Suozzi Seeks to Make Suffolk Resident’s ‘Septic System’ Grants Tax-Exempt

Washington, DC – Today, Congressman Tom Suozzi (D-Long Island, Queens) announced that he will be introducing legislation to reverse a ruling made earlier this year by the Internal Revenue Service, that Suffolk County residents must pay taxes on county grants used to upgrade their septic tanks. The legislation is expected to be included within a larger House Infrastructure package which will be voted on within the next few weeks.

“Cesspools and septic systems have been identified as the largest single cause of degraded water quality On Long Island,” said Suozzi. “This bill may not sound exciting, but it has a real impact on real people’s lives and pocketbooks. It will reverse the IRS’s wrongheaded decision, as well as help protect our environment, groundwater, and our bays and harbors without putting any additional onus on homeowners.”

“The notion that Suffolk County homeowners would be taxed for participating in a water quality program that will make their water cleaner simply defies all logic,” said Suffolk County Executive Steve Bellone. “We launched the most ambitious septic improvement program in the State to make it affordable for homeowners to replace their outdated septic systems and cesspools to help solve the water quality crisis. I want to thank Congressman Suozzi for introducing this commonsense legislation that would prevent the IRS from taxing homeowners who want to do their part to help protect our environment.”

Specifically, Suozzi’s bill would:

  • Exclude gross income any subsidy “provided (directly or indirectly) by a State or local government to a resident of such a State or locality for the purchase or installation of any waste management measure, but only if such measure is with respect to the taxpayer’s principal residence.
  • Define the Wastewater Management Measure as “any installation or modification of property primarily designed to manage wastewater (including septic tanks and cesspools) with respect to one or more dwelling units.”
  • Retroactivity allow subsidy recipients to amend their 2019 tax returns for grants received in 2019

Earlier this year, the IRS ruled that Suffolk County residents must pay taxes on county grants used to upgrade their septic tanks. Soon after, Suozzi sent a letter to the IRS commission Charles Rettig, asking him to reconsider. As a member of the House Ways and Means Committee, the chief tax-writing committee in Congress, Suozzi is uniquely positioned to provide a legislative fix to save this program, which was initiated in 2017 under Suffolk County Executive Steve Bellone and is an integral part of efforts to reduce nitrogen pollution in waterways.

Under this specific program, Suffolk County residents were eligible for grants between $10,000-$20,000 to defray the costs of upgrading aging cesspools and septic systems to more efficient modern units that produce less nitrogen.

On Long Island, nitrogen pollution from septic tanks has been identified as the single largest contributor to deteriorating groundwater quality. This has resulted in a degradation of Long Island’s local environment, drinking water, and the surrounding ecosystem. Incentivizing homeowners to upgrade their septic tanks will help to preserve our environment for years to come and will give residents the drinking water they deserve.

Even before he was elected to Congress, Suozzi has fought to improve water quality and clean up Long Island’s environment for future generations. As a Member of Congress, he has increased funding to protect the Long Island Sound by more than 500% in just three years and has secured tens of millions of dollars to finally clean up the Navy-Grumman Plume.

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