Nebraska Legislative Bulletin

March 10, 2008

Corporate Tax Bill Placed On Legislative Agenda
Legislation to lower Nebraska’s corporate income taxes for small businesses is currently on the Unicameral’s legislative agenda. LB888 was introduced by Senator Carroll Burling of Kenesaw and prioritized by Senator Scott Lautenbaugh of Omaha. The bill could be debated on the floor at any time. LB888 would address the inflationary increases that have occurred throughout the past 33 years since the state income tax brackets were last changed. The bill has been characterized by some as a “small farm or business tax reform” that addresses the issue of “bracket creep.” Currently, Nebraska’s corporate tax is comprised of two brackets: 5.58 percent for corporations earning $0 to $50,000; and
7.81 percent for corporations earning more than $50,000. Since 1975, the $50,000 threshold has not changed, even though the rates have steadily increased over the years.

As amended, LB888 would raise from $50,000 to $100,000 the income threshold for the state’s top corporate tax rate. The bill would be operative for tax years beginning on or after January 1, 2008.

Among states with corporate income taxes, Nebraska’s top rate ranks 17th highest nationally, according to the Tax Foundation.

Among the bills that are indefinitely postponed:
• LB1175 – A bill that would have added a new 5 percent withholding requirement for any business making payments of more than $600 for construction services or for arranging for construction labor to persons who are not employees.

Remember that Legislative Bulletins are posted on our web site, www.nlassn.org. We also have each of the listed bills linked to our web site for you to read it their entirety.

Call your Legislators about these issues and invite them to the Legislators Luncheon at the Nebraska Lumber Dealers Convention on March 11. You should have received a postcard invitation ready to address to your Legislator in your convention registration materials. Call me if you need another one.

Paula Siewert, CAE
President
Northwestern Lumber Association
800-469-9078

(Legislative information provided by Nebraska State Chamber of Commerce)