Revenue Committee Hears Inheritance Tax Testimony

By Gordon HopkinsThe Revenue Committee heard two and a half hours of testimony on LB (legislative Bill) 468, which was introduced by Senator Robert Clements (R-District 2), on Thursday, February 6, 2025. The bill would decrease the inheritance tax rate paid by some relatives. Currently, there are three rate levels: Class I, immediate relatives (parents, siblings, children) pay one percent in excess of $100,000; Class II, remote relatives (such as uncles, aunts, nieces, nephews) pay 11 percent in excess of $40,000; Class III, all others friends, neighbors, etc.), pay 15 percent in excess of $25,000.LB 468 would create a single rate of one percent regardless of relationship.The reduction or elimination of inheritance tax has been a goal of many Nebraska politicians for years. However, many county officials, especially those from rural areas, are long been concerned about the loss of those funds should inheritance taxes be eliminated.With that in mind, LB 468 replaces that lost revenue with increases in a variety of other taxes and government fees, such as marriage licenses, documentary stamp taxes and nameplate capacity tax.One of the bill's supporters who testified was Jefferson County Commissioner Mark Schoenrock, who said in part, “ When I last campaigned for re election, I knocked on over 1000 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.”Others, however, opposed the bills, such as Lori Pirsch, Douglas County Budget and Finance Director, who agreed that critical services would not be cut but doubted the proposed replaces would be enough to make up the loss of inheritance tax.“If you look at the fiscal note,” said Pirsch. “We still don't get to, you know, the $20.7 million that, on average, Douglas County has been taking in over the last five years. So, it's not a revenue neutral for us.”

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