April 14, 2005 | Read Time: 1 minute
The House of Representatives has passed legislation that would prevent the taxation of federal money channeled by charities and others to victims of disasters. The Senate has yet to act on the bill.
The Federal Emergency Management Agency sends “hazard mitigation” grants to nonprofit groups, states, local governments, and tribes, which then distribute the money for projects that lessen the effects of natural disasters, such as putting houses on stilts to reduce the risk of flood damage. The IRS said last year that property owners that receive such grants could be required to pay tax on them.
Supporters of the bill, HR 1134, said that requiring a tax on grants that are meant to ease the burden of disaster recovery is unfair.
