Revenue Committee
January 29, 2025
Committee Chair: Sen. Brad von Gillern | Bills Heard: 3 | Full Transcript (PDF)
LB401: Technical clarification and transparency provisions for passthrough entity tax (PTET) and notice of deficiency requirements
Introduced by: Sen. Brad von Gillern | Testimony: 1 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sen. von Gillern seeks to clarify Nebraska's passthrough entity tax and require the Department of Revenue to explain the basis for tax assessments. The bill makes technical changes to PTET provisions and mandates written statements in notices of deficiency, enhancing transparency in tax administration.
Why it matters: The passthrough entity tax has saved Nebraska business owners hundreds of millions in federal taxes by allowing them to circumvent the $10,000 federal SALT cap. Requiring detailed explanations for tax assessments could reduce costly disputes and appeals while protecting taxpayer due process rights.
What they're saying: - Proponent Nicholas Bjornson (tax attorney): "Discovering the tax commissioner's basis often took years, particularly during administrative appeals. This lack of clarity and transparency has raised due process concerns." - Sen. Jacobson: Clarified that PTET does not impact state revenue, only cash flow, as the state temporarily holds tax payments before refunds are issued.
By the numbers: The fiscal note shows $4.5 million for the biennium, but Sen. von Gillern indicated this may be inflated and said he's working with the Department of Revenue to clarify the actual cost.
What's next: No vote was taken. Sen. von Gillern indicated he may bring an amendment to remove expanded language and return the fiscal note to zero, similar to last year's LB1059, which advanced 8-0 before stalling on the legislative calendar.
Committee sentiment: Supportive: Sen. Mike Jacobson, Sen. Tony Sorrentino
Sentiment estimated from questions and comments — not stated positions.
LB272: Expansion of homestead exemption for partially disabled veterans
Introduced by: Sen. George Dungan | Testimony: 6 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sen. Dungan proposes expanding Nebraska's homestead exemption to disabled veterans with service-connected ratings as low as 10%, proportional to their disability level. Currently, only 100% disabled veterans qualify—a threshold that conflicts with federal VA methodology and leaves most disabled veterans without relief.
Why it matters: Nebraska's disabled veterans face property tax burdens consuming 15%+ of disability income, often outpacing cost-of-living increases. Three neighboring states and 20 total states already offer partial exemptions. Expanding relief could help retain military families in Nebraska's tight labor market.
What they're saying: - Lance Molina (disabled veteran): "My property tax increased 46.73% since 2018, while COLA only increased 22.01%. For every dollar my VA benefits went up, property taxing entities took $2.12." - Spike Jordan (County Veterans Service Officer): "The average disability rating for disabled veterans statewide is 30%. It's kind of immoral that a sizable chunk of their monthly disability compensation gets eaten up by property taxes." - Sen. Jacobson: Expressed concern about fiscal impact and asked whether income or property value caps could target relief to those most in need, noting current homestead exemptions already cost $162 million annually.
By the numbers: Fiscal note estimates range from $47.8 million (NACO) to $63 million (official). Nebraska's veteran population is declining: World War II veterans projected to drop from 885 to fewer than 10 over the next decade.
What's next: No vote was taken. Eight proponent letters submitted; zero opponent or neutral letters. Committee discussion focused on fiscal sustainability and potential amendments to add income or property value caps.
Committee sentiment: Supportive: Sen. Tony Sorrentino Skeptical: Sen. Mike Jacobson
Sentiment estimated from questions and comments — not stated positions.
LB425: Veterans Exemption for Tax Support (VETS) Act—homestead exemption for 80-90% disabled veterans
Introduced by: Sen. Bob Andersen | Testimony: 6 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sen. Andersen introduces a more fiscally conservative approach to veteran relief, limiting the homestead exemption to disabled veterans rated 80-90% by the VA. The VETS Act aims to recognize military sacrifice while managing state budget constraints, costing approximately one-third of the broader LB272.
Why it matters: Nebraska faces a negative budget projection and must balance competing priorities. LB425 targets the most severely disabled veterans—those most likely to struggle with property taxes—while remaining fiscally viable. It also serves as a potential stepping stone toward broader veteran relief.
What they're saying: - Sen. Andersen: "If I thought LB272 would pass with a large fiscal note, I would vote for it. But I don't think $63 million is something that's going to pass muster in the environment we're in right now." - Sen. Andersen (on veteran retention): "Military families are an unrealized treasure. When they retire around 40 years old, they've got another 20 years to give. They're usually educated, disciplined, leaders. In this environment with workforce challenges, we're looking for exactly those kinds of people." - Sen. Jacobson: Suggested adding income or property value caps to further target relief and reduce fiscal impact.
By the numbers: Estimated fiscal impact of $19.5 million (official) or approximately $15 million (NACO estimate pending verification), compared to $63 million for LB272.
What's next: No vote was taken. Six proponent letters submitted; zero opponent or neutral letters. Committee discussion centered on whether incremental expansion is preferable to broader coverage given fiscal constraints, and whether additional targeting mechanisms (income/property caps) could improve the bill.
Committee sentiment: Supportive: Sen. Tony Sorrentino Skeptical: Sen. Mike Jacobson
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The Revenue Committee held a joint hearing on LB272 and LB425 to improve efficiency, as both bills address homestead exemptions for disabled veterans with similar language but different scope. Committee Chair von Gillern noted that some senators were introducing bills in other committees and would come and go during the hearing. The committee used a 5-minute light system for all testifiers. Written position statements submitted by 8 a.m. on the day of the hearing via the Legislature's website are included in the official record. For LB401, there were no written letters or online comments submitted. For LB272, 8 proponent letters were submitted with zero opponent and zero neutral letters. For LB425, 6 proponent letters were submitted with zero opponent and zero neutral letters.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.