February 17, 2011

Tax Relief Available to Individuals Affected by Flooding

The Tennessee Department of Revenue is reminding Tennesseans affected by flooding and other effects of the severe storms last May of recent legislation enacted by the General Assembly providing Tennessee sales tax relief for qualified individuals who must replace damaged or destroyed items or restore residences.

Eligible items include major appliances and residential furniture used in the individual’s primary residence with a purchase price of $3,200 or less per item, and building supplies used for restoration of the individual’s primary residence with a purchase price of $500 or less per item.

Individuals receiving disaster assistance from the Federal Emergency Management Agency (FEMA) as a result of the flooding and severe storms that occurred in Tennessee May 1-8, 2010, may request a refund of Tennessee sales tax paid on eligible items purchased between May 1, 2010 and Sept. 30, 2010.

“The Department of Revenue is supportive of this new legislation,” said Revenue Commissioner Reagan Farr. “We are pleased that we can play a small role in responding to the needs of Tennesseans and the damages that occurred due to this tragedy.”

Qualified individuals must submit receipts showing sales taxes paid on eligible items and may file only one claim for refund. The maximum amount of refund available to any one residence is $2,500.

Items eligible for refund must be purchased directly by the individual receiving FEMA assistance except when an individual hires a contractor to install an eligible item. The contractor must charge the individual for the items and for the Tennessee sales tax paid on the items.

Any individual submitting a claim for refund will be asked to provide documentation verifying the assistance they received from FEMA. The Natural Disaster Claim for Refund form and detailed information on claiming a refund is available at www.Tn.gov/revenue.

The Department of Revenue may assess a civil penalty up to $25,000 against any person that knowingly files a false or fraudulent claim for refund.

To learn more about the Department of Revenue, log on to www.TN.gov/revenue.