Are purchases made using disaster relief payments subject to Wisconsin sales and use tax?
The Federal Emergency Management Agency (FEMA) and the American Red Cross (ARC) have been providing relief to Hurricane Katrina and other disaster victims by distributing funds to those in need. Based on information from FEMA and the ARC, nearly $800 million has already been distributed to disaster victims. The funds are being distributed to the disaster victims using various methods including: (1) making electronic transfers directly into a disaster victim’s bank account; (2) issuing U.S. Treasury checks to a disaster victim; (3) issuing FEMA debit cards to a disaster victim; (4) providing the disaster victim with an ARC Disbursing Order (ARCDO); and (5) providing the disaster victim with a Client Assistance Card (CAC). The Wisconsin sales and use tax treatment of purchases made using each of these payment methods is described below. • FEMA Electronic Funds Transfer and U. S. Treasury Checks: Purchases made by disaster victims with funds from FEMA that have been electronically transfe
