WASHINGTON (February 1, 2025) – WASHINGTON – Sen. John Kennedy (R-La.) today joined Sens. Thom Tillis (R-N.C.) and Alex Padilla (D-Calif.) and colleagues in reintroducing the Disaster Mitigation and Tax Parity Act. The bill would exempt state rebates for Americans who harden their homes in preparation for natural disasters and floods from federal taxation.
“Louisianians invest their hard-earned money in protecting their homes from hurricanes and flooding. When states provide a rebate for this disaster mitigation, it’s foolish and unfair to tax it,” said Kennedy.
Louisiana is one of several states that incentivize citizens to fortify their homes against natural disasters by offering rebates for protection measures. Current law requires Louisianians to pay federal taxes on rebates that come from a source other than the federal government. The Disaster Mitigation and Tax Parity Act would make sure Americans do not have to pay federal taxes on state-provided rebates.
“This commonsense legislation takes a critical step toward empowering individuals and communities to better protect themselves from the devastating effects of natural disasters like Hurricane Helene. By excluding qualified catastrophe mitigation payments from income tax, we are incentivizing property owners to make the necessary improvements that reduce damage and save lives. This proactive approach to disaster preparedness not only helps families rebuild faster but strengthens our resilience in the face of future disasters,” said Tillis.
“The devastating fires in Southern California underscored the urgent need to empower homeowners to take proactive steps to keep their families and homes safe. As these disasters become more frequent and more extreme due to the climate crisis, we should incentivize—not penalize—taxpayers for protecting their homes. That’s why the Disaster Mitigation and Tax Parity Act would provide a tax exemption on payments from state-based programs for homeowner investments in critical disaster-related improvements,” said Padilla.
The full bill text is available here.
