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Tax Exemption Proposed For State Of Emergency Settlements

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Sacramento, CA — A bill being reviewed in the California legislature would eliminate the taxing of dollars that people receive in settlements from utilities or other private entities in response to events like major wildfires.

Currently, settlement payments paid by utilities, such as PG&E, are considered taxable income. In recent years the legislature has voted to make an exception for settlements paid in response to incidents like the Camp and Zogg fires. A new bill would make it a permanent change for future similar type incidents. It would only cover payments if there is a State of Emergency declared for that county.

The author of the bill, Republican Brian Dahle, says, “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. The last thing we should be doing is taxing individuals on those payments,”

Dahle adds that it would end the “cumbersome process of waiving taxes one disaster at a time.”