If you suffered an uninsured (or under-insured) loss of personal property as a result of Hurricane Katrina, you may qualify for federal and state tax relief.

Federal Tax Refunds

For federal income tax purposes, the loss you suffered from Hurricane Katrina is classified as a casualty loss. Casualty losses are taken as an itemized deduction on your federal income tax return and are normally reduced by 10% of your adjusted gross income. However, Congress has passed a law that eliminates the 10% reduction for those who suffered casualty losses as a result of Hurricane Katrina.

The amount of the casualty loss is the difference between fair market value of the property before the casualty event and the fair market value of the property immediately after the event, less any insurance proceeds. For example, assume you have a house that sustained $60,000 of damage, plus the contents (valued at $50,000) were totally ruined. If your insurance covered the total property damage of $60,000 but only $25,000 of the contents, you would have a $25,000 loss that you could claim as an itemized deduction on your tax return in 2005.

You will need to make an itemized list of the damaged property and its value, just as you would for an insurance adjuster.

For more information, visit the IRS site.

State Tax Refunds

The State of Louisiana offers a refund of sales tax paid on uninsured (or under-insured) property that was ruined as a result of Hurricane Katrina. You do not need receipts to prove the amount of tax paid, and there are no restrictions based on the length of time since the items were purchased. You will need to make an itemized list of the damaged property and its value, just as you would for an insurance adjuster.

You have up to 3 years following the loss to file a claim.

To qualify for the refund, the property must have been

• Movable personal property, meaning that the property was not permanently attached to the home (for example, a dishwasher or a ceiling fan would not be considered movable property)
• Not insured (or not fully insured)
• Used by a person, not by a business or organization
• Used in your primary residence (second homes do not qualify)
• Located at your primary residence when the storm occurred

Sales tax refunds are not allowed for damaged automobiles, boats, or ATVs.

Please be aware that, due to attempts to prevent fraud, the Department of Revenue is taking a long time to process these returns and issue refunds. You should be prepared to wait several months at a minimum to receive your refund.

For more information, download the form and instructions from the Louisiana Department of Revenue or watch their online information video. You can also call them at (225) 219-7318 or (225) 219-0102.