Avoid Tax Disaster: Take Advantage of Texas Disaster Area Exemptions

On February 12, 2021, Governor Greg Abbott declared all 254 counties in Texas a disaster area due to severe winter weather. This makes Texas taxpayers eligible for the following tax benefits:

Nonresidential Repair Sales Tax Exemption

With the sustained freezing temperatures, many homes and businesses suffered damage from frozen or burst pipes. Under normal circumstances, repair or remodeling work to nonresidential real property is fully taxable. However, in a disaster area, separately stated labor charges to repair disaster damage are exempt from sales tax. Lump sum repair bills remain taxable, so, if you have nonresidential repair needs as a result of the winter storm, a time and materials repair contract can save taxes on the labor portion of the repair.

Personal Property Repair Sales Tax Exemption

Normally, repairing personal property is a fully taxable charge. But in a disaster area, separately stated labor charges to repair or restore personal property damaged by the disaster becomes exempt. This includes furniture and any other personal property.

State Taxes Payment Extension

The due date for state taxes and fees, originally due February 20, 2021, has been extended to March 1, 2021—including sales/use tax, hotel occupancy tax, direct pay, battery sales fee, 911 fee, Oil & Gas Well Servicing Tax. This is an automatic extension and taxpayers do not need to file anything to obtain the extension.

If you have any question whether a tax exemption applies to your business, please contact a Weaver SALT professional today.

© 2021