Bill cutting corporate tax becomes Nebraska law
Gov. Dave Heineman signed a new law Wednesday that will cut most Nebraska corporations’ income taxes by up to $1,120 per year. LB888, introduced by State Sen. Carroll Burling of Kenesaw, raises the lowest corporate income tax bracket by $50,000, to a maximum of $100,000 annual income. That means a corporation can earn up to $100,000 per year and still be taxed at the lower rate of 5.58%. Higher earnings still will be taxed at 7.81%. State tax officials said the new law have the greatest impact on about 1,200 small corporations that generate between $50,000 and $100,000 income each year.
Heineman said the change represents a significant amount to small businesses. “This will help more of our home grown businesses develop and prosper,” he said. Barry Kennedy, president of the Nebraska Chamber of Commerce and Industry, said his group has sought the corporate income tax change for several years. Burling said corporate income tax brackets have not been adjusted for 25 years and that inflation alone had served to put many smaller corporations in the higher bracket.
Gov. Heineman Signs Tax Relief for Nebraska Businesses into Law
Gov. Dave Heineman today signed LB888 into law. The bill lowers taxes for Nebraska businesses and is the first adjustment to the state’s corporate tax brackets since 1982. The bill provides tax relief that is aimed at small businesses by extending the lower tax bracket for corporate income tax filers. “This law will have a positive impact on our ability to attract new businesses to our state and keep our existing businesses growing,”
Gov. Heineman said. LB888 was introduced by Sens. Carroll Burling of Kenesaw, Tim Gay of Papillion, Pete Pirsch of Omaha, and was prioritized by Sen. Scott Lautenbaugh of Omaha. Nebraska Tax Commissioner Doug Ewald said, “While all businesses that file as corporations will benefit from this law, our 1,200 small businesses will experience the greatest positive impact.” The Tax Foundation reports that of the surrounding states with a corporate income tax, only Iowa had a higher corporate tax than Nebraska. Nebraska had the second highest rate and the 17th highest rate nationally. Barry Kennedy, president of the Nebraska Chamber of Commerce & Industry, said, “LB888 is a sensible and fiscally-sound fix. With the enactment of this important legislation, state senators and the Governor have significantly improved Nebraska’s tax policy and business climate.
LB888 provides Nebraska’s small businesses their own economic stimulus package –- one which will boost business investment, create new jobs and keep the state’s economy on track for long-term growth.” The Legislature passed LB888 on Monday 48 to 0.
Nebraska Legislature approves ignition locks, sales tax on digital downloads
First- and second-offense drunk drivers would be required to drive cars equipped with ignition interlock devices under a measure given 43-0 final approval Tuesday by the Legislature. LB736, introduced by State Sen. Tony Fulton of Lincoln, now goes to Gov. Dave Heineman.
Also Tuesday, lawmakers voted 34-4 to send the governor a bill (LB916) that would impose Nebraska sales taxes on music, movies and books downloaded from the Internet, beginning Oct. 1.
A coalition of businesses, including Apple, had opposed LB916. Supporters said the bill is a clarification of existing law. The Nebraska Supreme Court ruled in 1992 that digital versions of products should be taxed the same as if they were tangible products, although the state has not enforced the tax. LB916 results from Nebraska’s participation in the Streamlined Sales and Use Tax Agreement, a multi-state effort to simplify sales tax rules and encourage online and mail-order retailers to voluntarily collect state and local sales taxes from customers.
Area state senators reflect on Legislative session’s top issues
The second session of the 100th Nebraska Legislature was a short one, but it was jam-packed with big issues. Topics like highway funding and the future of the State Fair dominated discussion during the session, which ended Thursday. The Independent caught up with four Central Nebraska senators Dist. 33 Sen. Carroll Burling of Kenesaw, Dist. 35 Sen. Ray Aguilar of Grand Island, Dist. 41 Sen. Vickie McDonald of St. Paul and Dist. 34 Sen. Annette Dubas of Fullerton to find out their thoughts on Legislature’s hot topics this year. Each of the four lawmakers was generally happy with the way their colleagues spent the state’s $475 million cash reserve.
The state dipped into the reserve to move the State Fair, match federal funds for roads and pay Republican River irrigators. But the overall amount used was dwarfed by the amount legislators chose to save, something that pleased the area’s senators, who advised setting aside money for tougher economic times.
None of the area’s senators were particularly excited about the Legislature’s compromise of using cash reserves to help match federal highway funds after Gov. Dave Heineman vetoed an increase in the state’s gas tax. McDonald, Burling and Aguilar said they’d prefer to fund the roads primarily through a user fee, like a gas tax, which those passing through the state would help pay. In Central Nebraska, the Legislature’s true big-ticket item was its decision to move the State Fair to Grand Island.
Naturally, all four senators were enthusiastic about the opportunity for the area. Dubas, on the other hand, acknowledged some surprise, even though she was a member of the Agriculture Committee that helped craft the bill. “I didn’t see it coming,” she said. “I really didn’t think the State Fair would leave Lincoln.”
New method of gathering roads dollars approved by Nebraska senators
A new method of taxing fuel in the state has received final approval from the Legislature. It won’t cause drivers to pay more in the short term, because an appropriation bill attached to the measure was removed by lawmakers.
Besides creating a 5% wholesale tax on fuel, the bill (LB846) approved Thursday would take $15 million from the state’s reserve over the next three years to help pay for road construction.
