Senator Albrecht Shares Update on Tax Cut Package Advancing

WAYNE – District 17 Senator Joni Albrecht is hoping that the changes made on tax cuts in the Unicameral will go on to advance out of Select File for all of Nebraskans to benefit.

According to the weekly release from Senator Albrecht, the tax cut package advanced following three rounds of revenue discussion.

Corporate, state income, property and social security tax cuts have all passed to select file. The Legislature gave first-round approval on March 30 to a proposal that would cut individual and corporate income tax rates, speed up the phaseout of state taxation of Social Security income and provide credits intended to offset the amount of property taxes paid to community colleges.

After eight hours of first-round debate, Senator Curt Friesen filed a motion to invoke cloture, which ended debate and forced a vote on the bill and any pending amendments. The motion succeeded on a vote of 43-0. Thirty-three votes were needed. Senators then voted 44-0 to advance LB873 to Select File.

The provisions of LB939, introduced by Senator Lou Ann Linehan of Elkhorn, would cut Nebraska’s top individual income tax rate in several steps from the current 6.84 percent to 5.84 percent by tax year 2027. Linehan’s proposal also would continue the phased-in reduction of the state’s top corporate income tax rate, which applies to income in excess of $100,000, approved by the Legislature last year. The committee amendment would cut the rate from the current 7.5 percent to 5.84 percent by 2027.

Also included are the provisions of LB723, introduced by Albion Senator Tom Briese. The proposal is intended to ensure that a refundable state income tax credit does not fall below its current amount of $548 million. The credit, created in 2020 under the Nebraska Property Tax Incentive Act, is based on property taxes paid to schools.

Under the amendment, the credit amount would increase to $560.7 million for tax year 2023 and then increase by an allowable growth percentage of up to five percent beginning in tax year 2024. The amendment also would create a refundable tax credit under the Nebraska Property Tax Incentive Act based on the amount of property taxes paid to a community college. The total amount of credits this year would be $50 million. It then would increase annually, reaching $195 million during taxable years that begin during calendar year 2026. After that, the total would increase by the allowable growth percentage.

Finally, the amendment included the provisions of LB825, introduced by Senator Brett Lindstrom of Omaha. His proposal would exempt Social Security income from state income taxation by tax year 2025. Lindstrom said the proposal would benefit Nebraska retirees who live on a fixed income and are hard hit by inflation. Nebraska is one of relatively few states that taxes Social Security income and has high income and property taxes relative to its neighbors, making it less competitive when trying to attract and retain businesses, workers and retirees.

Norfolk Senator Michael Flood also supported the proposal, saying corporations consider a state’s top corporate tax rate when deciding whether to expand or locate there. He said Nebraska’s rate is not competitive.

Other information being highlighted by Senator Albrecht included the budget adjustment package gaining final approval on March 29; the American Rescue Plan Act (ARPA) information and how it works; interstate and state highway construction in northeast Nebraska; a Broadband grant program advancing to general file on March 28 as well as severe weather preparedness.

Senator Albrecht Weekly Update continued.

If you have any comments or concerns, contact District 17 Senator Joni Albrecht at 402-471-2716 or email jalbrecht@leg.ne.gov.

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