Instead, economic compensation thought to be equivalent to the victim's damage is awarded. Another kind of damages that toxic tort plaintiffs may be able to recover are punitive damages. Punitive damages are intended not to compensate the victim for losses but to punish the defendant's conduct. Although punitive damage awards receive a lot of media attention, they are in fact quite rare. The amount of punitive damages is usually based on the wealth of the defendant and the magnitude of its bad conduct.
Some states require that a portion of the punitive damages awarded be paid to the state.
Whereas the plaintiff is not taxed for compensatory damages, the amount of punitive damages that he or she receives is subject to federal income tax.