Flowers grow next to a nitrogen-reducing sewer system on property on Midway Road. (Photo credit: Courtesy photo)
Congressman Lee Zeldin (R-Shirley), an original co-sponsor of a bill to try to prevent the Internal Revenue Service from taxing grants for installing nitrogen-reducing sewer systems as income, is fighting back to try reverse the IRS ruling.
When Suffolk County Comptroller John Kennedy Jr. (D: Nesconset) tried unsuccessfully to defeat County Executive Steve Bellone (D-Babylon) in 2019, he ruled that the grants paid by the county and a number of communities should be paid on taxes the scholarship.
Initially, taxpayers and contractors who installed the new systems received tax bills for the same money, but contractors struggled and let the homeowners pay the bill.
Mr Bellone, Assistant District Manager Peter Scully, and others resisted, arguing that the grants were an incentive to encourage people to tackle projects, which generally cost around $ 20,000 to $ 25,000. The facilities would help reduce pollution of the waterways by lowering the nitrogen levels in the old septic tanks in an attempt to keep the drinking water viable for residents.
Mr Bellone won the election, but despite the fact that taxpayers had signed forms stating that they could be taxed on the grant money, they were constantly assured that the decision would be reversed – until they received 1,099 forms showing the income indicated for the money they had received from both the county and the parishes if they received grants from both.
“Saddling Long Islanders with an unexpected tax season bill is unacceptable,” Zeldin said. “We need to stop shooting from the hip when it comes to your hard-earned tax dollars … All levels of government need to work to find a solution and we need to examine all possible ways to address this pressing problem. “
The bill, which he re-signed this year, would exclude from gross income money received in 2020 from state, regional and local governments to install nitrogen-reducing I / A (innovative / alternative) wastewater treatment plants. This would also allow for a review of 2019 returns for the grants received that year.
“We need to make sure that people can actually use the program to get the results they want,” said Zeldin, describing the intent of the grants as “commendable” to improve and protect water supplies.
Mr Zeldin urged all levels of government to look for ways to reverse taxation, saying it has become an urgent need.
Suffolk County’s grant program was initiated in 2017, with East End towns quickly following by using Community Preservation Funds to pay for the grants. The Congressman has continued to work with the IRS and Suffolk County to broker a solution for Long Island taxpayers.
While Mr. Zeldin and others struggle to reverse the IRS tax ruling, Mr. Bellone works to create a nationwide water district that could provide grants with no tax consequences. The effort started last year and is very much alive.
The Suffolk County Department of Health has created an “Underwater Catchment Drainage Plan” that removes reliance on legacy sewer systems that produce water that is not always potable and pollutes the ground and surface water that all elected East End officials are trying to protect.
Mr Bellone has said the timeline is expected to make a difference in many of the worst areas within about 10 years, while full implementation would likely take 50 years.
“For the first time there is a long-term plan to reduce nitrogen pollution and put Suffolk County on a path to cleaner, healthier water resources,” said Dr. James Tomarken, Commissioner for the Suffolk County Department of Health. “The continued reliance on primitive sanitation systems is a growing threat to our environment and our economy.” The New York State Department of Environmental Conservation provided funding to develop the plan.
The estimated cost would be $ 2.7 billion over 50 years, replacing 253,000 cesspools and wastewater treatment plants with I / A systems and connecting other properties to sewers.
Instead of giving grants to individuals, a water usage fee would be paid for the effort.
Assistant District Manager Scully has embraced the concept, saying it could potentially create high-paying jobs as well.
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