The U.S. Senate today passed a provision championed by Senators Ted Stevens (R-Alaska) and Lisa Murkowski (R-Alaska) that would protect victims of the Exxon Valdez oil spill from tax burdens associated with the punitive damages awarded in Exxon Shipping Co. v. Baker.
"This was a hard-fought battle, and while I disagree with the reduction in the award, Senator Murkowski and I want to keep the Federal Government from taking any more money out of the pockets of Alaskans," said Senator Stevens. "We recognized the need to help the plaintiffs with the tax burden they would otherwise face when they receive this award. As we move further into what is becoming a rough year financially for all of us, we are fighting to see that these Alaskans don't lose even more to taxes."
"While I am extremely disappointed in the Supreme Court's decision to reduce the punitive damage award to the victims of the Exxon Valdez oil spill, this legislation will help lessen the tax burden and allow the 30,000 plaintiffs to keep more of the compensation they receive," said Senator Murkowski.
The Murkowski-Stevens amendment would specifically:
· Authorize the EVOS victims to average payments over three years for income tax purposes similar to current law for fishermen.
· Enable plaintiffs to contribute up to $100,000 of their settlement to a qualifying retirement account or pension plan.
· Exempt plaintiffs from having to pay self-employment taxes or payroll taxes on any payouts from this case.