Water Conservation Rebate Tax Parity Act

This bill aims to expand the existing income exclusion for certain conservation subsidies under the Internal Revenue Code of 1986, extending benefits currently available for energy conservation to water-related efforts. It proposes to exclude from taxable income subsidies provided for the purchase or installation of water conservation or efficiency measures , storm water management measures , and wastewater management measures . These subsidies can be offered by public utilities, storm water management providers, or state and local governments to their customers or residents, with the wastewater exclusion applying only to a taxpayer's principal residence. The legislation defines these new terms, clarifying that a water conservation or efficiency measure reduces water consumption, a storm water management measure manages storm water, and a wastewater management measure manages wastewater, including septic systems. The bill also makes conforming amendments to the Internal Revenue Code's section heading and definitions. These amendments would apply to amounts received after December 31, 2021, ensuring that rebates for these conservation efforts are not treated as taxable income.