“Unicam, Unicam, don’t tax me!”
“Tax that guy behind the tree!”
Last Tuesday, the Legislature approved ten bills on Final Reading. They comprise the State’s $9.7 billion-ish biennial budget. With not so much as a “hurrah or harrumph,” the bills were whisked to the Governor’s desk.
We will know tomorrow which spending initiatives Gov. Ricketts rejects with a swipe of his pen. Thirty of forty-nine senators must cast aye votes to override each veto.
Spending bills will not stop with the final passage of the budget. A cool $200 million is set aside for new spending and/or tax cuts. The three significant bills below will receive great debate:
- LB64 (Lindstrom) Phases out Social Security income tax by 20% per year over five years.
- Thirty-seven states do not tax social security income.
- Eleven states reduce Social Security taxes depending on age or income level.
- Only Nebraska and Connecticut fully tax Social Security benefits.
- Income tax revenue reduction FY21/22 – $39M. By FY26/27 – $139M.
- LB26 (Wayne) Exempts residential water service from sales or use tax.
- Sales tax revenue reduction this biennium – $13M.
- The exemption also impacts municipalities and rural water districts.
- LB432 (Revenue Committee) Contains parts or provisions of the following bills.
- LB347 (Lindstrom) Clarifies Nebraska’s foreign dividend income tax deduction.
- LB564 (McDonnell) Adds apprenticeship programs to higher education expenses in the Nebraska educational savings plan trust (NEST).
- LB680 (Linehan) Cuts the top corporate income tax rate from 7.81% to 6.84% to match the top individual income tax rate, creating parity among all legal form businesses.
- LB597 (Albrecht) A $2,000 refundable tax credit for the parent of a stillborn child.
- LB299 (McDonnell) Create the Firefighter Cancer Benefits Act.
- Annual income tax revenue reduction upon full implementation – $187M.
Approved by the Governor
- LB177 (Lindstrom) SUPPORT – Increases the time for the perfection of Fertilizer and Agricultural Chemical Liens, and increases the time for the perfection of Seed Lien or Electrical Power/Energy Liens from the current sixty (60) days to one hundred twenty (120) days after the last delivery of goods or services covered by these respective liens.
- LB507 (Bostelman) (Natural Resources Priority) SUPPORT
- AM256 (Hughes) Adds antelope and elk to depredation season. Also redefines elector for any irrigation district which borders another state, comprises less than 2,000 acres and one-half or more landowners, etc., are not Nebraska residents.
- AM365 (Hughes) One-time fund transfer from the Water Sustainability Fund to the Department of Natural Resources.
- AM567 (J. Cavanaugh) The use of seed that is treated, as defined in section 81-2,147.01, in the production of agricultural ethyl alcohol shall be prohibited if such use results in the generation of a byproduct that is deemed unsafe for livestock consumption or land application.
- AM859 (Hughes) Provides that the bill, as amended, becomes law upon the Governor’s signature.
- LB644 (B. Hansen Priority) MONITOR – Property Tax Request Act to increase transparency for impacted political subdivisions that raise their property tax levies.
- AM755 (Halloran) Better defines political subdivision, public meeting criteria, property tax requests, and public notification. ADOPTED
- AM854 (Halloran) When property tax valuation, as determined by a county assessor, is deemed excessive, the overpayment amount shall be returned to the taxpayer. The unpaid balance shall accrue nine percent interest. Political subdivisions can no longer claim hardship to delay repayment of funds. ADOPTED
- Five dilatory amendments pending.
- LB84 (Bostelman) (Speaker Priority) MONITOR – Changes provisions relating to tax incentive performance audits and redefines a term under the ImagiNE Nebraska Act
- LB90 (Halloran) MONITOR – Amends the Nebraska Pesticide Act by reallocating the pesticide registration fee distribution. It further amends the Nebraska Commercial Fertilizer and Soil Conditioner Act by allowing the Director to adjust the inspection fee each July 1.
- LB91 (Brandt) MONITOR – Expands the date after germination or viability testing that native flower and grass seeds may continue to be sold or offered for sale without retesting and allowing seed viability testing instead of germination rate testing for certain seeds.
- AM96 Defines native and nonnative plant species, seed germination, storage, testing, viability, and sales.
- LB290 (M. Cavanaugh) OPPOSE – Adopts the Paid Family & Medical Leave Insurance Act.
- LB432 (Revenue Committee Priority) – MONITOR – Income tax shell bill.
- AM774 The following bills on our tracking sheet are amended into LB432:
- LB564 (McDonnell) Adds apprenticeship programs to the definition of qualified higher education expense in the Nebraska Educational Savings Plan Trust (NEST)
- LB597 (Albrecht) Provides a $2,000 income tax credit to a parent of a stillborn child.
- LB347 (Lindstrom) Amended version: Dividends deemed to be received include income included in federal income under section 951A of the Internal Revenue Code net of the deduction in section 250(a)(1)(B) of the code.
- LB680 (Linehan) Beginning 1/1/2022, the income tax rate would be reduced to 5.58% on the first $100,000 of taxable income and 6.84% on all taxable income over $100,000.
- AM1110 (J. Cavanaugh) Placeholder amendment.
- LR11CA (Erdman Priority Resolution) MONITOR – Resolution for a constitutional amendment for a consumption tax. LR11CA changes the way taxes are collected and replaces the income tax, the sales tax, the property tax, and the inheritance tax with a consumption tax and directs the Legislature to enact a consumption tax.
Held In Committee
- LB52 (Lathrop) MONITOR – Immunity for injury or death resulting from COVID-19 exposure.
- LB79 (Briese) MONITOR – Changes the minimum amount of relief provided under the Property Tax Credit Act.
- LB133 (Erdman) MONITOR – Adopts a consumption tax and eliminates other taxes.
- LB139 (Briese) (Slama Priority) MONITOR – Provides general safe harbor and premises liability protections on potential COVID-19 lawsuits.
- LB329 (Wayne) MONITOR – The minimum average wholesale gasoline price would be $2.44.
- AM411 The amendment provides employers with tax incentives for hiring felons, including those on parole or probation.
- LB422 (Briese) MONITOR – Reduce state sales tax from 5.5 cents to 5 cents and eliminate some sales tax exemptions.
- LB430 (Revenue) MONITOR – Property tax shell bill.
- LB433 (Revenue) MONITOR – Sales tax shell bill.
- LB483 (J Cavanaugh) MONITOR – Creates a $250,000 climate change study and plan.
- LB543 (Brandt) SUPPORT – Agricultural Equipment Right-To-Repair-Act.
- AM284 – Compreshesive rewrite including definitions of documentation, fair and reasonable terms, software, etc.
- LB622 (Friesen) MONITOR – Limits real property valuations’ growth and provides adjustments to assessed values.
- LB634 (J. Cavanaugh) OPPOSE – Provides a cause of action for unsafe disposal of treated seed. The bill is no longer in play due to the passage of Sen. Cavanaugh’s AM567 to LB507.
- LB672 (Murman) SUPPORT – Changes the sales and use tax exemption on agricultural machinery and equipment.
- LR5 (Gragert) MONITOR – Recommendations from the Healthy Soils Task Force delivered to the Legislature.
- LB239 (Hilkemann) MONITOR – Restricts phone use to hands-free only while driving.
- LB625 (Vargas) MONITOR – Imposes a surtax on certain taxable income and uses the tax proceeds for early childhood education