Tax Reform for Water Companies: Encouraging Conservation and Efficiency.
This law changes tax rules for mutual ditch and irrigation companies, allowing them to earn income from leasing or selling water rights and related assets without jeopardizing their tax-exempt status. The goal is to encourage these organizations to manage water more efficiently and invest in conservation efforts. This indirectly supports agricultural stability and better resource management.
Key points
Irrigation companies can now sell or lease water rights and related property without that income counting against limits for tax-exempt organizations.
This income must generally be used for operations, maintenance, or capital improvements to maintain the tax benefit.
The law also clarifies that certain modern voting structures based on share ownership will not disqualify these companies from tax-exempt status.
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