{"id":38482,"date":"2025-04-11T14:44:36","date_gmt":"2025-04-11T20:44:36","guid":{"rendered":"https:\/\/update.legislature.ne.gov\/?p=38482"},"modified":"2025-05-02T09:08:56","modified_gmt":"2025-05-02T15:08:56","slug":"proposal-to-pare-back-tax-incentives-amended-advanced","status":"publish","type":"post","link":"https:\/\/update.legislature.ne.gov\/?p=38482","title":{"rendered":"Proposal to pare back tax incentives amended, advanced"},"content":{"rendered":"

Lawmakers gave first-round approval April 11 to a proposal to roll back an array of business tax incentives to help address Nebraska\u2019s projected revenue shortfall.<\/p>\n

\"Sen.
Sen. R. Brad von Gillern<\/figcaption><\/figure>\n

LB650, introduced by Elkhorn Sen. R. Brad von Gillern at the request of Gov. Jim Pillen, would scale back tax credits related to biodiesel sales, food donations, livestock modernization or expansion projects, reverse osmosis systems, shortline railroad maintenance expenditures and renewable chemical production, among others.<\/p>\n

Von Gillern said the measure targets recently enacted programs in an effort to cause the \u201cleast negative impact to taxpayers.\u201d He said the Revenue Committee listened to stakeholders and adjusted the original proposal to retain as many effective programs as possible.<\/p>\n

A committee amendment, adopted 38-1, would make smaller cuts to certain programs and retain others that the original bill would have eliminated, including a sales tax exemption for net wrap and twine used in commercial agriculture as well as tax credits related to sustainable aviation fuel and pregnancy help organizations.<\/p>\n

As amended, von Gillern said, LB650 would increase state tax revenue by approximately $71 million over the next biennium to help the Legislature address a projected $289 million revenue shortfall.<\/p>\n

Among other changes, the amendment would:
\n\u2022 end applications for state turnback assistance for sports complexes and large public stadiums;
\n\u2022 decrease the amount that businesses are allowed to deduct for collecting and remitting sales tax; and
\n\u2022 end applications for incentives under the Urban Redevelopment Act.<\/p>\n

LB650 as introduced would have capped a credit for employers to offset the relocation expenses of qualifying employees at a total of $5 million. The amendment instead would decrease the annual limit from $5 million to $1 million beginning in 2026.<\/p>\n

The original proposal also would have eliminated a sales tax exemption related to the lease of towers used to provide internet access and certain other services. Under the committee proposal, the exemption still would apply to radio and television broadcasting.<\/p>\n

The committee amendment also includes provisions of five other bills considered by the committee this session.<\/p>\n

The provisions of LB270, sponsored by Sen. Victor Rountree of Bellevue, would allow an individual certified by a municipality to review confidential sales and use tax information to notify the Auditor of Public Accounts of suspected irregularities or discrepancies.<\/p>\n

The amended provisions of LB458, introduced by Lincoln Sen. Eliot Bostar, would update provisions related to tax sale certificates. Among several other changes, the proposal would give purchasers the option to notify property owners that the property was sold for taxes by residence service or certified mail service, rather than by residence service only, as is currently required.<\/p>\n

The provisions of LB494, introduced by Sen. Myron Dorn of Adams, would clarify current law requiring transfers to the School District Property Tax Relief Credit Fund and the Cash Reserve Fund based on state General Fund net receipts.<\/p>\n

The provisions of LB495, sponsored by Blair Sen. Ben Hansen, would remove Nebraska community colleges from the list of political subdivisions that must notify taxpayers via postcard and participate in a joint public hearing before increasing their property tax request by more than a certain percentage.<\/p>\n

Hansen said community colleges should be exempted from the process because the Legislature ended the community college area levy after fiscal year 2023-24.<\/p>\n

The provisions of LB547, introduced by Rountree, update the definitions of disabled veteran and blind veteran for purposes of state tax exemptions on motor vehicles and mobile homes.<\/p>\n

Additionally, the committee amendment would eliminate an income tax credit for qualified shortline railroad maintenance expenditures after FY2025-26. Von Gillern introduced an amendment, adopted 38-0, that instead would limit total credits to $500,000 per year.<\/p>\n

Von Gillern said the amendment would offset that increase by cutting the same amount from the total annual credits available under the Cast and Crew Nebraska Act.<\/p>\n

As amended by the committee proposal, LB650 also would repeal a law passed last year that allows construction contractors to be appointed as purchasing agents that may purchase materials tax free based on the buyer-based exemption of the contractor\u2019s client.<\/p>\n

Von Gillern introduced a further amendment, adopted 38-0, which he said would retain the exemption and instead clarify that a client is a nonprofit entity.<\/p>\n

Sen. Dave Murman of Glenvil supported LB650, saying the incentive rollback is being proposed at the same time as cuts to state spending.<\/p>\n

\u201cIn these difficult times, when revenue is coming in much less than we would like to see \u2026 we need to make these difficult decisions,\u201d he said.<\/p>\n

Omaha Sen. Kathleen Kauth also supported the bill, saying the state provides tax incentives in times when it has extra revenue. She said LB650 would \u201ctone down\u201d those incentives, rather than raise additional revenue from taxpayers, to help balance the budget.<\/p>\n

\u201cWe are in a budget crunch,\u201d Kauth said. \u201cAnd so we have to … look at cutting those extras.\u201d<\/p>\n

In opposition to LB650 was Sen. Danielle Conrad of Lincoln, who said the proposal would increase taxes on businesses to help fill a budget gap caused by \u201cinequitable and unsustainable\u201d income tax cuts passed by the Legislature in recent years.<\/p>\n

Omaha Sen. Terrell McKinney also opposed the bill, specifically the proposed repeal of the Urban Redevelopment Act. He said the measure, passed in 2021, is intended to encourage hiring and small business growth in urban areas with high levels of poverty.<\/p>\n

After adoption of the amendments, senators voted 36-2 to advance LB650 to select file.<\/p>\n","protected":false},"excerpt":{"rendered":"

Lawmakers gave first-round approval April 11 to a proposal to roll back an array of business tax incentives to help address Nebraska\u2019s projected revenue shortfall.<\/p>\n","protected":false},"author":1,"featured_media":38471,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[17],"tags":[288],"class_list":["post-38482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-revenue","tag-sen-r-brad-von-gillern"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/update.legislature.ne.gov\/wp-content\/uploads\/2025\/04\/LB650VonGillern4-11-25a.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/38482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38482"}],"version-history":[{"count":3,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/38482\/revisions"}],"predecessor-version":[{"id":38757,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/38482\/revisions\/38757"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/media\/38471"}],"wp:attachment":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}