Legislation introduced in the House last week would exempt water efficiency rebates from federal taxation. Sponsored by Reps. Dana Rohrabacher (R-Calif.) and Jared Huffman (D-Calif.), the “Water Rebate Tax Parity Act” (H.R. 4615) would clarify that water efficiency rebates offered to customers by utilities are not to be considered taxable income by the IRS. Currently, utility customers who receive more than $600 worth of rebates in a single year could owe federal taxes on the balance, as some homeowners in California found out last year.
In a statement, Rep. Huffman said the bill “makes certain that homeowners have every resource available to install water-saving technologies, and aren’t taxed for reducing their water footprint.”