Texas tax breaks help in disasters — just not public health disasters

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A man walked through floodwater after surveying his property in Rockport, which was hit by Hurricane Harvey in 2017. REUTERS/Adrees Latif

Gov. Greg Abbott has declared a public health disaster during the spread of the new coronavirus in Texas — but a pair of tax breaks designed to help people prepare for or recover from disasters in the state won’t be available to Texans hurt by this crisis.

Texas has laws for tax-free days to purchase disaster readiness supplies and exemptions to ease the burden of taxes on property harmed by disasters. But these tax breaks were designed to meet the needs prompted by natural disasters like hurricanes, floods or wildfires. The laws as written don’t address the economic and supply demands of the coronavirus pandemic.

The disaster readiness sales tax holiday will be from April 25-27. The holiday was designed to allow Texans to purchase supplies like portable generators, hurricane shutters, batteries, coolers and tarps. Personal protection equipment needed for the coronavirus pandemic — including face masks, gloves and cleaning supplies — won’t qualify, the comptroller’s office made clear Tuesday. Texans can still buy tax-free personal hygiene items like hand sanitizer, soap and wipes with a “drug facts” label, since they are always exempt from sales taxes.

Similar restrictions apply for property tax savings. Last year, the Legislature passed a law saying property damaged in a natural disaster can be eligible for exemptions ranging from 15% to 100%, depending on the extent of the damage.

This week, Attorney General Ken Paxton issued an opinion that the law only applies to property that has been physically damaged. “Purely economic, non-physical damage to property caused by the COVID-19 disaster” is not eligible, he said.

“Had the Legislature intended to address economic losses or a general decrease in property value due to factors beyond the physical condition of the property, it could have used different language that encompassed those losses,” Paxton wrote.

Sen. Paul Bettencourt, R-Houston, said he requested the opinion because there was a question as to whether non-physical damage, like the historic economic fallout from the pandemic, could qualify for property tax exemptions.

Bettencourt said he wasn’t surprised by Paxton’s opinion since the law was oriented toward physical damage.

“There wasn’t even a word of ‘economic damage’ in it at all,” Bettencourt said.

State officials said Tuesday that there was little that could be done about the breaks not applying to this crisis — the language of the laws is clear. Neither law can be changed to fit the need of the current public health crisis until the Legislature is back in session, which is scheduled to happen in January 2021.