Sales Tax Exemption for Los Angeles County 2025 Wildfire Disaster Victims!

Presented by Reza Akef & Jeremy Padawer

August 9, 2025

 
Introduction
We DEMAND that the State of California and the County of Los Angeles with cooperation of the City of Los Angeles and City of Malibu enact legislation to waive state and local sales tax on all eligible building materials and services directly related to the reconstruction of homes and businesses destroyed in the Palisades and Eaton Wildfires. Eligibility would be limited to property owners in the declared disaster zone who filed a Calamity Claim with the Los Angeles County Assessor’s Office and to property owners in the declared disaster zone who purchased a property with a verified calamity claim.  Collecting the revenue from state and local sales tax is a collective INJUSTICE.  It is a multi-billion dollar, unfair, economic WINDFALL on the back of an unprecedented disaster!

Disaster Recovery Should Not Be Taxed – Sales tax on rebuilding effectively penalizes victims for the cost of returning to their homes or businesses. Families are not “making a purchase” in the traditional sense. They are replacing what was lost due to a declared disaster.

Quicker Return to Rebuild – No sales tax would hasten a return for many in the Palisades and Eaton Wildfire disaster zones. For many residents, the high rebuilding costs combined with 10% sales tax will make returning financially impossible. Waiving the sales tax would reduce the risk of mass property sell-offs to developers and preserve the character and stability of the various communities.

Economic Multiplier – Dollars saved on sales tax will be invested in contractors, labor, materials and supporting small and local businesses. The State and County benefit from a faster recovery when homes and businesses are built faster through other tax revenue sources like property taxes, income taxes and payroll taxes as we rebuild.

Help Bridge the Gap between Insurance and Rebuild Costs – Survey after survey shows that people are either underinsured, uninsured, or are having a difficult time with their insurance to rebuild. Dollars saved on sales tax will help cover the insurance shortfalls for those want to rebuild.

Temporary Measure, Lasting Relief – Removing the Sales Tax for those in the disaster zones would be temporary for just over five years, expiring on December 31, 2030. Property owners will have an incentive to rebuild sooner. At the same time, government is granting victims much needed relief and a symbol of partnership and aid in the rebuild effort.

The Savings Are Substantial – If you build a $3 million dollar structure, you could save as much as $200,000 - $300,000 not having to pay 10% sales tax. In construction, more than 50% of the cost has sales tax. In the burn area, at least 13,000 structures of various sizes need to be rebuilt. If on average each one saves $100,000 for not paying sales tax, that is saving our community rebuild at least $1.3 BILLION DOLLARS!

It’s the Right Thing to Do – California and Los Angeles has an opportunity to demonstrate compassion. Removing the sales tax burden on rebuilding would not only accelerate recovery but also strengthen the community, preserve long-term state revenues through a faster restoration of the local economy and through real property taxes, and increase lot values. It’s just good, fair, just policy to do the right thing by victims of the devastating wildfires.  Do NOT COLLECT tax on the back of this travesty.

Below is a sample legislative policy for the Los Angeles County Board of Supervisors. This version includes the sales tax relief to include both residential and commercial properties, and includes the maximum exemption to a substantial amount to reflect the significant costs of the major rebuilding ahead for our communities.

This would ALSO NEED TO BE DONE AT THE STATE LEVEL.  Sales tax is broken out about 6% state level and 4.25% local level.  We'd need both.

 
Ordinance Title:
"Los Angeles County Wildfire Recovery Sales Tax Relief Ordinance for Residential and Commercial Properties"

An ordinance to amend the Los Angeles County Code to provide a sales and use tax exemption for building materials, fixtures, and certain essential furnishings and equipment purchased for the repair or rebuilding of residential and commercial properties in a County-designated wildfire disaster area.

 
Section 1: Findings and Declarations
The Board of Supervisors finds and declares that:

• Recent wildfires have caused catastrophic damage to both homes and businesses within Los Angeles County.
• The financial burden of rebuilding is immense, and providing sales tax relief will directly assist property owners, both residential and commercial, in their recovery.
• The recovery of businesses is essential for the economic vitality and employment stability of the affected communities.
• It is in the best interest of the County to support all property owners by minimizing financial obstacles to rebuilding and encouraging them to remain in the affected communities.
• The authority to create a sales tax exemption for local transactions rests with the County.

Section 2: Definitions

• "Disaster Area" means any geographic area within Los Angeles County that has been officially declared a state or federally designated wildfire disaster area.
• "Property Owner" means a natural person or legal entity who is the legal owner of a Residential Property or a Commercial Property located within a Disaster Area.
• "Residential Property" means a single-family dwelling, condominium, or mobile home.
• "Commercial Property" means a building or structure used for business purposes, including but not limited to, retail, office, industrial, and agricultural uses.
• "Qualified Purchase" means the purchase of tangible personal property, including but not limited to, building materials, fixtures, major appliances, essential furnishings, and business equipment for the sole purpose of repairing or rebuilding a Residential or Commercial Property in a Disaster Area.
   

Section 3: Sales and Use Tax Exemption

1. Eligibility: A Property Owner is eligible for a full exemption from the local and County portion of sales and use tax on Qualified Purchases made for a Residential or Commercial Property. This exemption does not apply to the state sales tax portion, as that is governed by the State of California.
2. Timeline: This exemption shall apply to all Qualified Purchases made between the date of the official disaster declaration and December 31, 2030.
3. Maximum Exemption: To address the full scope of rebuilding costs, the total amount of sales and use tax exempted per Residential or Commercial Property will be capped at a maximum of $2,000,000.00 per Residential or $20,000,000.00 per Commercial Property.
4. Claiming the Exemption:

• Property Owners must first submit a "Calamity Claim" with the Los Angeles County Assessor's Office to verify the property's damage.
• Upon approval of the Calamity Claim, the Assessor's Office will issue a "Wildfire Recovery Sales Tax Exemption Certificate".
• Property Owners will present this certificate to retailers at the time of purchase to receive an immediate exemption on the local sales tax. For online purchases, Property Owners can file for a refund from the Los Angeles County Treasurer and Tax Collector (TTC).
• The TTC will be responsible for administering the exemption and managing the refund process for overpaid taxes.

 
Section 4: Administration and Enforcement

• The Los Angeles County Treasurer and Tax Collector, in coordination with the California Department of Tax and Fee Administration, will be responsible for the implementation and enforcement of this ordinance.
• The TTC shall develop and make available all necessary forms and procedures for Property Owners to claim their exemption or refund.
• Any person who fraudulently claims a sales tax exemption under this ordinance shall be liable for the unpaid tax, plus penalties and interest.

Again, we'd need to also achieve this ordinance at the state level as well to save the entire 10%+.  Let's go!

Sincerely,

• Jeremy Padawer - https://www.pacificpalisades.com
• Reza Akef - Polaris Homes
• Contact - NoFireSalesTax@Gmail.com