Federal tax changes will impact Nebraskans. There will be people who won’t be able to take much of a deduction on their state income taxes. Governor Pete Ricketts says that makes our high income tax stand out more because people won’t get a deduction for it. Part of our property tax cuts and opportunities takes our income taxes down a couple of steps, He says they are modest but making some progress.
Governor Ricketts says adjustments need to be made on this end or state taxes will go up significantly. He says, “In the federal tax plan they are doing away with personal exemptions and going to a bigger standard deduction to simplify the process. Our state income tax code is tied to that federal. So if we do nothing that means it would be about a $200-million tax increase on Nebraskans. Senator Smith and I have worked on a new bill to fix that, basically a federal fix-it bill, LB 1090 that would increase the personal exemptions so Nebraskans wouldn’t see that tax increase.”
If the bill doesn’t pass the average family of four will see their tax bill increase about $536 a year.
Governor Ricketts says there are some lawmakers wanting to keep that $200-million for state use. He opposes that idea and is hoping LB 1090 passes so Nebraskans will not see that big tax increase.