Understanding the Revised Property Tax Cuts and Opportunities Act
Taylor Gage, 402-471-1970
Luke Robson, 402-471-1967
“Thank you to Chairman Smith and the Revenue Committee for their significant investment of time and work to move the Property Tax Cuts and Opportunities Act (LB 947) forward. High property taxes are hurting farm families and homeowners across our state, and the Legislature needs to take action this session. I look forward to working with pro-growth Senators to deliver this major property tax relief for the people of Nebraska.”
– Governor Pete Ricketts
TAX REFORM THAT PUTS WORKING NEBRASKANS FIRST
>>> Governor Ricketts has been working with pro-growth Senators to get major property tax relief done this year.
- The Revenue Committee advanced LB 947 on March 20, 2018.
- The changes outlined below are reflected in the amendment to LB 947 adopted by the Revenue Committee.
>>> The Nebraska Property Tax Cuts and Opportunities Act will deliver $2.3 billion in property tax relief over the next 10 years for Nebraska’s ag producers and homeowners.
- Major New Property Tax Relief:
- Creates a new agricultural land tax credit and a new homeowner tax credit for property taxes paid commencing for tax year 2018.
- The ag land and homeowner credits start at 2 percent and 1 percent respectively of property taxes paid in 2018 and grow until reaching 20 percent.
- These tax credits are refundable tax credits.
- There is no cap on the amount of tax credits received on ag land and improvements.
- The proposal caps the homeowner credit to direct the relief towards average homeowners. When fully implemented, the maximum relief will be $500 for each homeowner.
- Protects Existing Property Tax Relief:
- Retains the existing Property Tax Credit Relief Fund at $224 million per year.
- Retains the existing Personal Property Tax exemption.
>>> The Nebraska Property Tax Cuts and Opportunities Act builds a better tax climate for job creation and commits new, dedicated resources to workforce development.
- Income Tax Relief
- Scaled Down: Income tax reforms are dramatically scaled down in this amendment, making up less than 10 percent of the relief.
- Rate Parity: Business income tax top rate is reduced over 5 years to a rate of 6.84 percent to match the top individual income tax rate.
- Workforce Development
- Long-Term Commitment: Creates a dedicated source of workforce development funding of $5 million each year starting in 2018.
- Economic Development: Funding is directed to the Job Training Cash Fund at the Department of Economic Development.
NEBRASKANS NEED THE PROPERTY TAX CUTS & OPPORTUNITIES ACT THIS YEAR
>>> Nebraska’s tax laws are hurting hardworking Nebraska families and ag producers, and consequently hindering the ability of the state to grow in the future.
- Nebraska’s property tax rates are uncompetitive nationally. The Tax Foundation ranks Nebraska’s property taxes as 11th highest in the nation. More here.
- When you look at Nebraska’s taxes another way on a per capita basis, we do just as poorly. Local property tax collections rank 12th highest at $1,757 per capita. More here.
- The U.S. Department of Agriculture projected farm income to decline in 2018. Steep declines the last few years have left Nebraska’s ag producers struggling to pay high tax bills. More here.
>>> Nebraska’s business tax climate is uncompetitive regionally and it’s only getting worse.
- Nebraska has the highest business income tax rate of any regional state except Iowa and the 23rd highest rate in the nation. More here.
- State tax laws are a significant factor considered by businesses and site selectors when determining where to create jobs and make investments.
- This reform is important to making Nebraska a more attractive place for site selectors who screen for tax rates when locating new projects.
>>> With a low unemployment rate, Nebraska’s job creators rank workforce development as their top priority as they seek to create more opportunities for hardworking families.
- Right now, the state has no job training funds in the state’s traditional programs.
- Nebraska’s job creators consistently identify workforce development as a top priority. Workforce quality and availability of labor topped the Nebraska State Chamber’s annual member survey in 2017. More here.
- Nebraska has one of the lowest unemployment rates in the nation at 2.7 percent, which has forced the state to seek creative solutions to talent recruitment and workforce development.