Greenville Reporter

Congressman Greg Murphy, M.D., has co-introduced the Disaster Mitigation and Tax Parity Act alongside Representative Doug LaMalfa. This bipartisan and bicameral legislation aims to exclude qualified catastrophe mitigation payments from being counted as gross income for federal tax purposes.

Murphy stated, "Catastrophe mitigation payments used to improve natural disaster resilience should not be treated as a source of income, and North Carolinians should not be taxed for them." He emphasized the importance of preparing for storms in Eastern North Carolina, which often faces deadly hurricanes. According to Murphy, preparation is a valuable investment that should be incentivized rather than taxed. The bill seeks to empower individuals to protect their homes before disasters occur, potentially reducing or eliminating catastrophic damage.

LaMalfa added, "Homeowners shouldn’t be hit with unexpected federal taxes just because they received rebates through state and local programs." He pointed out the current disparity between how federal and state disaster assistance is treated, which results in an added tax burden for many homeowners during challenging times. LaMalfa stressed the need for disaster mitigation efforts to genuinely reduce risks and assist people in rebuilding without having their aid diminished by federal taxes.

Gina Hardy, CEO of the North Carolina Joint Underwriting Association, noted that the North Carolina Insurance Underwriting Association has invested over $100 million in programs like Strengthen Your Roof grants. These initiatives help policyholders fortify their homes against storms. Hardy expressed support for Murphy's legislative proposal: "Adequate preparation for storms is a valuable investment that should be incentivized, not taxed."

The Strengthen Your Roof program provides grants to residents in North Carolina to enhance roof resilience against wind damage. More than 4,500 households in North Carolina’s Third District have participated in this initiative. However, these grants are currently considered taxable income by the IRS, leading thousands of recipients to pay taxes on them.

The proposed bill defines a “qualified catastrophe mitigation payment” as funds received specifically for property improvements aimed at reducing potential damage from windstorms, earthquakes, floods, or wildfires.