Schumer Says USDA Can Halt Taxation Of Septic Improvement Grants - 27 East

Residence

Residence / 1985207

Schumer Says USDA Can Halt Taxation Of Septic Improvement Grants

icon 1 Photo
From left, East Islip homeowner and Septic Improvement Program participant Louis Castronova, Citizens Campaign for the Environment Executive Director Adrienne Esposito, Suffolk County Executive Steve Bellone, U.S. Senator Charles Schumer, Nature Conservancy policy advisor Kevin McDonald, and Islip Town Supervisor Angie Carpenter during a press conference to announce a new plan to end the taxation of septic improvement grants.

From left, East Islip homeowner and Septic Improvement Program participant Louis Castronova, Citizens Campaign for the Environment Executive Director Adrienne Esposito, Suffolk County Executive Steve Bellone, U.S. Senator Charles Schumer, Nature Conservancy policy advisor Kevin McDonald, and Islip Town Supervisor Angie Carpenter during a press conference to announce a new plan to end the taxation of septic improvement grants.

Brendan J. O’Reilly on Jun 29, 2022

U.S. Senator Charles Schumer is asking the U.S. Department of Agriculture to stop the IRS from subjecting homeowners to income tax on septic improvement grants.

From the lawn of an East Islip home on Monday, Schumer said he is sending a letter to Secretary of Agriculture Tom Vilsack to ask the USDA to use its authority to determine that grants that are primarily designed to conserve water and soil resources can’t be considered taxable income.

“If the USDA simply sends a letter to the IRS to do that, there won’t be any taxes,” Schumer said.

The Suffolk County Septic Improvement Program and similar initiatives in Southampton and East Hampton towns award grants to replace cesspools and conventional septic systems with innovative/alternative septic systems that use the latest nitrogen-reduction technology to curtail the flow of nutrient pollution into Long Island’s waterways.

The grant monies are distributed directly to the installers, rather than the homeowners themselves, to avoid triggering an income tax liability for the homeowners. However, after Suffolk County Comptroller John Kennedy asked for an IRS determination, the federal tax collection agency ruled in 2020 that both the homeowners and the installers are responsible to pay taxes on the grants.

“The IRS recently decided to consider voluntary septic tank upgrades as personal income,” Schumer said. “They never used to do that.”

Some homeowners on the South Fork were left with unexpected tax bills for thousands of dollars, which discouraged other residents from participating. Local and federal lawmakers asked the IRS to reconsider, and federal legislation was floated to reverse the decision. None of the previous efforts were successful.

“Right now, with so much confusion under the threat of big bills from the IRS, people aren’t gonna do this,” Schumer said. “They’re gonna say, ‘Don’t hook me up because I’ll have to pay taxes.’”

He called it “ridiculous” that homeowners who are participating in a program to clean up water would be subject to taxes.

“The grant program is a regional benefit,” he said. “It helps the whole community.”

He also noted that the contractors who install the I/A systems also pay taxes on the value of the grants. “So the feds aren’t out a dime the way I see it,” he added.

Schumer said he and others who have been working on this issue previously thought they had a breakthrough with the IRS. “We thought they had said OK, but then all of a sudden, they reversed themselves for reasons unknown,” he said. “So we’re gonna pull a rabbit out of a hat. We have a new way to go around the IRS. It’s called the U.S. Department of Agriculture.”

He said he wrote a letter to the USDA that lays out how the department has the right to determine that soil and water conservation grants be excluded from taxable income. The letter also states that Suffolk County first engaged the USDA in 2021 to seek a determination.

As soon as the USDA were to make the determination and write to the IRS, according to Schumer, “all our problems would be over and we could continue to proceed with this great program.”

“This program doesn’t work if you don’t have homeowners who are willing to sign on and participate,” said Suffolk County Executive Steve Bellone, who joined Schumer at the announcement. He called the Septic Improvement Program “absolutely critical” to protect Long Island’s water and ensure a prosperous future.

Adrienne Esposito, the executive director of Citizens Campaign for the Environment, said taxes on the grants put them out of reach for working-class people.

“Red tide, green tide, brown tide, mahogany tide, rust tide, blue-green algae are really destroying our maritime culture and our way of life here on Long Island, ” Esposito said. “This program was specifically crafted to help working-class Long Islanders participate in the program. It was intended to be good for our wallets, good for the environment, and good for the sustainability of our island. The IRS thwarted that program and hindered our progress, and that must change.”

