SCOTTSBLUFF, Neb. – It appears that Nebraska Gov. Pete Ricketts’ property tax proposal hasn’t gained much support since its debut. He presented a brief preview during his State of the State fly-in stop at Scottsbluff on Wednesday, Jan. 10, where about 50 people listened to his plans for 2018.
Ricketts said the legislation carrying the proposed tax relief was introduced that day in Lincoln. The Nebraska Property Tax Cuts and Opportunity Act, introduced by Sen. Jim Smith, is touted as being able to deliver more than $4 billion in property tax relief over 10 years for the state’s ag producers and families.
According to Ricketts, the bill restructures existing property tax credits to prioritize middle-income Nebraska homeowners and ag producers. A new refundable tax credit will ensure that Nebraskans receive the property tax relief provided by the state. It will now be delivered as a credit on state taxes, to ensure Nebraska property taxpayers receive the relief. Out-of-state landowners won’t receive the tax credit unless they file their income taxes as
For farmers and ranchers, the plan provides a tax credit on agricultural land, farm sites, and improvements equal to 10 percent of property taxes paid with no cap on the amount of relief. When state revenues reach certain benchmarks, triggers are in place to increase the amount of credits. The cap on the residential credit will increase as the credits increase. Currently, 14 percent of property tax credits on agricultural land are received by non-Nebraska residents.
Family and small businesses should experience relief when existing tax credits are used to lower the top individual income tax rate from 6.84 percent to 6.69 percent. According to the Nebraska State Chamber of Commerce, 90 percent of the state’s businesses pay income tax through individual returns. Lowering the rate will help many of these businesses, and farmers organized as S Corporations, Nonfarm Sole Proprietorships, and Farm Sole
Currently, 6 percent of property tax credits on homes are received by non-Nebraska residents, and 14 percent of property tax credits on agricultural land are received by non-Nebraska residents.
In a press release, Nebraska Farm Bureau said that for residential homeowners, the plan targets relief at middle and low-income earners by capping the amount of property tax relief at $230 per residential homestead.
Steve Nelson, president of Nebraska Farm Bureau said earlier this week, “Property tax relief continues to be of the highest priority for the members of Nebraska Farm Bureau. We are encouraged by Governor Ricketts’ interest in placing greater emphasis on property taxes as part of his tax relief package and to see the property tax issue receive the attention it deserves. The governor’s ongoing efforts to bring interests to the table to find a solution are appreciated and we look forward to working with him and others to provide the tax relief being sought by Nebraskans.
“As I’ve said before, we believe the best way to address the property tax problem is through a legislative solution that delivers real and meaningful property tax relief. It’s our hope that common ground to deliver that relief can be found during the 2018 legislative session. We couldn’t agree more with Governor Ricketts that we need tax relief done this year. However, until such time, we will keep all options on the table for our members, including a ballot measure that would give Nebraskans the opportunity to vote and demonstrate their desire for property tax relief.”
Nebraska Farm Bureau later released this additional statement.
“In terms of impact to agriculture, we’re still reviewing the bill at this point for what it might specifically mean for farm/ranch families.
“In general, we appreciate the Governor talking more about wanting to provide property tax relief this session, as was reflected in President Nelson’s statement. The bill put forth by the Governor last year was much more heavily weighted to income tax relief vs property tax relief, which was a concern.”