Nebraska lawmakers passed a bill that cuts individual and corporate income tax rates. They also passed legislation that speeds up the phase out of state taxation of Social Security income and expands a program intended to offset the amount of property taxes used to fund education.
LB 872 would have eliminated community colleges’ general fund levy authority.
LB 939 will cut Nebraska’s top individual income tax rates from the current 6.84% to 5.84% by 2027.
LB 873 and amendments phase-in reduction of the state’s top corporate income tax rate approved by lawmake3rs last year. The bill cuts the rate from 7.5% to 5.84% by 2027.
LB 825 includes provisions that will exempt all income tax on Social Security by tax year 2025.
LB 723 and proposals ensure that a refundable state income tax credit does not fall below its current amount of $548 million.
LB 873 increases the credit amount to $560.7 million for tax year 2023 and will then increase by an allowable growth percentage of up to 5% beginning in tax year 2024.
The state Department of Revenue estimates that LB873 will reduce state general fund revenue by $115.5 million in fiscal year 2022-23 and $213.8 million in FY2023-24. When fully implemented in fiscal year 2027-28, it will reduce revenue by an estimated $948 million.
Information obtained from Unicameral Update.