Governor Pete Ricketts signed LB 873 into law at the State Capitol Wednesday morning. Ricketts says the bill delivers record amounts of tax relief to Nebraskans by cutting income taxes and reducing property tax burdens.
“With the signing of this historic bill, we will be able to provide another $3.4 billion in tax relief for the citizens of Nebraska,” Ricketts says. He says LB 873 will be phased in over five years and will provide 12 times more tax relief than any previous tax relief bill.
“Senior citizens, families, ag producers, and small businesses will see major tax savings in the coming years as a result of LB 873.”
Provisions of LB 873
- Protects the refundable income tax credit on property taxes paid to support K-12 public schools. For tax year 2021, this rebate was over 25% of school property taxes.
- Creates a new rebate on property taxes paid to community colleges. The community college tax rebate will be $50 million in tax year 2022, and will increase to $195 million by tax year 2026.
- Accelerates the phaseout of taxes on Social Security income. This income will now be fully exempt from Nebraska income taxation starting in tax year 2025.
- Phases in a reduction of the highest individual income tax rate from 6.84% to 5.84% by the 2027 tax year.
- Phases in a reduction of the business income tax rate from 7.5% to 5.84% by the 2027 tax year.