Water and Agriculture Tax Reform Act of 2023

This bill modifies tax rules for mutual ditch irrigation companies (organizations that manage water systems for farms). It allows these companies to exclude income from water sales, leases, or related transactions from taxable income, promoting water conservation and efficiency. However, if such income is used for non-operational expenses (like building new water infrastructure outside their system), it becomes taxable. The change applies to tax years after the bill's enactment, directly affecting agricultural water management organizations.