Homestead exemption, consumption tax proposals considered

The Revenue Committee heard testimony July 31 on several measures related to property taxes, including one that would replace Nebraska’s current tax system with a consumption tax on new goods and services.

LB22, introduced by Omaha Sen. John Cavanaugh, would create a new homestead exemption under which the first $100,000 of an owner-occupied home’s actual value would be exempt from taxation.

Cavanaugh said the bill would provide targeted property tax relief to the average Nebraska homeowner, in contrast to Gov. Jim Pillen’s proposal in LB1, which Cavanaugh said would provide a greater overall tax benefit to large landowners.

“I wanted an option that did not give large, seven-figure tax breaks to extremely wealthy landowners who don’t even live here, like Ted Turner and Bill Gates,” he said.

Among other bills heard by the committee were:
• LB30, sponsored by Sen. Jen Day of Omaha, under which veterans who are at least 10% but less than 100% disabled due to a service-connected disability would qualify for a homestead exemption in an amount based on their disability percentage;
• LB16, introduced by Bayard Sen. Steve Erdman, which would eliminate state sales, use and income taxes, as well as local property and inheritance taxes, and impose a 7.5% tax on the use or consumption of taxable property or services; and
• LB33, sponsored by Sen. Tom Brandt of Plymouth, which would increase the total amount of credits available under the Nebraska Property Tax Incentive Act to approximately $861 million for tax year 2024 and $1.2 billion for tax year 2025.

The committee took no immediate action on the bills.