The Water Conservation Rebate Tax Parity Act would expand current tax law to allow homeowners to exclude certain water-related rebates and subsidies from their taxable income, bringing water conservation on par with existing energy conservation incentives. The bill applies to rebates and subsidies provided by public utilities, state and local governments, or storm water management providers to residential customers for installing water conservation measures, storm water management systems, or wastewater management improvements at their primary residences. The legislation defines these measures to include water efficiency upgrades, installations that prevent storm water flooding, and systems to manage wastewater like septic tanks. The tax benefits would apply retroactively to amounts received after December 31, 2021, and the bill includes a provision clarifying that this change does not affect how water conservation subsidies received before 2022 were previously taxed. This change would reduce the tax burden on homeowners who invest in water conservation and environmental improvements to their homes.