News for those who live, work and play in the Santiam Canyon

Legislators pass wildfire relief tax bills

Legislators have approved a pair of bills providing tax relief for wildfire survivors, achieving what they could not in the 2023 legislative session.

SB 1520, which exempted legal payouts for wildfire losses from state income tax, passed the Senate Wednesday after passing the House Tuesday.

An original Senate version was passed Feb. 28 and, after an amended bill was approved by the House, it returned to the Senate for a concurrence vote.

SB 1545, which protects assessed property values for survivors who rebuilt, was approved by the House vote Wednesday following Senate approval March 1.

The session was scheduled to end Friday and Gov. Tina Kotek is expected to sign both bills. If signed, they would take effect June 9.

Relief for wildfire survivors has been an issue for legislators following the 2020 Labor Day fires.

Survivors experienced an onslaught of unique challenges including the COVID-19 pandemic, supply chain shortages, a construction industry bubble and shortfalls in insurance coverage.

SB 1520 is meant to provide survivors with more resources to rebuild their homes and communities, according to lawmakers.

Under current laws, survivors keep roughly 20% to 30% of legal payouts after attorney fees and state and federal income taxes. The bill would eliminate state taxes on damages that can be claimed as personal income, and allow legal fees as an itemized deduction.

The exemption would apply to losses from wildfires that were declared state and federal emergencies between Jan. 1, 2018, and Jan. 1, 2026.

Not exempt would be any payout amount equal to losses already recovered through insurance.

A similar bill is before Congress, the Protect Innocent Victims Of Taxation After Fire Act, which as of press time was before the Senate Finance Committee.

SB 1545 was aimed to help those who have already rebuilt and experienced an increase in assessed property values.

At issue is a state law capping annual increases in assessed values at no more than 3 percent. This cap does not apply to new construction, even for homes rebuilt after a disaster

The bill would allow counties to pass policies that return assessed values of qualifying properties to levels recorded in the 2019-2020 tax year. Counties could then apply the 3 percent annual increase from that point on.

Qualifying homes must be the primary residences of those who occupied the property prior to the fires and may not be larger in square footage than the previous home. The exemption would remain in place until the property was no longer the primary residence of the applicant, after which normal standards apply.

Counties could later change or repeal this policy, while any special assessed values previously granted would continue under the terms in effect at the time they were approved.

Both the income tax exemption and assessed value adjustment were the subjects of similar bills during the 2023 legislative session, which died in committee.

Previous Article

Gates church presents Luke Yates in free concert

Next Article

County extends mental health outreach

You might be interested in …