides for a general effective date.

RB/cmh