Tax Help Relating to Natural Disasters in Texas

Oct 26th, 2018

The Texas Comptroller has released guidance explaining how tax applies when the Governor of Texas or the President of the United States declares a location in Texas to be a disaster area. Tax relief provisions relevant to a period of disaster include:

  1. Filing Extensions - Texas allows taxpayers to request filing extensions. Decisions on extensions are made on a case-by-case basis.
  2. Exemption for Relief Organizations - Texas provides sales and use tax exemptions for certain entities (government, nonprofit, etc.).
  3. Salvation Army and Red Cross Vouchers - Tax is not due on taxable items purchased at a Salvation Army retail outlet or thrift store with a Salvation Army voucher. Food purchased with a Red Cross voucher is not taxable.
  4. FEMA Debit Cards - Food purchased using FEMA debit cards is not taxable.
  5. Out-of-State Businesses Performing Disaster-Related Work - Texas does not require out-of-state businesses performing disaster recovery work to collect tax if the business (1) is in the state as an affiliate of an in-state business or at the request of an in-state business under a mutual assistance agreement, and (2) only performs disaster-related work to repair or restore critical infrastructure during a disaster response period in a declared disaster area.