Louis Castronova, the owner of the home where the press conference was held, said his story began when his cesspool collapsed at 3 a.m., with a 2-year-old and newborn in the house. He said an internet search led him to the Septic Improvement Program, and he filled out the short application.

“It was something to help a middle-class family that was really in dire need of something in a time of an emergency,” Castronova said. But he added that a couple of months later, in tax season, he found out he owed between $4,000 and $5,000 in taxes.

Bellone said 3,200 families have participated in Suffolk County’s program, and he echoed Castronova’s remarks that the best advocates for the program are the families who have participated in it. “The problem is that this tax burden, which is inexplicable, is hurting the ability of people like Louis to go out and promote the benefits of this program,” he said.

You May Also Like:

Hampton Designer Showhouse Kicks Off July 19

The Hampton Designer Showhouse will return to Southampton this summer to benefit Stony Brook Southampton ... 1 Jul 2025 by Staff Writer

Holiday House Hamptons Opens With White Party on July 12

Holiday House Hamptons will return to the South Fork on Saturday, July 12, for its ... by Staff Writer

East Hampton Art & Design Days Runs July 11-13

The inaugural East Hampton Art & Design Days, running July 11 to 13, will present a lecture series at Guild Hall on Sunday, July 13, featuring interior designers and landscape designers in conversation. The day will begin with a book-signing hour, followed at noon by Aerin Lauder in conversation with David Netto about her new book, “Living With Flowers,” which explores the role of florals in “interior design, inspired living, and timeless style.” “Designing Iconic Interiors and Architecture” begins at 1:15 p.m., with panelists Brian Sawyer, David Kleinberg and Victoria Hagan moderated by Jacqueline Terrebonne of Galerie. The designers will ... by Staff Writer

Marders Hosting Garden Talks Series Covering Range of Garden-Related Topics

Marders, a nursery and garden center in Bridgehampton, is hosting the Garden Talks series, covering a variety of topics relating to garden maintenance and caring for plants. These talks take place on Sunday mornings at Marders at 120 Snake Hollow Road in Bridgehampton, from 10 a.m. to 11 a.m. and are free to attend. Paige Patterson, a plant ambassador at Marders, has been running talks for over 10 years. The talks grew out of Patterson receiving questions relating to misconceptions about plants, as well as other aspects of gardening that she was unaware of when she first started. “I never ... by Dan Stark

East Hampton Historical Society To Host 19th Annual Antiques & Design Show Benefit

The East Hampton Historical Society is hosting its 19th annual Antiques & Design Show Benefit ... 30 Jun 2025 by Dan Stark

Fireflies Are Back for Summer — or Are They?

Like Fourth of July fireworks, cooling swims and relaxing vacations, fireflies are a sign of ... 26 Jun 2025 by Melissa Morgan Nelson

Gourds Are a Great Growing Project for Curious Kids — and Adults

It’s not too late to plant a few seeds that can be a great project ... by Andrew Messinger

David Harber and Michael Derrig Present 'A Celebration of Art in the Garden'

The David Harber studio in Oxfordshire, England, is bringing its outdoor sculptures to East Hampton ... 24 Jun 2025 by Brendan J. O’Reilly

Salvatore Piazzolla and Grant Wilfley Find Comfort in Southampton

Salvatore Piazzolla and Grant Wilfley found solitude when stumbling upon what inevitably was their dream ... 20 Jun 2025 by Tristan Dyer

Free Tuesday Webinar on 'Case Studies of East End Near-Zero and Net-Zero Residential Properties

Jean-Pierre Clejan, a renewable energy integrator specializing in zero-energy building, will host a free, live webinar, “Case Studies of East End Near-Zero & Net-Zero Residential Projects,” on Tuesday, June 24, at 4 p.m. The two-hour sustainability-focused continuing education unit program, with PDH, AIA HSW and GBCI/LEED credits available, showcases the ways architects have achieved net-zero and near-zero energy for their Long Island clients by incorporating energy efficiency, specifying hyper-efficient electric HVAC and optimizing roof/site plans to maximize solar production. In each case study, Clejan will review the embedded technology, key design elements, and real-world energy/financial performance of the built project. ... 18 Jun 2025 by Staff Writer