June 18, 2013

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Senator: Tax study may have fox guarding the hen house

June 17, 2013 by
Sen. Tyson Larson

Sen. Tyson Larson

Governor Dave Heineman proposed a major shift in Nebraska’s tax system this year — eliminating the income tax and replacing those dollars by expanding the sales tax.

The legislature rejected Heineman’s proposal and opted instead for a study of the state’s tax system, with a recommendation for the next session.

Senator Tyson Larson, of O’Neill, doesn’t like the make-up of the committee that will do the study.

“It would’ve been better if we’d had an outside group that could come in and analyze our tax system in a fashion that wouldn’t have senators involved,” Larson says. “That would have been better for the state as a whole to look at what each industry provides the state and what are the fair amount of taxes for those industries.”

Larson, a member of the Appropriations Committee, says he is concerned about more of a tax shift onto Nebraska’s agricultural producers.

“Farmers and ranchers pay a disproportionately high property tax but they get their tax breaks on the input side of it,” Larson says. “With senators themselves doing it, there’s going to be people trying to protect certain interests and I’m not sure we’ll get a lot out of the tax study.”

Larson says he would like to see the legislature consider a so-called “fair tax” proposal.

“It’s a system we need to look at, whether that’s the flat tax, which is something I’ve advocated for for a long time or if that’s a fair tax, which focuses more on sales tax, which I’m very open to as well,” Larson says. “If we can broaden the base and cut out the deductions, I think that’s something we should definitely look at.”

By Jerry Oster, WNAX, Yankton

Filed Under: Agriculture, Business, Legislature & Government, News, Taxes

Lawmakers skedaddle with no tax reform? For shame, say cattlemen

June 7, 2013 by

Nebraska legislators adjourned their 90-day session this week without bringing reform to the state’s property tax system.

It’s a big disappointment for members of the Nebraska Cattlemen Association. The group’s Pete McClymont says the state’s current tax system is unfair to livestock producers and farmers.

“Two-thirds of every property tax dollar goes to the state aid to fund education,” McClymont says. “It puts, in our opinion, a very high burden on what people out in the country have to pay.”

McClymont, the vice president of legislative affairs for the cattlemen, says livestock producers have been under a great deal of financial strain from many months.

He blames a combination of factors, including the drought, skyrocketing land prices and rising property taxes, for driving many cattlemen out of business.

“They’re having to sell off cows but their property tax has gone up because of comparable land sales,” McClymont says, “That’s really hard for a rancher to sit there and pay the high property tax when their money-makers, due to the drought, have had to go down the road.”

McClymont says having education funded on the backs of cattle producers and farmers is blatantly unfair.

While legislators failed to pass property tax reform, they did authorize an extensive study to be done during the interim. Lawmakers assure, tax reform will be on the agenda again come January.

By Jerry Oster, WNAX, Yankton

Filed Under: Agriculture, Legislature & Government, News, Taxes

Gov. Heineman expects broad tax reform next year (AUDIO)

June 3, 2013 by

Gov. Dave Heineman says he expects comprehensive tax reform next legislative session.

The governor has signed three tax break bills into law, saying they represent small steps toward tax relief for Nebraskans. He adds he expects more next legislative session.

Heineman says broad tax relief starts with a close look at the current tax system.

“We have a tax code that was designed in the 1960s for the 1960s. We’re now in the 21st Century,” Heineman tells reporters during a news conference in his Capitol office.

Heineman says he wants a tax system that helps create high-paying jobs.

“At the end of the day, I want a modern tax code that is going to create more jobs for Nebraska’s young people and our Middle Class families,” Heineman says.

Heineman proposed the elimination of both the individual and corporate income tax this legislation session. To offset the loss of state revenue, the governor proposed eliminating about half of the sales tax exemptions the state grants.

The legislature, after hearing strong opposition during public hearings, balked at taking such a drastic step. Instead, the legislature approved creation of a special commission that will study the current tax system and propose changes for the Unicameral to consider during the next legislative session.

