Every state in the continental U.S. has at least one local “rain tax,” but there is no statewide rain tax by state — these stormwater fees are almost always set by cities and counties, not state legislatures, so whether you pay one depends on your municipality rather than your state. A 2025 national survey counted more than 2,100 stormwater utilities across the 48 continental states, and the charges appear on water bills, sewer bills, or property tax statements under names like stormwater management fee, stormwater utility fee, or storm drainage charge.
Why It’s Called a Rain Tax
The nickname traces back to Maryland. In 2013, the state passed a law requiring its ten largest jurisdictions to impose stormwater management fees, with the revenue earmarked for reducing pollution flowing into the Chesapeake Bay. The political reaction was immediate. Frederick County adopted a fee of one cent per year in protest. Carroll County refused to comply at all. By 2015, the legislature scrapped the mandate but left each jurisdiction free to keep its fee. Baltimore and several others did.
Critics of similar charges elsewhere picked up the “rain tax” label, and it stuck, even though the underlying idea — charging property owners based on how much runoff their land generates — dates back to the 1970s and has spread steadily as federal water quality rules have tightened.
Which States Have the Most Stormwater Fees
Stormwater utilities exist in all 48 continental states, but the count per state varies enormously. A few states have only one or two. Others have well over a hundred. Minnesota alone has more than 200. Concentration tends to be highest where urban populations are large, water quality concerns are significant, or federal stormwater permits are aggressively enforced. States with particularly high numbers of active stormwater utilities include Maryland, Virginia, Florida, Georgia, Pennsylvania, Tennessee, and those in the Pacific Northwest.
By the time the EPA last published a national count, more than 800 communities had adopted stormwater utilities. Western Kentucky University’s ongoing national survey — the most comprehensive tracking effort available — has since put the number past 2,100. There is no single federal database listing every local rate, which is why the answer to “does my state have a rain tax” almost always comes down to checking with your city or county.
Why Your City Charges One
The Clean Water Act prohibits discharging pollutants into U.S. waterways without a permit. Runoff from streets, rooftops, and parking lots picks up oil, fertilizer, and trash on its way to storm drains and eventually rivers, lakes, and coastal waters. Under the EPA’s National Pollutant Discharge Elimination System, cities and counties operating municipal separate storm sewer systems need permits for those discharges.
Those permits require real programs: public education, illicit discharge detection, construction site runoff control, post-construction stormwater management, and pollution prevention for municipal operations. All of that costs money for staff, monitoring, drainage infrastructure, and maintenance. A stormwater utility fee creates a dedicated revenue stream that can only be spent on stormwater work, separate from the general fund. That dedicated structure is what distinguishes a stormwater fee from a general tax.
How the Fee Is Calculated
Most stormwater fees are based on impervious surface — the total area of rooftops, driveways, patios, and other surfaces that block rain from soaking into the ground. More impervious surface means more runoff, which means a higher fee. About 80 percent of stormwater utilities nationwide use a measurement called an Equivalent Residential Unit, or ERU, as their billing basis.
An ERU represents the average impervious area on a typical single-family home in that community, calculated by dividing total residential impervious area by the number of residential parcels. The number varies by community but commonly falls between 2,000 and 3,500 square feet. A single-family home pays one ERU. Commercial properties, apartment complexes, and institutional buildings pay based on how many ERUs their impervious surface equals. A big-box store with a large parking lot might owe dozens.
Not every municipality uses ERUs. Some charge every single-family home a flat residential fee regardless of size and calculate commercial properties separately. Others use tiered brackets based on ranges of impervious area. A few measure each property individually and bill on the exact figure. Billing also varies: some add the fee to monthly water or sewer bills, others include the annual charge on property tax statements.
What Homeowners Typically Pay
Residential stormwater fees for a typical single-family home generally fall somewhere between $3 and $15 per month, though some communities charge less and others considerably more. Older cities with combined sewer systems and significant infrastructure needs tend to sit at the higher end. Newer suburbs with modern drainage sometimes charge less.
The variation makes a single national average meaningless. Your actual fee depends on your community’s rate, how it measures your property, and whether you qualify for any credits or exemptions. For commercial properties with large impervious footprints, the annual bill can run into the thousands.
How to Find Out If You’re Paying One
Because stormwater fees are set locally, the fastest way to check is your most recent water or sewer bill. Look for a line item labeled “stormwater,” “storm drainage,” or something similar. If your community bills through property taxes instead, the charge will appear as a separate line on the tax statement.
For rate details, credit programs, exemptions, and appeals, your city or county public works department website is usually the best source. Many municipalities publish online maps showing the impervious area measurement assigned to each parcel. If you’re buying property in a new area, ask about stormwater fees during due diligence. They are easy to overlook but can add a few hundred dollars a year for a home and much more for commercial property.
Credits That Can Lower Your Bill
Many stormwater utilities offer credits that reduce your fee if you manage runoff on your own property. Common qualifying measures include rain gardens, permeable pavement, green roofs, rain barrels, and detention or retention basins. If you capture or absorb rain before it reaches the public storm drain system, you reduce the burden on municipal infrastructure and pay less.
Credit amounts vary widely. Some municipalities offer reductions of 10 to 40 percent of the fee. Others go higher, and a handful allow up to 100 percent credit for properties that retain all stormwater on-site. Residential credits tend to be simpler, sometimes requiring only a rain garden or infiltration system. Commercial credits often involve engineered solutions and formal documentation. Programs typically require an application, a description of what you have installed, and sometimes an inspection.
Exemptions
Certain properties are commonly exempt. Actively farmed agricultural and horticultural land often qualifies for a full or partial exemption, on the theory that farmland absorbs rain rather than generating runoff. Undeveloped land with no impervious surfaces may be exempt or charged a minimal amount. Some jurisdictions reduce or waive fees for churches, nonprofits, or government-owned property, though this varies and has been politically contested.
If your fee is based on an inaccurate impervious surface measurement — a demolished shed still on the aerial imagery, a driveway replaced with permeable pavers — most utilities have a formal appeal process handled administratively.
Fee or Tax
Whether a stormwater charge is legally a fee or a tax matters. Taxes usually require voter approval or specific legislative authorization; fees for services generally do not. The Michigan Supreme Court struck down Lansing’s stormwater charge as an unauthorized tax in Bolt v. City of Lansing in 1998, finding that property owners had no meaningful choice about whether to “use” the stormwater system because rain falls regardless.1Justia Law. Bolt v. City of Lansing, 459 Mich. 152 (1998) Other state courts have generally upheld stormwater charges as valid fees when the rate reflects actual impervious surface area and the revenue stays within the stormwater program. The practical result is that communities design fee structures to tie charges closely to measurable runoff impact rather than using flat rates that look more like a tax.
One more point worth knowing: for most homeowners, stormwater fees are not deductible on federal income taxes. The IRS treats them as a nondeductible service charge in the same category as water, sewer, and trash collection.2Internal Revenue Service. Topic No. 503, Deductible Taxes Fees paid on business property are generally deductible as an ordinary business expense.