Flood waters have devastated Middle Tennessee and in an effort to relieve some of the financial burden, lawmakers have approved of two measures that provide tax relief to flood victims. A state sales tax refund has been approved and local property tax relief is available in Nashville.
Property Tax Reductions for Damaged Homes
On May 24, 2010, Tennessee lawmakers passed a bill that allows local taxing districts to reassess homes that have been damaged by the recent flood waters. Davidson County (Nashville) has implemented the program and other localities can choose whether or not to approve it.
Under the new law, any home that has been deemed unfit for use for more than 30 days or any home that sustained damages equal to more than 50 percent of the home’s pre-flood value would be eligible for an assessment reduction.
Tennessee businesses, which are required to pay property taxes on tangible personal property, are also eligible for tax relief. Under this law, businesses can receive reduced assessments for their property if their business was destroyed, demolished, or substantially damaged and is not replaced or restored by September 1, 2010.
In order to receive a new assessment, you have to file an application with the Davidson County Property Assessor’s Office. The deadline is September 1, 2010.
Sales Tax Refunds for Rebuilding
A sales tax refund program for victims of the flooding was just signed by the governor on June 16, 2010. This new law will allow any household that qualified for FEMA aid to receive a sales tax refund for items purchased between May 1, 2010 and September 30, 2010 to repair flood damage. This can be anything from dishwashers and ovens to furniture and building supplies.
Sales taxes paid on major appliances and furniture will be reimbursed for each item costing $3,200 or less per item. Sales taxes on residential cleaning and building supplies (tools, lumber, drywall, paint, etc.) will be reimbursed for each item costing $500 or less per item. Items must be purchased by the individual receiving FEMA assistance and not by a contractor. Qualified individuals can file only one claim for a refund and the sales tax refunds are limited to a maximum of $2,500 per residence.
To receive a refund, a refund claim form along with proof of FEMA assistance and copies of receipts for eligible purchases have to be submitted to the Tennessee Department of Revenue. The last day to request a refund is November 30, 2010.