Wildfire Victim Tax Relief and Recovery Act

S 496, the Wildfire Victim Tax Relief and Recovery Act, provides tax relief for residents affected by specific 2024 Texas Panhandle wildfires (Smokehouse Creek, Windy Deuce, Grape Vine Creek, 687 Reamer, and Roughneck fires). It treats payments received for wildfire-related losses (including property damage, closing costs, or inconvenience) as qualified disaster relief under tax code section 139(b), making them tax-free. The bill also amends tax code provisions to allow livestock owners to defer taxes on sales due to fire (similar to existing flood relief rules), effective for taxable years after 2023. This directly benefits Texas residents who incurred losses from the named wildfires and received compensation from government agencies, Xcel Energy, or their insurers.