Governor signs bill offering tax incentives to businesses
Gov. Dave Heineman on Thursday signed the Super Advantage Act into law. LB895 will offer businesses tax incentives for creating jobs that pay well above state and local averages. Heineman said: “This legislation is about the future and creating higher-paying jobs for the next generation of Nebraskans.”
Baier said he already has begun to receive inquiries from business consultants in other states who are interested in the program. The Economic Development Department is planning a campaign to market the new program, he said. To qualify, businesses must invest at least $10 million in new operations in
The company would receive tax credits equal to 10% of the average annual compensation of new workers and 15% of its investment. Heineman said the measure builds upon the success of the 2005 Nebraska Advantage Act, which he said has attracted 148 companies to build or expand in
New method of gathering roads dollars approved by Nebraska senators
A new method of taxing fuel in the state has received final approval from the Legislature. It won’t cause drivers to pay more in the short term, because an appropriation bill attached to the measure was removed by lawmakers.
Besides creating a 5% wholesale tax on fuel, the bill (LB846) approved Thursday would take $15 million from the state’s reserve over the next three years to help pay for road construction.
Nebraska lawmakers try to avoid fuel tax hike by dipping into reserve
Fifteen million dollars would be taken from the state’s cash reserve to avoid another fuel tax hike, under a compromise agreed to Tuesday by state lawmakers. Nebraska lawmakers voted 28-0 to create a new fuel tax mechanism that would be based on the wholesale price of gasoline. They hope the new mechanism might stabilize future highway construction funding, even if fuel consumption declines.
In advancing LB846, lawmakers also agreed to lower the state’s current motor fuel tax enough that the new taxing mechanism wouldn’t take any more money from consumers’ pockets than they already are scheduled to start paying this summer. LB846 originally called for a tax increase of about 3 cents a gallon to help raise about $16 million more for road construction. But worries about piling onto record-high gas prices caused senators to change course.
Instead, $15 million will come from the cash reserve, if the bill wins final approval. The money would be used to begin work on $76 million in projects already given some money by Congress. That work would include Kennedy Freeway projects in Sarpy County, the Lincoln South Beltway and the Heartland Expressway across the Panhandle.
Sen. Deb Fischer of Valentine came up with the plan and said it is supported by Gov. Dave Heineman. The new gasoline tax would not take effect until July 1, 2009.
Nebraska cell phone users lead the charge
Which state has the highest taxes, fees and charges tacked onto consumers’ monthly cell phone bills? The Cornhusker State is the nation’s leader when it comes to fees and taxes for cell phones, according to a new survey by CTIA-The Wireless Association, which represents the nation’s wireless companies. Most of these charges also apply to land-line phones. The advocacy group is using the survey to argue that wireless customers are paying excessive monthly charges that average about 15%nationally.
Nebraska ranks No. 1 mainly because of two charges. One is a 4.37% monthly fee for the state’s Universal Service Fund, the highest in the nation of any such state fund. The other is for a special business tax assessed mainly in Omaha and Lincoln. The tax also is known as an occupation tax. Nebraska’s monthly charge on cell phone bills averages 22.54% state and local charges totaling 18.35% plus the federal rate of 4.19%.
In contrast, cell phone customers in Oregon pay a total of 5.85% in state and federal charges, putting it last among the 50 states. At least five other Nebraska cities Bellevue, Columbus, Norfolk, South Sioux City and Seward charge local occupation taxes on cell phone customers, although the percentages are lower than in Omaha (6.25%) and Lincoln (5.5%).
Cell phone customers in rural areas, without occupation taxes, generally pay less than consumers in about 30 states, according to the survey. U.S. Rep. Adrian Smith co-sponsored a House bill last year proposing a three-year national moratorium on new cell phone taxes. He said he plans to consider a new bill with the same goal in April.
A similar bill from Sen. John McCain of Arizona, the presumed Republican presidential nominee, is awaiting action in the Senate. Smith said a moratorium is needed because cell phone charges are rising and “ought not to be considered an easy revenue generator by government.”
State aid bill gets second-round approval; school aid would still grow at 9%
Despite complaints from a number of senators about the effects of proposed changes to the state’s school aid formula, the Legislature gave second-round approval Thursday night to a bill amended to reduce the 17% growth rate of state funding next year by another $11 million.
With the most recent version of the bill (LB988), state aid would increase overall next year to $839 million, $62 million less than original calculations, but still $70 million more than schools got this year. Schools had been slated to get nearly $901 million in state assistance for 2008-09 under Nebraska’s current state aid formula, a $132 million, a 17% increase.
LB988, introduced by State Sen. Ron Raikes of Lincoln, was put on a fast track after updated forecasts showed Nebraska would collect less tax revenue than previously expected through 2008-09. Last week, state senators voted for a version of the bill that trimmed the aid amount by $50 million, which still would be a 10% increase from 2007-08. But it was not enough to close an estimated $60 million budget shortfall for the current fiscal year. And the bill resulted in sharp reductions for small schools in sparsely populated areas of the state.
Thursday, Raikes returned to the Legislature with a new proposal that subtracted more from next year’s aid amount, but softened the blow to phase in over two years the deep cuts proposed for the school districts in sparsely populated areas. Raikes emphasized that the bill does not “cut” state aid. Overall, the state is still increasing its allocation to schools, but a number of districts will be receiving less money. “Keep in mind that state aid still increases by more than 9% next year,” he said. “Be careful how you use the word ‘cut.’”