Falmouth official urges refundable Title 5 septic tax credit to help coastal homeowners

A town official from Falmouth urged the Joint Committee on Revenue to change the state’s Title 5 septic tax credit to a refundable credit so lower- and middle-income homeowners can afford septic-system upgrades required under new state regulations.

Jonathan Kaufman, speaking for the Town of Falmouth’s Water Quality Management Committee and the Select Board, testified in support of House Bill 4082. Kaufman told the committee that in 2023 the Massachusetts Department of Environmental Protection identified 30 coastal water bodies and associated watersheds on Cape Cod and the islands as nitrogen-sensitive, and that restoring those coastal waters will require watershed management plans and upgrades by thousands of homeowners.

“Homeowners will bear costs that will likely range from $30,000 to $60,000 or more as they make the necessary improvements to comply with the new regulations,” Kaufman said. He said Falmouth alone estimates more than 10,000 homeowners will be affected.

Kaufman explained the Commonwealth currently offers a nonrefundable Title 5 septic tax credit, which is capped at $18,000, but that many low- and middle-income households receive little or no benefit because the credit cannot exceed tax liability. House Bill 4082 would make that credit refundable so eligible homeowners could claim part of eligible expenses regardless of how much they owe in state taxes.

Kaufman said making the credit refundable would provide “much-needed financial support to the most vulnerable homeowners such as fixed-income seniors and young families just starting out,” and would help promote the restoration of at-risk coastal waterways.

No formal committee votes or motions on House Bill 4082 were recorded in the provided transcript segment. Committee staff invited additional written testimony through the legislature’s submission channels.