WASHINGTON – U.S. Senators John Hickenlooper, John Curtis, and Alex Padilla reintroduced their bipartisan Water Conservation Rebate Tax Parity Act to help make it more affordable for homeowners to conserve water by exempting homeowners from taxes on rebates for water conservation and efficiency upgrades.
“Droughts don’t just disappear. We need to make the most of every drop,” said Hickenlooper. “Homeowners need to conserve their water to make us more drought resilient.”
“Due to Utah’s dry climate, water conservation is essential to preserving our way of life. While households and communities have made significant strides in improving water efficiency, the federal tax code has yet to catch up in supporting these investments,” said Curtis. “By removing taxes on rebates for water-saving home upgrades, our bill rewards Utahns for adopting sustainable practices that benefit both our environment and economy.”
“For Californians, conserving water is a way of life — and we know the importance of staying prepared for the next major drought,” said Padilla. “Saving water means saving money on your water bills, which is why water utilities throughout the state offer rebates for more efficient water fixtures or drought-tolerant landscaping. We should incentivize homeowners to invest in technologies that reduce their water consumption, not penalize them with additional federal income taxes.”
Water utilities around the country often offer rebates and incentives to homeowners who make investments to decrease their water use, reduce stormwater runoff, and ease the strain on public infrastructure. Homeowners who take advantage of these water conservation programs are charged taxes on their rebates, unlike those who take up energy efficiency incentives from their utilities.
The Water Conservation Rebate Tax Parity Act would make sure water utilities rebates are treated like energy conservation rebates and not taxed as income.
“The Water Conservation Rebate Tax Parity Act is a commonsense bill that will remove an unintended barrier to water conservation actions. Water conservation rebates are being treated as income. This taxable status creates a disincentive to customers in taking advantage of local programs and creates a burden for water providers to implement rebates. This bill will encourage greater participation in conservation and will reduce demands on our Nation’s water and energy sources,” said Marshall Brown, General Manager of Aurora Water.
“Water is one of our most precious resources, and conservation efforts should be encouraged, not penalized. By ensuring that water conservation rebates receive the same tax treatment as energy efficiency incentives, the Water Conservation Rebate Tax Parity Act removes an unnecessary barrier for homeowners and businesses looking to invest in water sustainability. We applaud Senator Hickenlooper for cosponsoring this important legislation and for supporting smart policies that help our communities reduce water usage, strengthen resilience, and keep utility costs affordable,” said Abigail Ortega, General Manager of Infrastructure & Resources Planning of Colorado Springs Utilities.
Companion legislation was introduced in the House of Representatives.
Full text of the bill is available HERE.
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