A number of states offer immediate property tax relief related to disasters and calamities. The recent government-mandated shutdowns and other restrictions, including stay-at-home orders, related to the COVID-19 pandemic may trigger these relief provisions.
The states we have studied that have the most promising disaster relief provisions are California, Texas, Illinois, Virginia and Washington.
For example, in California, taxpayers have one year to file a calamity claim with the local assessor. The taxpayer must demonstrate that the COVID-19 government orders resulted in “restricted access” to their property and also prove that their property was damaged by at least $10,000. We believe that the combination of the stay-at-home orders, social-distancing requirements and maximum group limits have effectively closed many businesses, including hotels, and that such closures may satisfy the “restricted access” standard.
Another promising jurisdiction is Texas. Recently enacted legislation allows taxpayers to claim disaster relief if they have suffered at least 15 percent damage as a result of a governor-declared disaster. Gov. Greg Abbott declared a COVID-19 disaster on March 13. The time for filing the claim is short. It must be filed 105 days after the Governor’s disaster declaration, or by June 25.
In addition to disaster-related claims, hotel owners and operators also should be prepared to challenge their 2021 property tax valuations. We have found that much of the fact finding related to the preparation of the disaster related claims can be used as a foundation for the 2021 valuation case.
Eric Tresh is a partner at law firm Eversheds Sutherland, Douglas Mo is of counsel and Hanish Patel is an associate.