Alternative minimum tax repeal advanced

Senators advanced a bill to select file May 21 that would make changes to the computation of income taxes.

Senators originally discussed LB308, introduced by Columbus Sen. Paul Schumacher, on May 16. The bill would eliminate the federal alternative minimum tax (AMT) calculation for individual state income tax purposes for taxable years beginning Jan. 1, 2014.

In previous debate, Schumacher said the AMT originally was intended to apply only to the very wealthy, but in fact impacts many people making more than $75,000 annually.

“The alternative minimum tax calculation no longer serves its original purpose of targeting tax dodgers,” he said. “Instead, it targets the exact kind of hardworking, educated and productive people we want to attract to Nebraska.”

The proposed changes would apply to estates and trusts required to pay state income taxes. It also would eliminate the federal credit for prior year AMT for taxable years beginning in 2014.

When debate resumed, senators took up a pending motion to reconsider a vote on an amendment introduced by Omaha Sen. Ernie Chambers, which originally failed on a 23-16 vote. The amendment would have implemented provisions of LB266, a bill he originally introduced, that would repeal a 2012 law allowing municipalities to vote for an increase in local option sales taxes.

The motion to reconsider, introduced by Omaha Sen. Beau McCoy, failed on a 22-25 vote.

Omaha Sen. Bob Krist introduced an amendment that would have placed a moratorium on any new taxes or changes in current tax rates at the city level. He said now is not the time to make substantial changes to the state’s tax structure given the Legislature’s intent to conduct a tax study this interim.

“Our political subdivisions need to slow down and not incur additional responsibilities,” Krist said. “It’s prudent to slow down and let us look at the whole picture.”

The amendment failed on a 20-15 vote.

Omaha Sen. Burke Harr introduced, and later withdrew, an amendment that would have extended property tax financing to public-private partnerships.

The bill advanced on a 40-0 vote.