On August 20th, the Nebraska Legislature concluded its special session to address property taxes. This session, which spanned nearly 17 days, saw a variety of bills and proposals aimed at finding a solution that could secure the necessary 33 votes in the Legislature.
One of the initial proposals that garnered significant attention involved removing state sales tax exemptions on over 100 goods and services. This included exemptions critical to the technology sector, such as information services, data processing, and advertising services. These proposed changes would have had far-reaching implications for technology companies operating in Nebraska, regardless of their size or industry.
Thankfully, by the session’s end, the Legislature chose a different path, passing LB34—a bill designed to provide property tax relief without imposing new taxes or expanding the sales tax base. The key elements of LB34 include:
- Automatic Property Tax Credits: The bill repurposes existing property tax credits, ensuring that these are automatically received by Nebraska property taxpayers. Previously, these credits were applied to income taxes, which left out about 50% of Nebraskans who did not make this election.
- Additional Funding: The bill allocates an additional $185 million in 2024 to the new credit fund.
- Local Spending Caps: To further control rising property tax collections, the bill pairs this relief with local spending caps.
Importantly, the relief provided in LB34 is funded through revenue growth and state budget adjustments, as outlined in LB2 and LB3. This approach ensured that no new taxes or tax shifts were necessary.
Looking ahead to the 2025 session, it is vital that we remain engaged with policymakers to ensure the voices of Nebraska’s technology community are heard. Tech Nebraska will continue to inform and educate on how proposed policies impact our industry. Together, we can ensure that our state’s policies are conducive to economic growth, are financially sustainable, and do not benefit some Nebraskans at the expense of others.
