Cornhusker Economics: 2020 Nebraska Property Tax Changes

Cornhusker Economics: 2020 Nebraska Property Tax Changes

The Nebraska Unicameral enacted significant property tax relief legislation in the closing days of the 2020 legislative session. The last-minute compromise was negotiated by seven legislators selected by the Speaker. The compromise establishes a refundable state income tax credit of an estimated 6% of the property taxes paid for local schools (excluding property taxes for school bonds and school budget overrides). Taxpayers will be able to claim this credit on next year’s Nebraska state income tax return. For fiscal years (FYs) 2021-22 through 2023-24 (i.e. from July 1, 2021, through June 30, 2024), the amount available for the refundable state income tax credits will be increased from the $125 million base amount if and only if sales and income tax collections exceed projections and have an annual increase of at least 3.5%. For FY 2024-25 the amount available for the refundable state income tax credit will increase to $375 million. That could lead to refundable state income tax credits of as much as 18% of the property taxes paid to local schools...

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