High property taxes for Northeast homeowners spark debate over marijuana and ammunition tax laws
Nebraska’s creeping increase in property taxes has been the subject of much debate lately. High property taxes and rising inflation have sparked discussions about how best to reduce the state’s property tax burden.
Last year, Governor Jim Pillen made a plan to lower state income tax rates. His sights are now turning to the next tax burden: the property tax. But there is still much debate about whether his plan will be of any use Nebraska and provide homeowners with much-needed relief.
Here you can find out everything you need to know.
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Nebraska Property Tax Relief Plan
Pills Bill 1 tries to Reduce property tax Bills for Nebraska residents have been reduced by an average of 50%.
“In just a few years, Nebraskans will be paying $1 million a day in property taxes,” Governor Pillen said in a press release. “That’s $6 billion a year. Property taxes hurt young people, our seniors, homeowners, renters, farmers and business owners.”
The proposal also includes capping local government spending while phasing out most property taxes for grades K-12 over three years. However, Pillen’s bill comes with a few caveats:
- Property tax revenues, which are used extensively for K-12 schools, would cost the state $2.6 billion
- The loss of revenue from property taxes would largely be covered by an increase in sales tax for citizens.
If the proposed plan is approved, it will be the largest state tax reform since 1967.
Resistance to property tax reform in Nebraska
Critics of Governor Pillen’s plan claim that the property tax cut favors wealthier residents while the average Nebraska renter receives more sales tax. Nebraska’s 5.5% sales tax would raise additional taxes on about 100 goods and services previously tax-free. This applies in addition to the local district and city taxes.
While some argue that tax-exempt goods or services should always have been taxed, State Senator Danielle Conrad calls the proposal a “reverse Robin Hood.”
Conrad’s comment underscores the regressive nature of the sales tax, meaning that lower-income households have to spend a higher percentage of their budget on taxes.
Other critics are concerned about the new “sin tax” on sweets and soft drinks contained in the bill. Would this bill open the door to a future? Food tax in the state? Previously, these items were considered tax-free, as were services such as pet grooming, handyman services, haircuts and zoo tickets. But under the bill, these and other services could be taxed in Nebraska.
The bill also proposes higher sales tax rates on alcohol and tobacco. This includes cigarettes, spirits (not beer or wine), as well as games of skill, lottery tickets and cannabis for consumption. There were many protests in Nebraska against the new tax proposal.
Because of all this opposition, Governor Pillen called a special session at the end of July. (The session began on July 25 and will last until August 15.) So far, state lawmakers have discussed where additional funding could come from, and numerous bills have been introduced this session. One proposal would legalize and tax marijuana in the state.
Is Nebraska legalizing marijuana?
Earlier this month, Democratic Senators Justin Wayne and Terrell McKinney proposed House Bills 52 and 71 to legalize marijuana. While the use of hemp is already legal in Nebraska, these bills would create the legal framework for the cultivation, production and sale of marijuana. Anyone over the age of 21 could buy it.
While the bills are new, the idea is not. Nebraska lawmakers have tried to legalize marijuana twice in the recent past. The current bills differ from previous proposals in a few ways:
- They would legalize all Marijuana instead of just medical marijuana
- One bill proposes a 25% tax on retailers and producers, the other a 16% tax.
Proponents expect the new bills to generate significant revenue of $90 million.
But there are many opponents. The most important among them are Law enforcement agenciesFor example, Assistant Attorney General in the Nebraska Attorney General’s Office, Zachary Viglianco, cited potential health risks from marijuana legalization, such as increased risk of heart attack and cancer, and opposed the bill.
Other law enforcement officials pointed to an alleged increase in murder rates, violent crime and drunk driving in states where marijuana is legal.
But marijuana wasn’t the only tax proposed to provide tax relief for Nebraska homeowners. Lawmakers have also proposed a tax on ammunition. If the ammunition bill passes, it will make history.
How much is the ammunition tax in Nebraska?
House Bill 65, proposed by Senator Lou Ann Linehan, would impose a 5% excise tax on all ammunition sales in Nebraska.
The bill is somewhat modeled on the federal Pittman-Robertson Act. Pittman-Robertson imposes an 11% tax on firearms, ammunition and archery equipment to fund wildlife conservation projects. Nebraska’s version allocates half of the funds to wildlife conservation projects and those with PTSD, while the other half goes to property tax relief. Just recently In California, the gun and ammunition tax became law. If this new law is passed, Nebraska will be the second state in history to impose a gun and ammunition tax.
Opponents of the bill include the National Rifle Association (NRA), some Second Amendment advocates, and others who simply do not want to see higher sales taxes. The ammunition tax proposal and the marijuana law are just three of over 80 that came from the special meeting on property taxes.
Governor Pillen has not commented directly on the ammunition tax law, but has spoken out against the legalization of marijuana.
Changed property tax reform in Nebraska
After receiving a wealth of proposals in the form of special session legislation, Governor Pillen amended his bill, for example, shifting $1.8 billion of K-12 spending to the state and giving more generous treatment to key local spending like police, fire and prosecutors.
Another major change concerns the number and quality of VAT items. If the bill is adopted, no more than 100 goods and services will be subject to tax, but over 70.
The special session in Nebraska is scheduled to end in August. Bills from that session could come to a vote in one form or another in November.
The marijuana bill is a good example. Nebraskans for Medical Marijuana, a registered ballot committee, has been collecting signatures for its place on the ballot. Other items — like the ammunition tax and legalizing online gambling — were not immediately addressed during the special session, but that doesn’t mean they’re dead.
All Nebraskans are therefore urged to cast their vote. There may be a lot to consider at the ballot box this year.
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