Support Needed for Conservation Rebate Tax Parity

AMWUA and the Alliance for Water Efficiency are seeking support on two bills that would amend the tax code to make water conservation rebates tax exempt, S. 1464 and H.R. 448. 

S. 1464 and H.R. 448 would amend Section 136 of the Internal Revenue Code, which makes energy conservation rebates provided by utilities exempt from federal income taxes, to include rebates provided by water utilities for water conservation and stormwater management. 

Currently, the Internal Revenue Service (IRS) insists that rebates for homeowners who replace water-thirsty lawns, install graywater capture systems or purchase new water-efficient appliances are considered income to the recipient and subject to federal taxes. The IRS and Treasury Department have stated that they cannot grant administrative relief from taxing such rebates and that Congress must act to amend the Internal Revenue Code.

Rebates are incentives that offset the cost to homeowners who take steps to make their homes more cost effective. Taxing rebates as if they are income punishes residents, in a sense, for being stewards of our water resources.  Energy rebates have long been tax exempt. AMWUA, its members, and the Alliance, feel strongly that water conservation rebates should have equal treatment under the tax code.

Water providers, NGOs, and businesses are urged to sign onto letters organized by the Alliance for Water Efficiency. It is important to demonstrate broad stakeholder support for these bills. Review the two support letters here--S. 1464 and H.R. 448--then click here to email AWE to add your organization's name and logo. Deadline to be included is Friday, November 3, 5:00 p.m. Central.

It is also critical that lawmakers hear from the residents effected by this.  First hand experience and impacts matter.  Find your representative.

Read more about the issue here.