Governor signs tax relief bills into law

By: Jenn Hatcher

Wednesday, Governor Dave Heineman announced that Nebraska taxpayers will receive more
than $412 million in tax relief over the next five years. He signed several tax
relief bills into law at a news conference where he noted the relief as
responsible, meaningful and significant.

“I am pleased that Nebraska taxpayers will be receiving
more than $412 million in tax relief, which is responsible, meaningful and
significant tax relief,” said Governor. Heineman. 

Governor Heineman has
clearly stated that the priority for this legislative session was providing
responsible and meaningful tax relief. In his State of the State address, Governor.
Heineman demonstrated how Nebraska could accomplish tax relief between $370 and
$500 million citing state financial reports holding the line on state spending,
utilizing a portion of the record high state cash reserve fund, and citing
Nebraska's growing economy.

signed into law that affect tax relief include:

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.

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.

On March 29, Governor. Heineman signed LB 905 into law.

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


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


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.

Additionally, Governor. Heineman outlined an additional bill
that just reached his desk Monday that he plans to sign.

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.