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Last I knew, water tanks are not illegal in the US. There used to be a place in New Jersey where you couldn't collect rain water, but they got that but of law repealed.

Now, many homeowners associations have banned them. An HOA is like another form of government here in the US that dictates the policies of your neighborhood. There's a law going through the hoops right now that would block HOAs from doing certain things like banning rabbits, chickens, and gardens. As of now, almost every HOA blocks such things.