Rep. Scholten Introduces Local Infrastructure Tax Cuts Act to Bring Targeted Tax Relief to West Michigan

WASHINGTON, DC - U.S. Representative Hillary Scholten (D-MI-03), alongside Representatives Haley Stevens (D-MI-11) and Debbie Dingell (D-MI-06), introduced the Local Infrastructure Tax Cuts Actto deliver targeted tax relief to Michiganders and strengthen the ability of communities to invest in critical local infrastructure.

"Families shouldn't have to worry about their taxes skyrocketing just because their community needs safer roads, reliable water lines, or upgraded sewer systems," said Rep. Scholten. "Local infrastructure improvements benefit everyone, but too often the cost falls hardest on working- and middle-class homeowners. The Local Infrastructure Tax Cuts Actwill provide real relief by allowing eligible taxpayers to deduct these special costs, keeping household budgets stable while communities make critical upgrades. I'm proud to partner with my Michigan colleagues to stand up for families and prove that investing in infrastructure can go hand in hand with lowering costs."

Across Michigan, townships rely on Special Assessment Districts (SADs) to fund urgent projects like repairing aging roads, replacing water and sewer lines, upgrading stormwater systems, and restoring dams. These costs (often $5,000 or more per household) are directly levied on homeowners. Under current federal law, these locally imposed special assessment taxes are not deductible, leaving hardworking families to shoulder the costs. This bill closes this gap by allowing eligible low- and middle-income homeowners to deduct qualified special assessment taxes paid on their primary residence for projects such as transportation, public safety facilities, schools, water, and sewer systems.

"Michigan families are paying too much out of pocket to fix their roads, upgrade their water systems, or restore critical infrastructure in their communities," said Rep. Stevens. "When homeowners are required to pay thousands of dollars for essential public infrastructure improvements, the federal tax code should provide relief - not make life more expensive. This bill delivers commonsense tax relief while helping our communities build and modernize the infrastructure they depend on."

"Special Assessment Districts (SADs) allow our local communities to make necessary and targeted infrastructure improvements, but too often the costs fall directly on homeowners who can least afford them," said Rep. Dingell. "Homeowners in Michigan and across the country are feeling financial stress from skyrocketing costs of living - we must ensure important local projects don't also become an undue burden. This bill provides meaningful relief with tax deductions and will help families manage rising costs while ensuring communities can continue to invest in critical infrastructure."

Specifically, the bill:

• Creates a new tax deduction for homeowners who have to pay a special assessment on their primary home imposed by a state or local government.
• Limits eligibility for this deduction to taxpayers with income below $107,500 (for single filers), $161,250 (for head of household filers), and $215,000 (for joint filers).
• Caps the deduction at $10,000 (or $5,000 married individuals filing separately) per year.
• Limits eligibility for the deduction to the following types of projects: transportation; schools; hospitals; police, fire, and emergency facilities; water, sewer, stormwater, telecom, electric, gas, and utility infrastructure; and dam restoration projects. Projects must be publicly owned or operated by a not-for-profit, member-owned utility.

The bill is endorsed by the Michigan Townships Association, the National Association of Towns and Townships, and townships across Michigan.

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