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Nebraska Farm Bureau Supports Property Tax Relief Efforts

LB388 is a key piece of a broader tax reform package working its way through the Nebraska Legislature that would provide the most significant property tax relief in history.

The major components of LB388 include:

  • Creation of the Property Tax Growth Limitation Act.
  • Removal of certain sales tax exemptions on pop, candy, lottery tickets, small animal veterinary care and other pet services, moving and storage services, dry cleaning, games of skill, hemp and CBD products, vaping products, cigarettes, and advertising services offered by business with gross revenues of more than $1 billion.
  • Possibly increasing the state’s sales tax rate by one cent to 6.5 cents. However, if annual state revenues exceed certain thresholds, the rate increase will be less, and possibly zero.
  • Removal of sales taxes on electricity, propane, and natural gas delivered to residential property.
    • Places cap on property tax revenue growth for political subdivisions where the baseline would be previous year’s collection plus 3% or CPI whichever is greater.
      • Subdivisions would be allowed to carry forward a maximum of 5% of unused tax authority. Caps can be overridden by a vote of the people at a regularly scheduled election (primary or general) for bond approval, emergency response, and public safety.
  • Estimated revenue generated from these changes is $650 million.

It is crucial to ensure that any increase in sales tax revenue resulting from the tax package is exclusively allocated towards property tax relief. Our objective is not to escalate the overall tax burden on the state.

The same principle applies to enhanced state support for schools, which we highly encourage. However, if additional funds are allocated to schools, we must avoid a repeat of the events that occurred last year.

Implementing a reasonable cap on the growth of local property taxes while preserving local control is a commendable step that is long overdue.

Regardless of the method for delivering relief, the state must maintain the requirement that each year schools must report how they use additional state funds for spending and/or property tax reductions.

Additionally, we strongly urge the legislature to establish safeguards to ensure that the progress made does not diminish over time.

Let’s work together to ensure that Nebraska property owners receive the meaningful property tax relief they need and deserve. Your input is crucial before the Legislature continues debate on LB388. Act now! Contact your senator and urge them to support LB388.

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