Water and Sewer Exemption Restored in Senate Bipartisan Infrastructure Bill
The Senate bipartisan infrastructure bill includes a provision sought by NAHB to restore an exemption for water and sewer contributions in aid of construction (CIAC). If enacted into law, this would be effective for contributions made after Dec. 31, 2020.
As part of the Tax Cuts and Jobs Act enacted in 2018, Congress eliminated an exemption for water and sewer CIAC, making such contributions taxable if the utility is a privately-owned, for-profit entity.
As a result, in areas served by a corporate, for-profit water utility, when a builder installs new water or sewer infrastructure to support additional housing — at no cost to the existing residents — that infrastructure is taxed by the federal government. In some states, affected utilities were required to pass this tax liability to the developer, resulting in CIAC surcharges as high as 40%.
NAHB has been working with a bipartisan group of senators to restore the water and sewer exemption. In June, Sens. Jeanne Shaheen (D-N.H.) and Lisa Murkowski (R-Alaska) introduced legislation (S. 1997) to do so. This bill formed the basis for the restoration of the exemption in the bipartisan infrastructure bill, and NAHB is grateful for their leadership on this issue.
The Senate is working to pass this bill in the coming days, but House action will likely be delayed until the fall.
Latest from NAHBNow
Economics
May 05, 2026
New Home Sales Rise, Supported by Limited Existing InventorySales of newly built single-family homes rose 7.4% in March, to a seasonally adjusted annual rate of 682,000, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 3.3% from a year earlier.
Economics
May 05, 2026
NAHB Debuts New Resource That Estimates Quarterly Remodeling Spending by StateNAHB is debuting a new resource called the State Projections of Remodeling (SPR) that will provide a quarterly analysis of remodeling activity for each state in the nation based on total dollar volume, market share and change in remodeling spending.
Latest Economic News
Economics
May 04, 2026
Mortgage Rates Climb as Inflation Rebounds and Yields RiseMortgage rates continued to increase in April as ceasefire negotiations remain inconclusive. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.34% in April, 16 basis points (bps) higher than March. The average 15-year rate also increased by 13 bps to 5.69%. Despite the recent increase, both rates remain lower than a year ago by 39 bps and 21 bps, respectively.
Economics
May 01, 2026
Student Housing Construction Investment Holds Steady in the First Quarter of 2026Private fixed investment in student dormitories edged up 0.1% in the first quarter of 2026, holding at a seasonally adjusted annual rate (SAAR) of $3.9 billion. This modest gain marked a third consecutive quarterly increase, despite continued pressures from elevated interest rates. However, on a year-over-year basis, investments in dorms remained almost unchanged.
Economics
Apr 30, 2026
Housing’s Share of GDP Dips Below 16% for First Time Since 2019Housing’s share of the economy was 15.9% in the first quarter of 2026, according to the latest estimates of GDP produced by the Bureau of Economic Analysis. This share is down from 16.0% in the fourth quarter and is lower than 16.5% registered just one year ago.