Competing Legislation Looks To Address Inheritance Tax

By Gordon HopkinsOn Wednesday, March 12, 2024. the Nebraska Legislature Revenue Committee heard testimony on a constitutional amendment that would prohibit the levying of an inheritance tax.The elimination of inheritance tax has been a goal of a great many legislators for many years. The sticking point has always been how much counties, particularly rural counties, depend on that revenue to operate. This amendment, LR 13 CA, would eliminate the tax entirely and does not provide for any replacement revenue. An alternative under consideration is LB 468, which would reduce, but not eliminate, inheritance tax. This bill also provides alternative revenue sources.Senator Bob Hallstrom (R-District 1), who introduced the amendment, testified, “We are trying to grow Nebraska and keep citizens here, but because of this tax they may choose to move to another state to avoid placing a tax burden on their loved ones after passing.”“The inheritance a family member or friend leaves behind is often their last act of love and gratitude,” Hallstrom said. “We are trying to grow Nebraska and keep citizens here, but because of this tax they may choose to move to another state to avoid placing a tax burden on their loved ones after passing,”Also speaking in support of the amendment was Jim Smith with the Platte Institute, “So whether we call this an inheritance tax, death tax, or even a gratitude tax, this form of taxation is an outdated policy that no longer fits with the modern economic landscape, and that certainly no longer fits with Nebraska’s values.” County officials who spoke in opposition to the amendment pointed out the importance of the revenue that would be lost.Jefferson County Commissioner Mark Schoenrock made very clear his support for LB 468 and opposition to LR 13 CA. While he was unable to attend the hearing in person, Schoenrock submitted his testimony in writing, “Nobody likes inheritance tax, but the facts are that Nebraska counties depend on it as a significant source of our revenue to provide essential services to our fellow citizens. If it is eliminated, we have two choices: cut critical services or raise property taxes. We have worked long and hard with Senator Clements and Governor Pillen for a much better alternative in LB 468 to identify solutions to significantly cut the inheritance tax and ensure that Nebraska county government retains the revenue needed to provide essential services to our citizens. When I last campaigned for re-election, I knocked over a thousand doors and the overwhelming message from my constituents was that although they would prefer a reduction in their taxes, they do not want the critical services provided by county government to be cut.” Schoenrock wrote, “I know many of our county boards across Nebraska, and I believe we are fiscally prudent and responsible managers of our respective county budgets. We strive to operate efficient operations, and take our responsibilities seriously to responsibly manage the revenue provided by our fellow Nebraska taxpayers. LB 468 presents some common sense, practical solutions to significantly cut the inheritance tax and ensure sufficient and sustainable county government revenue. Our citizens do not want less law enforcement, less road and infrastructure maintenance, less ambulance service especially in our rural areas, less courthouse services, and all of the other critical services provided by county government. These services ensure the safety, health and well being of our fellow citizens and directly support our economy. LR 13 CA significantly puts all of that in jeopardy.”

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