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Tax relief available for businesses impacted by California fires

  • Jan 22, 2018 | Gail Cole

 Tax relief is available for victims of the California fires, floods, and mudslides.

California’s been hit with one catastrophe after another: a litany of progressively more damaging fires, floods, and mudslides.

In October 2017, Governor Edmund G. Brown Jr. declared a state of emergency for Butte, Lake, Mendocino, Napa, Nevada, Orange, Solano, Sonoma, and Yuba counties, each of which suffered widespread damage from wildfires. Two months later, a state of emergency was declared in San Diego, Santa Barbara, Los Angeles, and Ventura counties, also due to fires. While recovery continues, it’s been hampered in some areas by devastating mudslides.

Tax relief is currently available for businesses and individuals impacted by fires in affected areas. Affected taxpayers may request extensions to file returns and relief from penalties and interest for a variety of taxes and fees, including sales and use taxes, fuel taxes, cigarettes and tobacco products taxes and licensing, and water rights fees. A complete list is available from the California Department of Tax and Fee Administration.

In addition to the above taxes, taxpayers may deduct a disaster loss for any loss sustained in any area of California proclaimed a state of emergency. The California Franchise Tax Board (FTB) reminds that “a casualty loss becomes a disaster loss when … you sustain the loss in an area the President of the United States or the Governor of California declares a state of emergency, [and] you sustain the loss because of the declared disaster.” Additional information.

Affected taxpayers have until April 30, 2018, to file and pay their California income tax returns. In announcing the news, California Controller Betty T. Yee, chair of the FTB, said, “California’s recent fires and mudslides have devastated communities, from the loss of lives and property to the displacement of families and workers. Hopefully extra time to file and pay taxes can provide some minor relief to these fellow Californians.”

Finally, the IRS announced on Jan. 17, 2018, that tax relief is available for “victims of the wildfires, flooding, mudflows, and debris flows that took place beginning on Dec. 4, 2017 in parts of California.” This came on the heels of disaster declarations by President Trump and the Federal Emergency Management Agency. Additional details are available from the IRS.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.