Suozzi Asks IRS to Reconsider Ruling on Septic System Grants

US Rep. Tom Suozzi, D-Huntington, is asking the Internal Revenue Service to reconsider its ruling that Suffolk County residents must pay taxes on county grants used to improve or replace their septic systems. 

Suffolk County residents are eligible for grants  to defray the costs of upgrading cesspools and septic systems to more efficient units that produce less nitrogen. The county launched the program two years ago as a way of encouraging homeowners to make the switch. And since July, homeowners looking to replace cesspools have had to switch to better systems, not simply swap a broken cesspool with a new one.

County Comptroller John Kennedy, who ran an unsuccessful campaign against County Executive Steve Bellone, asked for an IRS ruling, saying he believed that the grants were taxable.

On Jan. 15 the IRS ruled that the grants are taxable, Newsday reported Monday.

“For years, Long Island has experienced a decline in water quality in part due to nitrogen runoff. Cesspools and septic systems have been identified as the largest single cause of degraded water quality contributing to beach closures, restrictions on shellfishing, toxic algae blooms, and massive fish kills,”  Suozzi said in a letter to IRS Commissioner Charles P. Rettig.

“I will work on solutions to help protect our environment and groundwater without putting any additional onus on Suffolk County homeowners who are already struggling with the recent cap on their state and local tax deductions.”

As part of its Reclaim Our Waters program, the county said the average cost to homeowners was $19,200, and says that homeowners are eligible for grants up to $30,000. 

Nitrogen pollution from septic tanks has been identified as the single largest contributor to deteriorating groundwater quality, leading to a decline in the environment. 

“This unfortunate decision is an attempt to create new tax liability for local homeowners who voluntarily participate in a critical water quality program, but we aren’t going to let that happen. We are prepared to challenge this ruling if necessary and look forward to working with Congressman Suozzi and our Congressional delegation to make sure homeowners are protected,” said Suffolk County Executive Steve Bellone.

 

 

 

 

 

 

sent a letter to the Commissioner of the Internal Revenue Service (IRS), Charles P. Rettig, asking him to reconsider a recent ruling that Suffolk County residents must pay taxes on county grants used to upgrade their septic tanks. The full letter can be found attached and copied below.

 

“For years, Long Island has experienced a decline in water quality in part due to nitrogen runoff. Cesspools and septic systems have been identified as the largest single cause of degraded water quality contributing to beach closures, restrictions on shellfishing, toxic algae blooms, and massive fish kills,” said Suozzi. “I will work on solutions to help protect our environment and groundwater without putting any additional onus on Suffolk County homeowners who are already struggling with the recent cap on their state and local tax deductions (SALT).”

 

As a member of the House Ways and Means Committee, the chief tax-writing committee in Congress, Suozzi will review legislative options to try and support 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.

 

“This unfortunate decision is an attempt to create new tax liability for local homeowners who voluntarily participate in a critical water quality program, but we aren’t going to let that happen. We are prepared to challenge this ruling if necessary and look forward to working with Congressman Suozzi and our congressional delegation to make sure homeowners are protected,” said Suffolk County Executive Steve Bellone.

 

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.

 

 

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