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R.J. DeSilva
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News Release from Comptroller Susan Combs

For Immediate Release
September 19, 2008

Comptroller Susan Combs Updates Hurricane Victims On Available Tax Relief

(AUSTIN) — Texas Comptroller Susan Combs wants to remind businesses damaged by Hurricane Ike that they may postpone paying state taxes, if necessary, while they clean up wind and flood damage. Upon request, taxpayers may be granted an extension of up to 90 days to file state tax returns due in September and October.

To request a tax extension, contact the Comptroller’s office at (800) 252-5555 or send an e-mail to tax.help@cpa.state.tx.us. Extension requests may be made at any time up to 90 days after the original due date.

“As Southeast Texas business owners repair and rebuild after Ike, the last thing they need to worry about is paying state taxes,” Combs said. “Our office will do everything possible to smooth the way as Texas rebounds from this disastrous storm.”

Comptroller Combs has also announced a plan to assist local governments that suffer a loss of sales tax revenue due to the business disruption caused by Hurricane Ike. Local governments in the 29 counties declared FEMA disaster areas can, upon request, receive an advance local sales tax allocation in November and December if their local sales tax allocation declined from November and December of 2007. The difference would be made up by the advance allocation in those two months. Taxing entities that choose to accept the offer will have to make repayment during 2009.

The plan will help hard-hit communities cover the cost of the cleanup and provide routine services like law enforcement, fire protection, health care, trash pickup and street maintenance until economic activity returns to normal.

Taxing entities in affected areas should call (800) 531-5441, ext. 3-4530 for more information. The counties declared FEMA disaster areas are Angelina, Austin, Brazoria, Chambers, Cherokee, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jasper, Jefferson, Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Waller and Washington counties.

Combs reminds coastal residents cleaning up and repairing homes and businesses damaged by Hurricane Ike that the law provides tax exemptions for some recovery-related services:

  • The cost of labor to repair storm damage to non-residential property, including offices, stores and other commercial buildings. The cost of labor must be separately stated on the repair bill.
  • Texas never imposes sales tax on labor for residential repairs. The cost of labor must be separately stated on the repair bill.
  • Services used to restore storm-damaged property, including dry cleaning of clothing and draperies; rug and carpet cleaning; furniture cleaning; and appliance repairs.
  • Charges for cutting storm-damaged or downed trees. Charges to haul away trees and limbs are taxable, as are charges to haul away other storm debris.
  • Certain charges related to mold remediation.
  • Purchases made with vouchers or debit cards provided by FEMA, the Red Cross, and the Salvation Army. Storm-related purchases made with cash donations or personal funds are subject to sales tax.
  • For evacuees taking shelter in hotels and motels, the Governor has waived state and local hotel taxes from Sept. 8 to Oct. 14.

“If you have any questions about paying tax on storm recovery services of any kind, please check our Web site or call us at (800) 252-5555. We’ll be glad to help,” Combs said. “I am committed to ensuring that unnecessary taxes are not added to the cost of recovery.”

In certain counties, the Internal Revenue Service (IRS) has lifted its restriction on using dyed diesel on roads and highways. Dyed diesel contains red coloring to identify it as untaxed fuel that is only for off-road use. The IRS is allowing on-road dyed diesel use in Brazoria, Chambers, Galveston, Harris, Jefferson and Orange counties, if the fuel is used by farmers, ranchers and people working with them to rescue or feed livestock stranded by the hurricane; the fuel had been bought for use before Sept. 19, 2008, and is used before Sept. 26, 2008; and the purchaser pays the federal 24.4-cents-per-gallon tax.

The Comptroller’s office is allowing the sale of clear diesel fuel tax-free for off-road use in hurricane relief and recovery efforts in the 29 counties declared FEMA disaster areas. This applies to diesel fuel purchased and used from Sept.12 to Oct. 14. Purchasers must sign an affidavit at the time of purchase, which the Comptroller’s office has sent to licensed suppliers and distributors, or may request a refund from the Comptroller’s office by Dec. 31.

To assist Texans whose homes and businesses are damaged by Hurricane Ike, Combs has created a one-stop Web page containing hurricane-related tax information and other valuable resources for storm victims. The Comptroller’s Hurricane Ike information page is located at http://www.window.state.tx.us/disaster/

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Find details on all the services of the Comptroller’s office at www.window.state.tx.us, including a transparent look at state spending at www.window.state.tx.us/wherethemoneygoes.

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