Tax relief for victims of the Dixie Fire and other utility-caused disasters is poised for approval by federal legislators as part of the Federal Disaster Tax Relief Act of 2023.
The bill, originally proposed by Reps. Doug LaMalfa and Mike Thompson, is part of a new bipartisan tax framework package deal adopted Jan. 16 by the House Committee on Ways and Means and the Senate Committee on Finance. The legislation would include victims nationwide of all disasters caused by utility companies, railroads and other corporations.
Plumas County Supervisor Kevin Goss was part of a lobbying effort on behalf of his constituents, who suffered catastrophic losses during the 2021 Dixie Fire. His goal, he said, is to get relief from federal taxes for those who receive compensation payments for their losses from Pacific Gas and Electric Co., which California fire investigators blamed for equipment failures that ignited the state’s single largest fire.
Goss was in Washington, D.C., earlier this month, meeting with 25 staff members representing senators from states that include Hawaii, Oregon, Montana and Idaho. All have either experienced or are prone to the conditions that produce megafires, he said.
His Plumas County district, which includes Greenville, was devastated by Dixie, which started July 13, 2021, and burned approximately 963,309 acres in Plumas, Lassen, Butte, Shasta and Tehama counties. The area is part of the Feather River watershed, which provides most of the water that flows into the State Water Project and, in turn, into the homes and businesses of 27 million Californians.
Many homeowners and business owners whose properties were destroyed by the Dixie Fire are in the process of receiving payments for their losses from PG&E. Those payments are currently subject to federal taxes as income.
If approved, the federal legislation, renamed HR 5863, would exempt all wildfire relief payments from federal income taxes. It would also exempt taxation on legal fees, emotional distress, lost wages and additional living expenses, LaMalfa said in a statement on his website. The bill is fully paid for under this bipartisan agreement by repurposing funds previously authorized for COVID relief, he said.
“What happens in Washington we can’t always control.”
Kevin Goss, Plumas County supervisor
By avoiding federal taxes on their compensation payments, fire victims would have the additional income to pay the increased costs of rebuilding in a way that makes their new structures better able to survive fire, Goss said. He called Plumas a “frontier county” that needs to not just rebuild but rebuild with resilience for both human and natural communities. “As the headwaters of the largest watershed in California, we need to rebuild sustainably,” Goss said.
Goss has been working with After the Fire USA, a nonprofit organization that supports communities as they recover from fire, rebuild their lives, and reimagine a more resilient future. It is his second trip to the national capital to meet with legislators to explain the importance of relief from federal taxes for victims of Dixie and other fires.
Goss told his fellow Plumas County supervisors Jan. 16 that he is optimistic about passage of HR 5863. “We got ourselves into the bill. That was a humongous step forward,” he said.
Now the bill has to pass. “What happens in Washington we can’t always control,” Goss told The Plumas Sun.
