The Legislature's Revenue Committee took action on several bills Thursday -- some of which could play into a pending study of the Nebraska tax system.
The committee advanced for debate a bill (LB82) by Sen. Paul Schumacher of Columbus that would give Nebraskans the option to pay more taxes up-front in exchange for an inflation-adjusted credit they could use to lower their future tax liability.
Schumacher said the measure serves a double purpose: It would generate more cash for roads projects, which are cheaper now than they will be in the future, and it would give savers a new place to stick their money.
He said the bill is aimed at Nebraskans who aren't satisfied with low-interest savings accounts, the stock market or farmland. Residents who pay taxes beyond what they owe could apply that amount to future tax debts, with a credit adjusted for inflation and the same interest as a 10-year Treasury bill.
Taxpayers would have to wait five years to claim the credits unless they were 62 or older. The credit would be nonrefundable, meaning a taxpayer's liability would never drop below zero. It also would impose a 10 percent "transfer fee" for anyone who claimed the credit early, such as someone who moved out of state.
For taxpayers who die, the state would use the credit to pay down inheritance taxes and other debts owed, impose a 10 percent fee and transfer the rest of the credit to an heir.
The committee also amended and advanced a bill (LB474) by Sen. Bob Krist of Omaha, which would create a moratorium on any new local sales and use taxes until July 15, 2014.
Earlier, Sen. Ernie Chambers of Omaha introduced a bill (LB266) to repeal the authorization for cities to raise their sales taxes with a vote of the people. The bill would have struck the authority for the potential increase in sales tax up to 2 cents. Without a law passed last year over Gov. Dave Heineman's veto, cities could add only as much as 1.5 percent to the state's 5.5 percent sales tax. With Thursday's action, Chambers' idea is no longer on the table.
The committee also advanced a bill (LB96) by Sen. Annette Dubas of Fullerton that would put Nebraska agricultural machinery repair businesses on par with surrounding states by exempting purchases of repair and replacement parts for agricultural equipment from sales and use tax. It would cost the state some $17 million over two years.
Two bills failed to get enough votes to move out of committee:
* LB191 by Sen. Jeremy Nordquist of Omaha would provide an incentive for redevelopment and preservation of historic properties, creating jobs and driving economic development in both rural and urban communities across the state. Called the Nebraska Job Creation and Mainstreet Revitalization Act, it would provide a credit against personal, corporate or fiduciary income tax and state bank franchise tax to rehabilitate historically significant income-producing properties. It would provide a 20 percent credit for qualified expenses up to and including $10 million and a 10 percent credit on qualifying expenses above $10 million.
* LB346 by Sen. Rick Kolowski of Omaha would help schools bolster security. It was introduced in reaction to recent violence in schools -– both nationally and in Nebraska. It would allow school boards, by a super majority vote, to add 1 cent above their existing maximum property-tax levy authority to pay for security improvements.
Kolowski said violence is not confined to urban areas, noting that in 1995, Chadron Middle School teacher Andy Pope was shot while teaching and in January 2011, Millard South High School Assistant Principal Vicki Kasper was fatally shot. Kolowski is a former Millard West High School principal.