Legislation Would Provide Common-Sense Deductions, Credits for Victims of Recent Flood, Black Forest Fire, Waldo Canyon Fire, High Park Fire
U.S. Senators Michael Bennet and Mark Udall pressed their colleagues to quickly take up legislation they and several of their colleagues introduced today to provide common-sense tax relief for disaster victims in Colorado. The National Disaster Tax Relief Act would help the victims of the September 2013 flood, 2013's Black Forest Fire, and 2012's Waldo Canyon and High Park wildfires.
The legislation is similar to other tax-relief bills Congress has passed in the wake of the Sept. 11, 2001, terrorist attacks; 2005's hurricanes Katrina, Rita and Wilma; and other recent major disasters.
"Through the catastrophic wildfires and devastating floods over the last few years, we have been resilient and are rebuilding better than before," Bennet said. "This bill will help boost those recovery efforts by providing crucial tax relief to families and communities who are continuing to recover."
"Colorado has endured hell and high water over the past two years. I have been proud to champion our state's rebuilding effort, but we need to provide additional tax relief for disaster victims and business owners who are still working to rebuild in the wake of 2012 and 2013's wildfires and flood," Udall said. "The National Disaster Tax Relief Act ensures we provide the same helping hand to Coloradans that Congress has extended to Americans in the wake of other major disasters."
The National Disaster Tax Relief Act would apply to individuals and businesses in states that received major disaster declarations in 2012 or 2013. The bill includes provisions that would:
- Provide disaster victims with a deduction equal to the value of their losses;
- Waive the penalty tax if disaster victims make an early withdrawal from a retirement plan;
- Allow businesses to create natural disaster funds with pre-tax dollars;
- Provide 50 percent bonus depreciation for capital purchases on commercial or residential rental properties in disaster areas; and,
- Allow states to issue tax-exempt Disaster Recovery Bonds.
Bennet and Udall have led efforts to secure federal aid for Colorado communities and families devastated by recent disasters. Their efforts helped Colorado secure more than $250 million through HUD's Community Development Block Grant- Disaster Recovery (CDBG-DR) Program for flood relief. They also successfully secured $450 million in emergency federal transportation funds to repair Colorado's road, bridges and highways damaged in the flood. Udall and Bennet also led efforts to secure federal aid to restore watersheds damaged by the recent mega-fires.