SHB 2135
In CommitteeHouse
Adaptive housing tax pref.
Modifying and extending the adaptive housing retail sales and use tax preference for disabled veterans.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill extends and enhances the state tax remittance program for disabled veterans who receive federal housing grants. It raises the maximum tax refund per project to $5,000, extends the program through 2038, and adds transparency and inflation adjustments—while keeping the total annual state cost capped at $250,000 unless more funding is approved.
- Extends the existing adaptive housing tax remittance program for disabled veterans through January 1, 2038 (previously set to expire in 2028).
- Increases the maximum remittance per housing project from $2,500 to $5,000 (state sales tax only).
- Maintains a statewide annual cap of $250,000 in remittances (adjusted for inflation starting in fiscal year 2028), unless additional funding is appropriated.
- Requires eligible veterans to pay the sales tax upfront, then apply to the Department of Revenue for reimbursement, submitting documents like VA grant letters, contracts, and invoices.
- Limits applicants to one remittance request per calendar quarter, with payments issued quarterly after approval.
- Adds a monthly public dashboard on the Department of Revenue’s website showing how much of the annual $250,000 cap remains.
Who is affected
- Disabled veterans — Disabled or severely disabled U.S. veterans who have received a federal grant (Specially Adapted Housing Grant or Special Housing Adaptation Grant) to modify or build a home that accommodates their disability. They can apply for a state tax remittance to recover sales or use tax paid on construction materials and labor.
- Construction and home improvement businesses — Contractors, builders, and suppliers who provide materials or labor for adapted housing projects for eligible veterans. They collect sales tax at the time of purchase but are not directly reimbursed; instead, veterans apply for tax remittances after paying.
- Washington State Department of Revenue — The Washington State Department of Revenue, which administers the remittance program—including reviewing applications, verifying eligibility, tracking annual caps, and issuing quarterly payments to approved applicants.
- General public / taxpayers — State taxpayers overall, as the program is funded through the state’s general fund and is subject to annual spending caps unless additional appropriations are made.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Extending the program through 2038 and doubling the per-project remittance to $5,000 significantly improves long-term predictability and financial relief for disabled veterans needing costly housing modifications—directly supporting independence, accessibility, and quality of life.
HousingPeopleRef: Sec. 1(1); Sec. 1(4)(a), (b)The monthly public dashboard increases transparency and accountability, helping veterans track remaining funds and plan projects more effectively—reducing uncertainty and preventing last-minute application bottlenecks near the annual cap.
Public SafetyPeopleRef: Sec. 1(3)(c); Sec. 1(2)(a)Inflation adjustments to both the per-project and total caps beginning in FY 2028 help preserve the real value of the benefit over time, preventing future erosion of purchasing power as construction and material costs rise.
FinancialPeopleRef: Sec. 1(3)(b)The bill explicitly recognizes disabled veterans’ higher poverty rates and frames the remittance as financial relief for a vulnerable group—reinforcing equitable access to safe housing as a matter of public policy, not just fiscal efficiency.
Rights & LibertiesPeopleRef: Sec. 3(1)(a)While not directly reimbursed, construction and home improvement businesses may benefit indirectly from increased demand for adapted housing services, as veterans with federal grants are more likely to proceed with projects knowing tax costs can be partially recovered.
Business & EmploymentLean peopleRef: Sec. 1(2)(a); Sec. 1(2)(c)
Potential Concerns (5)
The $250,000 annual cap on remittances may limit program access for eligible disabled veterans, especially in years with high demand—potentially leaving some veterans without full reimbursement of sales tax paid on critical housing modifications. This creates uncertainty and delays in accessing needed funds for home adaptations that support independence and safety.
Public SafetyPeopleRef: Sec. 1(3)(a); Sec. 1(3)(b)The quarterly application limit (one per calendar quarter) may slow the pace of housing modifications for veterans with urgent needs, especially if materials are purchased in multiple batches across quarters—delaying project completion and potentially worsening health or safety outcomes.
HousingPeopleRef: Sec. 1(2)(b)Requiring veterans to pay sales tax upfront and then apply for reimbursement creates a cash-flow burden for low-income disabled veterans, who may lack the liquidity to front $2,500–$5,000 in taxes before being reimbursed—potentially delaying or deterring participation.
FinancialLean peopleRef: Sec. 1(2)(a)Inflation adjustments to the $5,000 cap and $250,000 total cap begin only in FY 2028, meaning the real value of the benefit will erode for two years before adjustments begin—reducing purchasing power during a period of high construction costs.
Local GovernmentLean peopleRef: Sec. 1(3)(b)The bill does not require contractors or suppliers to participate in the remittance process or adjust their billing practices, so the administrative burden remains on veterans—not businesses—potentially limiting efficiency gains or unintended benefits to construction firms that collect but do not remit tax.
Business & EmploymentRef: Sec. 3(2)(c)
Who Is Most Affected
Disabled veterans—especially those with low or fixed incomes—gain meaningful financial relief and improved access to safe, accessible housing. However, the $250,000 cap and quarterly application limit may constrain full benefit realization in high-demand years.
Construction and home improvement businesses may see modest increases in demand for adapted housing projects, but they do not receive direct reimbursement and must continue collecting sales tax upfront—so net benefit is small and indirect.
The Department of Revenue gains new administrative responsibilities (reviewing applications, maintaining dashboard, adjusting for inflation), but the program’s capped budget and quarterly structure limit operational burden.
General taxpayers benefit from a tightly capped, transparent program that does not increase baseline spending—but if demand exceeds $250,000 in a given year, additional appropriations would be required, potentially diverting funds from other priorities.
Local governments may see modest benefits from increased construction activity in their jurisdictions, but since the tax remittance only covers the *state* portion of sales tax (not local portions), local revenue is unaffected—no net gain or loss.