Friday, September 12, 2008

States using tax breaks to convince residents to prepare for hurricanes

So what exactly would it take for you to be prepared for a disaster? How about a big fat tax break?

Two U.S. states are hoping that giving residents a pass on taxes for emergency supplies will convince residents to get ready for hurricanes. This May, Virginia and Louisiana — both states that have recently been in the paths of storms — each held sales tax holidays in anticipation of hurricane seasons.

Virginia's Hurricane Preparedness Sales Tax Holiday, held from May 25-May 31, took place for the first time, but organizers are planning to hold it annually through 2012. As long as each hurricane preparedness article cost $60 or less, residents could fill their shopping carts with emergency supplies — such as batteries, flashlights, smoke detectors, bottled water, can openers and first aid kits — and not have to pay taxes on them. Portable generators and other power supplies were also tax-free if the sales price was $1,000 or less. Such supplies came in handy in September, as tropical storm Hanna drenched the state with rain and knocked out power in some regions.

Louisiana, still recovering from the effects of Hurricanes Katrina and Rita in 2005, also held its first Hurricane Preparedness Tax Holiday from May 24-25. Louisiana residents were allowed to purchase a long list of items tax-free as long as the total was less than $1,500. Supplies that qualified for the tax break were many of the same items on the shopping list in Virginia, but also included storm shutter devices, carbon monoxide detectors and more. With Gustav hitting the state this August, the state's tax-free holiday came none too soon.

Virginia’s and Louisiana's tax-free holidays were both held for the first time this year, but they weren't the first states to cut residents such a break: In the aftermath of the 2004 hurricane season, Florida paved the way by creating a hurricane preparedness sales tax holiday. Unfortunately, the state legislature did not renew the tax holiday for 2008.

Whether or not you live in a hurricane-prone region, it makes sense to be prepared and to have emergency supplies on hand. And if your state is giving you an incentive to do so, it's a great idea to take advantage of it.

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