Coast Guard Combat-Injured Tax Fairness Act
- Bill Number
- H.R. 2973
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Armed Forces and National Security
- Status
- Introduced
- Latest Action
- 2025-04-21: Referred to the Subcommittee on Coast Guard and Maritime Transportation.
- Last Updated
- 2025-12-05T21:46:29Z
AI-Generated Summary
Purpose
This legislation, titled the "Coast Guard Combat-Injured Tax Fairness Act," aims to extend tax relief benefits to combat-injured members of the U.S. Coast Guard who receive severance payments. Specifically, it ensures that taxes are not withheld from these payments when the Coast Guard is operating independently (not as part of the Department of the Navy), promoting fairness similar to what is already provided to other military veterans.
Key Provisions
- Amendments to the 2016 Act: The bill modifies the Combat-Injured Veterans Tax Fairness Act of 2016 (Public Law 114-292) by adding references to the Secretary of Homeland Security (for the Coast Guard when not under the Navy) and the Secretary of Transportation (for periods when the Coast Guard was under the Department of Transportation).
- Section 3(a): Expands the identification and certification process for combat-related injuries to include Coast Guard personnel, requiring relevant secretaries to review and certify cases.
- Section 4: Updates procedures to prevent improper tax withholding on future severance payments for Coast Guard members, effective immediately upon enactment.
- Section 5: Broadens reporting and refund processes for taxes already withheld, allowing Coast Guard veterans to seek refunds.
- Deadlines for Implementation:
- Identification of improperly withheld amounts and reporting must occur within one year of enactment.
- Prevention of future improper withholdings begins on the date of enactment.
Significant Changes to Existing Law
- The 2016 Act previously applied only to the Department of Defense (DoD) and excluded the Coast Guard unless it was operating under the Navy. This bill removes that limitation, explicitly including the Coast Guard under the Department of Homeland Security (DHS) during normal operations and referencing the Department of Transportation (DOT) for historical periods.
- It introduces specific roles for non-DoD secretaries in certifying combat-related injuries, processing refunds, and updating tax withholding rules, ensuring the law's benefits are not siloed to traditional military branches.
Potential Impacts
- On Government Agencies: DHS and DOT will need to allocate resources for reviewing cases, issuing refunds, and updating administrative processes within tight deadlines, potentially increasing short-term workload but preventing future tax errors. The Department of the Treasury (implied through tax handling) may see minor additional refund payouts.
- On Citizens: Combat-injured Coast Guard veterans (and their families) stand to benefit from tax refunds on severance pay, providing financial relief without ongoing administrative burden. This could affect a limited number of individuals, as it targets specific combat-related cases.
- On International Relations: No direct impacts, as the bill focuses on domestic tax policy for U.S. service members.
Main Stakeholders Affected
- Primary Beneficiaries: Current and former Coast Guard members with combat-related injuries who received or will receive severance pay.
- Government Entities: U.S. Coast Guard (under DHS), Department of Homeland Security, Department of Transportation, and Department of the Treasury (for tax refunds and withholding).
- Indirectly Affected: Broader veteran support organizations and congressional committees (Transportation and Infrastructure, Ways and Means) overseeing implementation.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens equity in federal tax law by aligning treatment of Coast Guard personnel with other armed services, potentially reducing future litigation over unequal benefits. No challenges to constitutional authority are evident, as it builds on existing precedent under congressional power to regulate military compensation and taxes.
- Constitutional: Reinforces the uniformity clause (Article I, Section 8) by ensuring consistent tax treatment across federal services without favoring one branch.
- Political: Highlights bipartisan support (introduced by representatives from both parties) for veteran welfare, but could spark minor debates on fiscal responsibility due to refund costs. It addresses a niche gap in veteran policy, promoting inter-agency coordination without broader policy shifts.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Davis, Donald G. [D-NC-1]
Cosponsors (2)
Rep. Bacon, Don [R-NE-2], Rep. Hamadeh, Abraham J. [R-AZ-8]
Recent Actions
- 2025-04-21: Referred to the Subcommittee on Coast Guard and Maritime Transportation.
- 2025-04-21: Referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-04-21: Referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-04-21: Introduced in House
- 2025-04-21: Introduced in House
Bill Versions
- Coast Guard Combat-Injured Tax Fairness Act — issued 2025-04-21 — PDF (6 pages)