The Legislature's Revenue Committee listened to over nine hours of testimony Wed., Feb. 6, on LB 405, the Governor's major tax reform bill. Introduced by Sens. McCoy and Ashford of Omaha, the bill would repeal the state’s individual and corporate income taxes and replace the revenue by removing sales tax exemptions.Exemptions slated for removal in the bill include the purchases of agricultural machinery and equipment, seed, fertilizer, chemicals, semen and artificial insemination services, energy used for agriculture and water used in irrigation. The removal of the exemptions is estimated to cost farmers and ranchers $280 million in new sales taxes.
Steve Nelson, Nebraska Farm Bureau Federation (NFBF) president, testified in opposition to the bill arguing that it would place Nebraska farmers and ranchers at a disadvantage to other states, would increase taxes on farmers and ranchers by roughly $217 million and would lead to double taxation.
The Revenue Committee heard testimony on the second bill of the Governor’s tax reform plan on Thurs., Feb. 7. LB 406 would repeal corporate income tax, exempt certain amounts of retirement income and make up the difference by repealing sales tax exemptions. Exemptions on purchases of agricultural inputs would make up over 50 percent of the revenue raised by removing sales tax exemptions on chemicals, seeds, fertilizer and energy used in agriculture. Myles Ramsey, Farm Bureau Board Member from Kenesaw, Neb., testified in opposition to the measure on behalf of NFBF. The Committee has not taken any action on these measures.