This is the week the big tax debate really gets underway in the Revenue Committee.
On Wednesday, the committee considered Senator McCollister’s LB 276, which would repeal the Sub-S/LLC exemption for out-of-state income. This would be an invitation for Nebraska employers to exit the state. Also on the agenda is Senator Bolz’s LB 182, a measure to allow school districts to impose (with voter approval) a local income tax of up to 20 percent of state income tax liability.
Thursday, the pace continues with two bills (Senator Briese’s LB 314 and Senator Friesen’s LB 497) that would broaden the sales tax base to cover more goods and services, impose income tax surcharges, repeal income tax provisions such as the special capital gains exclusion and the Sub-S/LLC out-of-state income exclusion, and increase other taxes such as those on alcohol and tobacco. The new revenue would be used for school funding and property tax relief. How close to home would this hit? The per-gallon tax on beer would increase by $1.07. The tax on wine would increase by $2.56. The liquor tax would go up by $8.53!
Tax policy has also been discussed in the Education Committee. Various bills are aimed at providing more state funding for schools and using that to lower property taxes. One proposal (Senator Groene’s LB 695) would provide “foundation aid” to each school district and fund that with 25 percent of all state sales and income-tax revenue. That funding provision certainly drew the Chamber’s attention (and opposition).
This will continue in the weeks to come.
There has been some floor debate on the tax issue. On Tuesday, senators debated a measure offered by Senator Briese that would lower the value of agricultural land to 30 percent of market for the purpose of property taxes for school bond payments. The effect would be to shift more of the burden of the bond levy to city dwellers. There was a fair amount of resistance to this, and further debate was put off until some of the broader tax proposals make their way through the committee process.
Very big thanks goes out to all of the Chamber members who have make the trek to testify in committee hearings, including those from Lozier, Lutz, Omaha Steaks, Cassling Medical Imaging, Tenaska, and American National Bank, as well as all of those who have contacted senators on various proposals.
Refer to the Public Policy page on the Greater Omaha Chamber’s website or contact Jennifer Creager or Tim Stuart at 402.474.4960 if you have questions.
Also, click here if you are interested in reading the Legislature’s Update of the happenings in Lincoln.