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$222 in Tax Relief

April 03, 2014 J

This past week Gov. Dave Heineman signed into law $412 million in tax relief over the next five years.  AFP-Nebraska applauds the many activists across the state who stood with us to work with the Governor and the Legislature to ensure meaningful tax relief was a part of the 2014 legislative session.

Because of your work Nebraskans will pay over $400 million less in taxes.  That equates into $222 in tax relief every man, woman and child who resides in the Cornhusker state!

While AFP-Nebraska had worked for even greater progress on tax relief, $412 million represents a significant amount of money.  Yet, we can – and must – do better.  Recently a national publication ranked Nebraska the 3rd worst state for taxpayers.  We ranked right behind New York and California and that is certainly not the type of company we want to be in!

The report included state and local tax burden figures and Nebraskans pay $9,450 on average.  Our tax burden is $662 greater than the average Iowans, $1,755 more than the average Kansan, and $5,684 more than a neighbor in South Dakota.  No wonder so many Nebraskans talk about leaving to avoid our high tax rate!

We believe the tax relief package passed by the Legislature and signed into law by Gov. Heineman is a good first step.  But it’s not enough to make Nebraska truly competitive for economic development, business investment and significant job growth.  We must do more.  That is why AFP-Nebraska will continue to fight for reduced government spending and greater tax relief.

For more specific information on the tax relief package signed into law by Gov. Heineman please read the following from the Governor’s Office:

Bills signed into law that affect tax relief include:

LB 987 will index Nebraska’s individual income tax brackets for inflation, as well as exempt portions of social security and veteran retirement. Specifically, the bill will exempt social security income for taxpayers with an adjusted gross income of $58,000 or less for married persons filing jointly, and $43,000 or less for all others. This bill also allows a veteran to make a one-time election, within two years after separation from military service, to exclude portions of military retirement benefits. The exclusion may be to either exclude 40 percent of the military retirement benefit income for seven consecutive years or to exclude 15 percent of the military retirement benefit for all taxable years after the person turns 67.

LB 96 eliminates sales tax on the sale, lease, rental or storage of repair or replacement parts for agricultural machinery and equipment that are used in commercial agriculture.

LB 905 increases the Property Tax Credit Program by $25 million on an annual basis, in addition to the current $115 million ongoing funding. In 2007, the Governor worked with the Legislature to create the Property Tax Credit Program to offer property tax relief in Nebraska. The amount contributed has stayed flat over the last few years while statewide property values have increased.

LB 986 will expand Nebraska’s homestead exemption program so that more Nebraskans could qualify. This bill increases amounts of household income limits. For a 100 percent exemption from property tax, single filers can earn up to $26,900. As household income increases up to a maximum of $39,500, the exemption percentage is phased-down incrementally. For a 100 percent exemption, married filers can earn up to $31,600. As household income increases up to a maximum of $46,900, this exemption percentage is phased-down incrementally. This bill also creates a new eligibility category under the homestead exemption program to include certain individuals with developmental disabilities.

LB 1087 will expand eligibility for the current property tax homestead exemption to include a 100 percent property tax exemption for honorably discharged veterans. To qualify, veterans must be drawing compensation for a 100 percent service-connected disability from the U.S. Department of Veterans Affairs, beginning in 2015. This bill also gives a 100 percent exemption to unremarried widows or widowers of honorably discharged veterans who died as a result of a service-connected disability, as well as to unremarried widows or widowers of servicemen and servicewomen whose death on active duty was service connected.

LB 867 will exempt sales and use taxes on purchases made by historic automobile museums, and would exempt sales and use tax on the sale, lease or rental of gold or silver bullion and U.S. postage charges. The bill would exempt non-profit corporations that make charitable donations of land from the documentary stamp tax and accelerate the sports arena sales tax turnback payments to the Ralston arena. It would also exempt retail sales of compressed natural gas that is used for motor vehicle fuel.

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