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LINCOLN — Nebraska’s version of “One Big Beautiful Bill” for property tax relief went up in smoke Monday despite an effort to narrow new revenues to increased taxes on cigarettes and vapes.
It becomes the third property tax package in the past year to propose and fail to garner traction to use new sales tax revenues to lower property taxes. It also deals a significant blow to Gov. Jim Pillen’s pledge to keep property taxes flat this year as he eyes reelection.
Legislative Bill 170, led by State Sen. Tom Brandt of Plymouth, failed 30-15. It needed 33 votes to overcome a filibuster from opponents across the political spectrum who opposed the tax “shift.
The proposal originally sought to add sales taxes to 20 currently exempt goods or services, including pop, dating services, chartered jets, swimming pool cleaning and maintenance services and pet grooming. It also sought to hike the taxes on cigarettes (up to $1.36) and vapes (up to 40%).
The original package anticipated $110 million in new revenue, with $100 million directed to property tax credits to offset property taxes paid to local K-12 school districts.
“Property taxes remain one of the most painful burdens our residents face, impacting everyone from family farmers to first-time homeowners,” Brandt said. “This legislation is a responsible, targeted effort to address the burden by broadening Nebraska’s tax base.”
However, as happened at the end of both the 2024 regular session and an 18-day special session Pillen called last summer, lawmakers ultimately rejected expanded sales taxes on several goods and services, which could have raised about $53 million, Brandt’s estimates indicated.
“It’s just rebranded or repackaged from the prior two failed attempts that this Legislature has not moved forward for a variety of different reasons, with strong support across a politically diverse coalition,” said State Sen. Danielle Conrad of Lincoln.
Brandt sought to narrow LB 170 to a lower revenue target of $80 million for new property tax relief each year by striking any broadening of the sales tax base. Instead, he proposed to increase cigarette taxes to $1.64 per 20-pack, which he said would raise nearly $60 million each year, and to increase vape taxes to 40% wholesale, which he said would raise about $15 million.
Both versions of LB 170 also included a proposal from Fremont State Sen. Dave Wordekemper to capture a 20% tax on cigars, cheroots and stogies purchased online, which senators estimated would raise $100,000 in revenue.
