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Proposed Bill Would End Septic Upgrade Tax

Wed, 06/24/2020 - 18:23
Residents who install new, modern septic systems, similar to the one pictured above at the Springs School, may soon not have to pay tax on the grants after all.
Springs School

Under a new federal bill introduced by Representatives Lee Zeldin and Tom Suozzi, recipients of grants that subsidize residential septic system upgrades would no longer have to pay taxes on the grants, as was mandated by the I.R.S. in 2019. Additionally, those who paid taxes on those grants in 2019 would be allowed to retroactively amend their tax returns.

Since 2017, the county and multiple East End towns have been providing grants for homeowners to upgrade aging septic systems that are causing pollution, therefore improving water quality across the region.

"This program's goals are laudable, but we must ensure people can actually use the program to achieve those goals," Mr. Zeldin said in an announcement on Monday. "While all levels of government work to find a solution, due to the urgency of this situation, we are running the gamut on every option, including this legislation to provide immediate relief."

The legislation has been sent to the House Committee on Ways and Means for review.

On Tuesday, Suffolk County Executive Steve Bellone praised the measure, saying "it is absolutely outrageous that the I.R.S. would be taxing" people on the grants. "We should be doing everything we can to applaud these individuals who are pioneers in the program. These grants, quite frankly, shouldn't be taxable to anybody."

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