Documentary stamp tax increase passed over on final reading
Consideration of a proposal to fund additional programs and services with a tax increase on real estate transactions ended on the final round of debate April 18 after senators passed over it without taking a vote.
Currently, counties collect a documentary stamp tax at a rate of $2.25 for each $1,000 in value on the transfer of real estate. Counties remit all but 50 cents of each $2.25 collected to the state treasurer, who credits the proceeds to funds related to affordable housing, site development, homeless shelter assistance and behavioral health services.
LB1363, sponsored by Sen. Mike McDonnell of Omaha, would raise the rate to $3.25 for each $1,000 in value and direct the proceeds to several additional uses, including military-related programs, federally qualified health centers and the establishment and operation of an office to pursue and coordinate grant funding on behalf of the state.
The bill contains provisions of LB1067, introduced by Elmwood Sen. Robert Clements, that would cut the inheritance tax rate that applies to remote relatives from 11% to 8% and the rate that applies to all other beneficiaries from 15% to 8%.
LB1363 would allow counties to retain $1.15 of each $3.25 in documentary stamp tax collected to offset lost inheritance tax revenue.
The Legislative Fiscal Analyst estimates that the bill would increase documentary stamp tax collections by $12.4 million in fiscal year 2024-25 and $17.6 million in FY2025-26.
Sen. Robert Dover of Norfolk opposed LB1363 and filed a motion to return it to select file and strike the enacting clause. He said the bill would increase the price of a home at a time when Nebraska is focused on making housing more affordable.
At McDonnell’s request, Speaker John Arch of La Vista passed over the bill. The Legislature moved to the next item on the agenda without voting on LB1363, ending debate on it this session.