Dahle introduces state of emergency tax exemption bill

Senator Brian Dahle recently introduced SB 927, which excludes settlement payments made in connection with any declared state of emergency from taxable income.

Brian Dahle

When someone loses property to a fire, flood or other catastrophe and receives a settlement as compensation from a utility or other private entity, federal and state laws consider that taxable income. This is an unjust burden on Californians trying to rebuild their homes and lives after disasters.

Last year Dahle introduced similar legislation excluding income taxes for individuals who received settlements from Pacific Gas and Electric in connection with the Zogg Fire. The bill passed unanimously through both houses, displaying legislators’ broad support for excluding these settlements from being taxed.  Recent bills have also exempted settlements from the Camp Fire and other disasters.

“This bill will help those who have been through a very challenging and difficult time to put every dollar towards rebuilding their lives and living the California Dream,” Dahle said. “The last thing we should be doing is taxing individuals on those payments.”

SB 927 would end the recent cumbersome practice of waiving taxes one disaster at a time, and instead create a clear statewide policy that supports traumatized victims.