Water Conservation Rebate Tax Parity Act

This bill excludes from gross income (for federal tax purposes) certain subsidies for the purchase or installation of measures to conserve water or manage stormwater or wastewater. Under current law, subsidies received from public utilities for the purchase or installation of measures to reduce electricity or natural gas consumption or improve the management of energy demand in a dwelling are not included in gross income and, therefore, not subject to federal income tax. Under the bill, the exclusion from gross income for such subsidies is expanded to include subsidies provided (directly or indirectly) after 2021 by a public utility to a customer or by a state or local government to a resident for the purchase or installation of measures that evaluate water use, reduce water consumption, or improve water management in one or more dwelling units; by a stormwater management company to a customer or by a state or local government to a resident for the purchase or installation of measures to reduce or manage stormwater, including measures to improve or reduce the impact of flooding caused by stormwater, for one or more dwelling units; or by a state or local government to a resident for the purchase or installation of measures that manage wastewater, including septic tanks and cesspools, with respect to a principal residence.