Tax Alert: Texas State Tax Relief for Hurricane Harvey Disaster Areas

The Texas Comptroller of Public Accounts announced that taxpayers in declared disaster areas affected by Hurricane Harvey can delay paying state taxes while recovering from storm-related losses.

Businesses located in the disaster areas can call the Comptroller (800-252-5555) and request an extension of up to 90 days to file and pay certain monthly and quarterly state taxes.   Alternatively, affected taxpayers can request an extension by contacting the Comptroller at the following e-mail address:  extensionrequests@cpa.texas.gov.

In addition, several disaster recovery services are exempt from Texas sales tax including:

  • The cost of labor to repair storm-damaged nonresidential property including office buildings and retail establishments. To qualify, the labor charges must be separately stated on a repair bill.   The cost of labor for residential repairs is not subject to sales tax.
  • Services used to restore storm-damaged tangible personal property including dry cleaning of clothing and draperies, rug and carpet cleaning, and appliance repair. These services are exempt for both residential and nonresidential personal property.

Beneficial tax treatment may also be available for certain out-of-state businesses that perform disaster related services in Texas.  Qualifying companies may be exempt from business registration and tax payment and filing requirements (including franchise Tax, sales tax, and use tax) while performing disaster-related services in Texas during the disaster recovery period.

The Texas Comptroller has provided a list of frequently asked questions on its website which is available at the following link:

https://comptroller.texas.gov/taxes/resources/disaster-relief.php

If you have any questions or require any additional information about these items, please contact your Whitley Penn LLP tax advisor.

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