Reporter for The Canyon Weekly
State lawmakers have added jury awards to proposed income tax exemptions for legal damages from wildfires, while differences remain including the timeframe of exemptions.
The Senate unanimously approved SB 1520 on Wednesday after amending the bill Feb. 22 to include jury awards, as the original draft focused only on settlements.
The amendment also barred tax exemptions for legal payouts if the same amount was covered by a related insurance payment.
The House is considering its own version of the bill, HB 4007, with a proposed amendment that included the Senate’s changes.
The House also proposed moving the start date for applicable fires from 2020 to 2018, and making the policy ongoing rather than sunsetting in 2025. They additionally proposed allowing associated legal fees to be claimed as itemized deductions.
With these differences between the chambers, representatives must consider whether or not to pursue further amendments or risk running out the clock on the current session, set to end March 10.
During a Tuesday Meeting of the House Committee on Revenue, staff reported the House could pass SB 1520 as is, or make changes and return it to the Senate for a concurrence vote. If they instead move forward with HB 4007, the bill would have to pass through a Senate committee before a floor vote, potentially prolonging the process.
House committee members said they would discuss options and get back to staff with a preferred strategy.
The bills were introduced in response to the 2020 Labor Day Fires, for which PacifiCorp faces the potential of billions of dollars in legal payouts to fire survivors.
Between attorneys fees and federal and state income tax, some claimants may receive between 20% and 30% of their original payouts. Supporters said this unfairly limits wildfire survivors who are struggling to rebuild.
