June 10, 2021
(Washington, DC) – U.S. Senators Jeanne Shaheen (D-NH) and Lisa Murkowski (R-AK) reintroduced their bipartisan invoice to repair a measure within the 2017 tax invoice that led to taxes on crucial water infrastructure investments in New Hampshire, Alaska and throughout the nation. The invoice would amend the therapy of Contributions in support of Building (CIAC) underneath Part 118 of the Inner Income Code to scale back the burden on taxpayers and encourage water and wastewater utilities to spend money on water infrastructure initiatives and group growth. Senator Maggie Hassan (D-NH) additionally cosponsored the invoice.
Earlier than the Trump administration handed the Tax Cuts and Jobs Act of 2017 (TCJA), water and wastewater utilities have been exempted from the CIAC tax. However the TCJA reinstated this tax, forcing these prices to be lined by both state and native governments or ratepayers and property taxpayers. These adjustments have already resulted in at the very least $1.15 million in new federal taxes for water infrastructure initiatives in Southern New Hampshire, lowering the probability of investments in water infrastructure and group growth.
“Investing in water infrastructure means investing in public well being, job creation and financial growth. These crucial investments should be made with out sticking native communities with an sudden invoice,” mentioned Shaheen. “That’s why I’m proud to steer this bipartisan, common sense effort with Senator Murkowski to concurrently spend money on infrastructure jobs and guarantee households have entry to scrub ingesting water. I’ll maintain working within the Senate to guard taxpayers and meaningfully spend money on New Hampshire’s infrastructure.”
“Water and sewer utilities in Alaska have burdened the significance of tax exemption for contributions in support of building for the growth, enchancment, or alternative of the amenities Alaskans depend on. Traditionally, these contributions have been tax exempt, however after we handed the Tax Cuts and Jobs Act in 2017, a provision disqualified the tax exemption. Absent a repair, water utilities haven’t any alternative however to cross the invoice on to charge payers,” mentioned Murkowski. “This correction to the legislation will assist carry aid to Alaskans who’re struggling to pay the excessive prices of primary water and sewer providers.”
“Consuming water contamination points are a rising concern for a lot of residential effectively homeowners. This tax creates a barrier for water utilities from serving to to supply connections to scrub water. We’re happy on the prospect of eradicating this disincentive in order that public cash may be directed to enhancing our citizen’s well being slightly than going again to Washington,” mentioned Bob Scott, Commissioner of the New Hampshire Division of Environmental Companies.
“An unlucky results of the Tax Cuts and Jobs Act of 2017 (TCJA) because it pertains to Prices in Help of Building (CIAC) is that privately owned water utilities at the moment are topic to taxes associated to infrastructure being offered as CIAC. This can be a burden to the Southern NH Regional Water Mission and is continuous to trigger extra burden to develop infrastructure. It’s encouraging that Senator Shaheen and Senator Murkowski have continued their effort to reintroduce a invoice to reinstate the exemption for the tax,” mentioned Charlie Lanza, Basic Supervisor of the Hampstead Space Water Firm.
The U.S. tax code has lengthy offered favorable tax therapy for what are often known as Contributions in Help of Building (CIAC), in addition to for sure grants made by governmental or civic entities, to assist corporations and communities make investments in initiatives that profit the general public. Since 1996, the U.S. tax code has included a particular provision that excludes these contributions made to water and sewer utilities from their taxable earnings. Sadly, the TCJA eradicated this tax exemption. The TCJA additionally made a further change that eradicated the tax-free therapy of capital contributions if made by governmental entities or civic teams. These adjustments may impression the Consuming Water and Groundwater Belief Fund in New Hampshire, in addition to municipal governments that make investments in water or different infrastructure. Particularly, Shaheen and Murkowski’s invoice would reverse these two dangerous adjustments to the U.S. tax code and revert these particular provisions to pre-TCJA standing.
Full textual content of the laws may be discovered right here.
The Shaheen-Murkowski laws is endorsed by a variety of state and nationwide building and environmental organizations, together with the Granite State Rural Water Affiliation, Worldwide Council of Buying Facilities, Nationwide Affiliation of Dwelling Builders, Merrimack Residents for Clear Water, Nationwide Affiliation of Regulatory Utility Commissioners, Nationwide Affiliation of Water Corporations, Rural Group Help Partnership, Testing for Pease, Pennichuck Company and Hampstead Water Firm.