Tax relief for Texans affected by Hurricane Harvey
- Tax Tips
- Aug 29, 2017 | Gail Cole
Updated 9.11.2017 to reflect extended hotel tax relief.
It could take years for East Texas to recover from the devastating destruction already caused by Hurricane Harvey, and still the rain falls. Since the flood waters are unlikely to recede until weeks after the record rains abate, recovery will be delayed. This is a true state of emergency.
As rescue crews strive to safeguard the residents of more than 50 counties, government officials are working to provide tax relief for affected businesses and individuals.
The Texas Comptroller’s Declared Natural Disasters and Emergencies Tax Help web page provides answers to questions frequently asked in times of trouble, such as hurricanes. It explains the special tax policies now available to victims of Harvey. For example:
- State and local hotel taxes are waived for evacuees of Hurricane Harvey and certain relief workers, Aug. 23–Sept. 22, 2017
- Charges for labor to repair nonresidential real property damaged by Harvey are exempt from sales tax with a valid exemption certificate (labor to repair residential real property is always exempt)
- Charges for labor to repair personal property damaged by Harvey are exempt from sales tax with a valid exemption certificate
- Charges to launder or dry-clean clothing or other items damaged by Harvey are sales tax exempt with a valid exemption certificate
- Taxable goods and services (including prepared food) purchased with a FEMA debit card or voucher are exempt from sales tax
- Taxable goods and services (including prepared food) purchased with a Red Cross debit card or voucher are exempt from sales tax
- Taxable goods and services purchased with a Salvation Army voucher are exempt from sales tax
However, not all purchases are eligible for an exemption. For example:
- Taxable goods and services purchased with personal funds remain taxable, even if those funds were given to the individual by an exempt organization
- Purchases of alcohol and tobacco products remain subject to tax, even if purchased with a FEMA or Red Cross debit card or voucher
In addition to the above tax breaks, the Texas Comptroller is authorized to grant a 90-day extension to taxpayers unable to file their tax returns on time because of Hurricane Harvey. However, extensions are not automatically granted. Taxpayers in need of one should request a tax filing extension or additional information from the Comptroller by calling the tax assistance line at 800-252-5555.
Out-of-state businesses doing relief work in Texas
Out-of-state entities in Texas to perform “disaster- or emergency-related work to repair or restore damaged critical infrastructure during a disaster response period in a declared disaster area” are not required to:
- Collect and remit Texas sales and use tax on their sales of taxable items in Texas
- Pay Texas sales or use tax on their purchases of taxable items sold or transferred to customers during a disaster response period