Neb. Gov. Heineman Signs Tax Relief Bills into Law

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LINCOLN, Neb. (AP) -- Nebraska Gov. Dave Heineman has signed a series of tax relief measures into law, and he says the bills passed this year will amount to $412 million in tax reductions over the next five years.

Heineman announced Wednesday that he has approved five tax bills. He expects to sign a sixth this week.

The new laws include an indexing measure to ensure tax brackets keep pace with inflation, a sales tax exemption on farm machinery, a $25 million increase to Nebraska's property tax credit program and two laws that would expand homestead exemptions.

The sixth bill is a sales tax exemption for purchases made by historic car museums.

Sen. Galen Hadley, chairman of the Revenue Committee, says he wants to work next year on the way farmland is taxed.

LL 897 deals with individual income tax. This will impact the most Nebraskans. It will adjust Nebraska's individual income tax brackets for inflation.

You won't have to pay tax on your social security income if you're married and make less than $58,000 or are single and make less than $43,000.

And it would give veterans the option to make a one-time choice to exclude parts of their military retirement benefits. Veterans can chose to either exclude 40 percent of their military retirement benefit income for seven consecutive years or 15 percent of those benefits for all taxable years after the person turns 67.

Two of the new laws apply to Nebraska's homestead exemption. LB 986 expands the program so more Nebraskans could qualify. For example, if you're single and make between $26,000 and $39,500, you'll be exempt from some or all of your property taxes. If you're married, you'll be exempt if you earn between $31,600 and $46,900.

This bill also includes certain individuals with developmental disabilities.

The other Homestead Exemption bill, LB 1087, provides 100 percent exemption for honorably discharged veterans. For a veteran to qualify, they have to be living completely on service connected disability.

Widows and widowers of honorably discharged veterans or active service men or women also wouldn't have to pay those taxes if they don't remarry.

Also, those in commercial farming wouldn't have to pay sales tax on the sale, lease, rental or storage of repair or replacement parts for farm machinery and equipment under LB 96.

LB 867, which hasn't been signed into law, but the Governor said he will sign, includes very specific exemptions. It exempts sales and use taxes on purchases made by historical automobile museums and on the sale, lease or rental of gold and silver Bullion and U.S. Postage charges. Non-profits donating land wouldn't have to pay some taxes and the bill will speed up the turn back payments from sports arena sales tax to the Ralston Arena. Natural gas for motor vehicle fuel will also be exempt from retail sales tax.

Finally, the Governor signed LB 905 increasing the property tax credit program. It adds 25 million dollars a year for the next five years, plus 115 million dollars in ongoing funding.

But, the Governor said more property tax relief is needed. He said it isn't too late for the legislature to introduce an amendment.