Bill may bring tax relief to Dry Creek

Gary B. Gray • Mar 26, 2013 at 9:07 PM

State legislators are not yet satisfied with the relief they feel is due Washington County’s Dry Creek residents affected by the Aug. 5 flood.

Sen. Rusty Crowe, R-Johnson City, and Rep. Matthew Hill, R-Jonesborough, are sponsoring a companion bill that would provide sales tax refunds to Dry Creek residents who are rebuilding or repairing homes either damaged or destroyed in the flood.

The bill was moved out of a Senate Finance subcommittee Monday despite opposition from officials with the state Department of Revenue, who argue this could set a precedent for other disasters that have not been recognized by the Federal Emergency Management Agency.

Crowe said from Nashville on Tuesday that the bill, which would cost the state about $145,000 in one-time expenditures, will likely see stiff opposition from members of the Senate Finance Committee.

“Essentially I told members of the subcommittee that I wanted to do the same thing that was done in Nashville when they had flooding in 2010,” he said. “I think the maximum refund at that time was about $2,500. I told the committee we did not get federal recognition on this.

“What I argued, however, was that the damage and devastation was just as tough on peoples’ lives in Dry Creek area and that they are worthy of assistance.”

Crowe said if the bill does not go forward, he will try to get an appropriations amendment for the one-time money.

The bill amends TCA Title 67 and establishes tax-relief program for victims of natural disasters in Tennessee occurring between Aug. 4-6.

Should the bill pass, any person certified as a disaster victim by the county emergency management agency whose primary residence was damaged or destroyed as a result of a natural disaster in Tennessee occurring during those days would be eligible for a tax refund.

Claimants would be entitled to a refund equal to the total amount of state and local sales and use tax paid to retailers as a result of purchases of major appliances, residential furniture or residential building supplies. The total amount refunded under this bill in connection with any one residence could not exceed $2,500.

“It will go before the Senate Finance Committee next week,” said Washington County Mayor Dan Eldridge. “Essentially, he has proposed that the people affected in Washington County be treated the same as the people in Nashville. There were numerous people killed in that disaster and thousands of homes were destroyed.

“While the disaster in Washington County was not on this scale, the families still lost everything they had. From my perspective, it certainly is fair. At this point, every little bit helps.”

Should the bill be successful, claimants would be allowed to file only one natural disaster claim for refund with the Department of Revenue, and claims must be filed by Dec. 31. The refund would be made by the department directly to the claimant and not by the retailer to the claimant.

All natural disaster refund claims must include satisfactory proof of certification as a disaster victim by the county emergency management agency, and all records must be preserved and verified. All refunds under this bill will be paid from the state’s general fund.

“Whether it be floods, or the tornadoes, Washington Countians are certainly deserving of this assistance,” Hill said.

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