“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.
- LB59 (Stinner) SUPPORT – Amends the Nebraska Tourism Commission’s powers to allow the Commission to engage directly with retailers to sell tourism promotional products. It further provides that retailers who pay in full for merchandise have no further reporting requirements to the Commission. The bill also harmonizes a section of the statute governing the handling of sales revenue received by the Commission and a section of statute describing the Commission’s powers.
- LB258 (Vargas) (M. Hansen Priority) OPPOSE – Requires employers with four or more employees to provide access to paid sick and safe leave.
- LB290 (M.Cavanaugh) OPPOSE – Adopts the Paid Family & Medical Leave Insurance Act to create a paid family and medical leave insurance program to provide partial wage replacement for eligible workers to care for themselves or family members.
- LB432 (Revenue Committee Priority Bill) – MONITOR – Income tax shell bill.
- AM774 Would amend the following bills into the bill:
- LB680 (Linehan) Beginning 2022, the corporate income tax rate for taxable income above $100,000 would reduce from 7.81% to 6.84%. The new rate matches the top individual income tax rate.
- LB564 (McDonnell) Adds apprenticeship programs to the definition of qualified higher education expense in the Nebraska Educational Savings Plan Trust (NEST).
- AM1110 (J. Cavanaugh) Placeholder amendment.
- LR11CA (Erdman Priority Resolution) MONITOR – A resolution for a constitutional amendment and consumption tax. Changes the way taxes are collected, replaces the income tax, the sales tax, the property tax, and the inheritance tax with a consumption tax, directs the Legislature to enact a consumption tax.
Held In Committee
- LB52 (Lathrop) MONITOR – Provides immunity from injury or death resulting from COVID-19 exposure.
- LB79 (Briese) MONITOR – Change the minimum amount of relief provided under the Property Tax Credit Act.
- LB122 (Hunt) OPPOSE – Eliminates the tipped minimum wage of $2.13 plus tips. Tipped workers would be paid the state minimum wage of $9.00 an hour.
- LB133 (Erdman) MONITOR – Adopts a consumption tax.
- LB139 (Briese) (Slama Priority) SUPPORT – Adopts the COVID-19 Liability Protection Act.
- LB422 (Briese) MONITOR – Reduces sales tax rate from 5.5% to 5% and eliminates some sales tax exemptions.