Pillen signs income tax reduction, property tax relief measures

Pillen signs income tax reduction, property tax relief measures
Sens. Lou Ann Linehan of Elkhorn and Tom Briese of Albion flank Gov. Jim Pillen as he holds up one of the two bills signed into law Wednesday (photo courtesy NPM)
May 31st, 2023 | Scott Miller

Governor Jim Pillen Wednesday signed two pieces of legislation that he says are historic in their scope and future impact on Nebraskans.

With a large group of state lawmakers and community college officials standing behind him at the Governor’s Hearing Room in Lincoln, Pillen put his signature on LB 754 and 243, saying the bills help address severe flaws in the state’s tax system that have made Nebraska less competitive with surrounding states.

He called the pair of measures truly transformational, saying “These bills provide billions, billions – I like to call it bushel baskets, and bushel baskets, and bushel baskets of property tax relief, business income tax relief, and personal income tax relief, for businesses, farmers, ranchers, and all Nebraskans.”

Provisions of LB754 include a reduction of top individual and business income tax rates to 3.99 percent by tax year 2027, acceleration of the tax exemption for Social Security benefits, and additional childcare tax credits, while LB243 increases the amount of relief granted under the Property Tax Credit Act and establishes a three percent annual cap on how much school districts can increase property tax requests, with some exceptions. The later provision also phases out property taxes for community colleges, which would be replaced with direct state funding.

Pillen noted LB754 is the largest income tax cut in the state’s history, and while it doesn’t place Nebraska in the top ten lowest income tax states, it will move Nebraska up in the rankings from below the median to the top 15.

Both bills contain emergency clauses, meaning they took effect immediately upon the Governor’s signature.

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