AUDIO: Brent Martin reports [:35]

Filed Under: Legislature & Government, News, Taxes Tagged With:

Gov. Heineman signs tax breaks into law, looks for more next year (AUDIO)

June 3, 2013 by
Gov. Dave Heineman holds a news conference with state senators

Gov. Dave Heineman holds a news conference and bill signing ceremony with state senators

Gov. Dave Heineman has signed three tax break bills into law, saying they represent small steps toward tax relief for Nebraskans.

Heineman added during a news conference that he hopes for much broader tax relief next year.

Heineman signed into law LB 308, which eliminates the federal alternative minimum tax calculation for individual state income tax returns. That bill also contains a provision that allows small businesses to carry forward net operating losses for 20 years rather than the current five-year limit.

“This change is especially important to small, start-up businesses,” Heineman stated during the news conference in which he signed the bills. “These are the very businesses that we are targeting as part of our larger Nebraska economic development strategy.”

Heineman also signed into law LB 573 and LB 296.

LB 573 gives a tax break to employee-owned businesses, allowing the employee owners to exclude dividends and capital gains from their taxable incomes.

LB 296 increases the tax deduction for those contributing to a Nebraska College Savings Program account. State law limits the tax-exempt contribution to $2,500 for a married person filing separately and $5,000 for a married couple filing jointly. The bill doubles those amounts.

“These important tax bills represent small steps forward regarding tax relief and tax competitiveness, but they are important steps forward. They are important to individual and small business taxpayers,” Heineman stated.

Heineman added he had hoped for more this legislative session and will look for more next session.

“Next year, our state will have the opportunity to take a giant step forward regarding tax relief and tax reform and I’m looking forward to that discussion,” said Heineman.

The legislature has approved a special commission to study the state tax system. It will offer recommendations to consider next session.

AUDIO: Gov. Dave Heineman signs three tax break bills into law. [5:15]

Filed Under: Legislature & Government, News, Taxes Tagged With:

Committee created to take comprehensive look at state tax system (AUDIO)

May 30, 2013 by

A special committee of state senators will take a comprehensive look at the state tax system.

The legislature has approved creation of the Tax Modernization Committee, comprised of the Revenue Committee, chairmen of various other committees and two at-large members. LR 155 passes easily, 40-0 with five senators not voting.

Sen. Galen Hadley of Kearney, as chairman of the Revenue Committee, will chair the tax committee. Hadley told colleagues studies have been done before.

“We’ve had three comprehensive looks and like a lot of studies, they’re on the shelf,” Hadley noted during legislative floor debate, “but we’re going to use those three comprehensive studies as a starting point.”

The legislation calls for the Tax Modernization Committee to examine the Tax Policy Reform Commission of 2005-2007 and a study undertaken between 1986 and 1988 by Syracuse University.

Hadley issued a challenge to colleagues.

“And I’m going to throw out a comment about the body. Will you have the courage, after we’re done with this study, to come in and vote on some of the proposals that might come out of it?” Hadley asked. “Because in order to lower some taxes we might have to raise some taxes.”

The Tax Modernization Committee will be comprised of the Revenue Committee, plus the chairs of the Appropriations, Health and Human Services, Education, Agriculture and Planning Committees. Two at-large members will be added.

The committee is to submit its findings and any recommendations to both the legislature and the governor no later than December 15th. It is to propose language for legislation to be debated in the 2014 legislative session and identify any areas that might require additional study.

Sen. Tom Carlson of Holdrege issued a caution to colleagues, warning about the difficulty in changing tax policy.

“And, we also need to be very careful of whatever we choose to discuss and maybe implement that it doesn’t have the unintended consequence of raising property taxes,” Carlson stated.

Carlson said that any change in state tax policy could shift burdens to local government, which might be forced to raise property taxes.

The legislation specifically charges the committee to consider fairness, competitiveness, simplicity and compliance, stability, adequacy, and complementary tax systems in its study.

Sen. Dave Bloomfield of Hoskins urged members of the committee to not just talk with each other.

“I hope the committee gets out and talks to Nebraska, finds out who is suffering the pain; look hard at property tax,” Bloomfield said.

AUDIO: Unicameral debates LR 155, creating the Tax Modernization Committee. [1 hour, 16 minutes]

Filed Under: Featured Stories, Legislature & Government, News, Taxes
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