Revenue

iHub funding removed from documentary stamp tax proposal

A bill that would increase a tax paid by the seller of a house advanced to the final round of debate April 10 after lawmakers amended it to modify the distribution of the proceeds.

Sen. Mike McDonnell
Sen. Mike McDonnell

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.

As amended on general file, LB1363, sponsored by Omaha Sen. Mike McDonnell, would raise the rate to $3.25 for each $1,000 in value and direct the proceeds to several additional uses.

The bill would distribute a portion of the proceeds to military-related programs, innovation hubs, federally qualified health centers and the establishment and operation of an office to pursue and coordinate grant funding on behalf of the state.

On select file, Sen. Robert Clements of Elmwood offered an amendment to eliminate the proposed distribution to innovation hubs and instead direct those proceeds to the Affordable Housing Trust Fund.

As amended on the first round, LB1363 would allow counties to retain $1.15 of each $3.25 in documentary stamp tax collected to offset reduced inheritance tax rates for certain beneficiaries. The rates would go into effect for decedents dying on or after Jan. 1, 2024.

The Clements amendment also would allow refunds to those who paid inheritance taxes with respect to a person who dies on or after that date and before the bill’s operative date.

After adopting the amendment on a vote of 26-6, senators advanced LB1363 to final reading by voice vote.

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