Quite a Week

The Legislature is adjourned until Wednesday when they reconvene to address bills vetoed by the Governor (if there are any) and take a position on LR134, a resolution outlining the criteria to be used by the Legislature during the 2021 redistricting process. Thursday, the 107th Legislature, First Session will adjourn sine die.

With only four days last week to move legislation to the Governor’s desk, bills were flying and dying like mallards fleeing Desoto National Wildlife Refuge.

Despite considerable whining, complaining, and filibustering, most bills of any significance advanced from Final Reading to Governor Ricketts’ desk. Those remaining on Final Reading, Select File, General File, and held by a committee, carry over to 2022.

When politicians talk about tax relief as their top priority, most of us push the mute button. But not this year! Without a doubt, this Legislature delivered the most meaningful tax cuts that Nebraskans have seen in a very long time.

  • Property Tax Relief Fund – The fund increased by $574 million bring total property tax relief for the next biennium (7/1/21 to 6/30/23) to over $1.45 billion.
  • Nebraska Property Tax Incentive Act – Provides $626 million in the upcoming biennium for refundable income tax credits to individuals, corporations, fiduciaries, and financial institutions that pay property taxes to their school districts.
  • Sales Tax – LB26: Eliminates sales tax on residential water use in October 2022.
  • Social Security Benefits – LB64: Cuts state income tax on social security benefits by: 5% in 2021 / 20% in 2022 / 30% in 2023 / 40% in 2024 / 50% in 2025. The Legislature intends to cut an additional 10% each year until reaching zero tax on Social Security benefits in 2030.
  • Military Retirement Benefits – LB387: Eliminates income tax on military retirement benefits beginning January 1, 2022. Nebraska becomes the 32nd state not to tax these benefits.
  • Corporate Tax Rate – LB432:
  • 2022 – Cut to 5.58% for the first $100K of taxable income. Above $100K remains 7.75%.
  • 2023 – Remains 5.58% for the first $100K and 7.25% above $100K.
  • 2024 – Intends to cut the taxable rate above $100K to 7%.
  • 2025 – Intends to cut the taxable rate above $100K to 6.84%, matching Nebraska’s highest tax rate for personal income.

Bill Tracker

Presented to the Governor

  • LB139 (Briese) (Slama Priority) SUPPORT – Adopts the COVID-19 Liability Protection Act.
  • LB432 (Revenue Committee Priority Bill) – MONITOR – Income tax shell bill.
  • AM774 Would amend the following bills into the bill:
  • LB680 (Linehan) Cuts the corporate tax rate beginning 2022 from 7.5% to 5.58% on the first $100K of taxable income and remains 7.75% over $100K. In 2023 the first $100K tax rate will be 5.58% and 7.25% over $100K. Intent language would then cut the taxable rate over $100K to 7% in 2024 and 6.84% in 2025.
  • LB564 (McDonnell) Adds apprenticeship programs to the definition of qualified higher education expense in the Nebraska Educational Savings Plan Trust (NEST).

General File

  • 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.
  • 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.

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.
  • LB422 (Briese) MONITOR – Reduces sales tax rate from 5.5% to 5% and eliminates some sales tax exemptions.

Failed to Advance

  • LB258 (Vargas) (M. Hansen Priority) OPPOSE – Requires employers with four or more employees to provide access to paid sick and safe leave. FAILED TO ADVANCE.
  • 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.