Tax Exemptions in Disaster Areas

• Bapil Law
• July 13, 2020
• 0 Comment
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Personal Injury Lawyer

The new House Bill 492 allows local governments to provide tax exemptions to properties within 60 days after the governor declares an area to be a disaster.

Qualified Property:

If a property is damaged by a disaster, the qualified property will be:

• Tangible personal property used for the production of income
• An improvement to real property
• Manufactured home used as a dwelling, regardless of whether the owner of the manufactured home elects to treat the manufactured home as real property 

The chief appraiser shall assign to an item of qualified property by levels of property damage assessment ratings.

Levels:

1. Level I- If the property is at least 15 percent, but less than 30 percent damages. This means that the property suffered minimal damage and may continue to be used as intended
2. Level II- If the property is at least 30 percent, but less than 60 percent damages. That means that the property has suffered only nonstructural damage, including nonstructural damage to the roof, walls, foundation, or mechanical components, and the waterline, if any, is less than 18 inches above the floor. 
3. Level III- If the property is at least 60 percent damaged but is not a total loss. The property has suffered significant structural damage requiring extensive repair due to the failure or partial failure of structural elements, wall elements, or the foundation or the waterline is at least 18 inches above the floor.
4. Level IV- If the property is a total loss, meaning that repair of the property is not feasible. 

Area:

The area will be declared by the governor to be a disaster area following a disaster if: 

• At least fifteen percent damaged by the disaster, as determined by the chief appraiser under this section 
• For property subject of a rendition statement or property report filed by the property owner that demonstrates that the property had taxable situs in the disaster area for the tax year which the disaster occurred. 

Who Qualifies:

• A person is entitled to an exemption for taxation by a taxing unit of a portion of the appraised value of qualified property that the person owns in an amount determined by the governor.
• If the governor first declares territory in a taxing unit to be a disaster area as a rate for the tax year in which the declaration is issued, a person is not entitled to the exemption for that tax year unless the governing body of the taxing unit adopts the exemption in the manner provided by law for official action by the body

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