LB 363 - Eliminated the sales tax on food and the food sales tax credit against the income tax. Although the sales tax collected on food and the credit were supposed to be roughly equal, today the exemption of food costs about $130 million.

1984 - LB 892 - Created the Economic Forecasting Advisory Board and set the sales tax rate at 3.5% and the income tax rate at 19% of federal liability.

1985 - LB 273 - Enacted a sales tax refund for new manufacturing equipment purchased for a plant expansion or relocation. There was to be no refund for replacing old equipment. The bill also terminated a renewable energy income tax credit effective Jan. 1, 1986.

LB 282 - Struck the requirement that the Legislature set the sales and income tax rates so as to generate similar amounts of money for the General Fund and the requirement that income tax rates be changed in increments of 1% and sales tax rates in increments of 0.5%.

LB 344 - Repealed Nebraska's participation in the Multistate Tax Compact.

1986 - LB 1124 - Enacted the Employment Expansion and Investment Incentive Act. This act grants incentives to businesses that increase employment by two employees and invest at least $75,000. The incentives are $1,500 for each new employee and $1,000 for each $75,000 in investment. In 2000, total credits claimed under the Act (as amended by LB 270 (1987)) were $4.5 million.

1987 - LB 773 - Decoupled Nebraska's individual income tax from federal income tax liability and coupled it to federal adjusted gross income instead. Prior to 1987, Nebraska individual income tax was calculated as a percentage of the federal tax. Since LB 773, Nebraska has its own standard deduction amount, personal exemptions, brackets and rates. The rates for the various brackets are calculated in relation to a base rate. The tax increase resulting from this conversion was about $20 million.

LB 775 - Enacted the Employment and Investment Growth Act. This grants income tax credits and sales tax refunds for companies that hire at least 30 new employees and invest at least $3 million. The income tax credits are equal to 5% of the increased payroll at the project for five years and 10% of the investment in the project. The benefits also include a refund of any sales taxes paid on equipment or other taxable property purchased in connection with the project. LB 775 also repealed the two-year-old sales tax refund for purchases of industrial machinery and equipment for plant expansions. For projects promising at least $10 million in new investment and 100 new employees, qualifying companies may also receive a 15 year personal property tax exemption for mainframe computers, certain aircraft, and agricultural processing equipment used in connection with the project. For 2000, the cost of the program is estimated to be between $30 to $150 million depending on the percentage of the jobs claimed that can be assumed to have been in the state regardless of the credit.

LB 775 also contains provisions allowing the exclusion of capital gains income from sales of the stock of the individual's employer obtained during employment. The cost of this benefit varies wildly from $2 million to $50 million per year.

1988 - LB 1234 - Increased the standard deduction under the income tax to be equal to the federal standard deduction. The net reduction was $11 million. The bill also amended LB 775 (1987) by providing that relocating a business within the state or transferring control of an existing business does not qualify for incentives under the act.

1989 - LB 739 - Lowered the income tax rate for two brackets, adopted an elderly and child care credit, and increased the personal exemption amount. The net reduction was $24 million.

1990 - LB 1059 increased the sales tax rate from 4% to 5% and the income tax rates by 8.5% for 1990 and an additional 8.5% for 1991 to fund the Tax Equity and Educational Support Act. This landmark school finance legislation dramatically increased state aid distributed to schools in an "equalized" manner. School costs were calculated per student within nine "tiers" or groups of similarly-sized schools and the formula enabled each school district to finance the average cost per student for the tier with a combination of state aid and property taxes at a defined "local effort rate". The rate varied based on the amount of appropriation available. LB 1059 also "rebated" 20% of the income tax paid by residents of the school district to the district. Total cost when fully implemented was about $210 million.

1992 - LB 1240 - Enacted the Enterprise Zone Act. This act grants larger investment tax credits under the Employment Expansion and Investment Incentive Act for projects located in five designated areas in the state. Jobs credits available under the act are also larger if the project employs residents of the enterprise zone.

1993 - LB 240 - Increased individual income taxes on high income individuals by changing brackets and rates, replacing the personal exemption with a personal credit, and phasing out itemized deductions, the standard deduction, and the benefit of lower brackets. Taxes on lower income individuals were reduced making the proposal revenue neutral, but the income tax system became more progressive.

1995 - LB 300 - Amended the phase-out of itemized deductions provided for in LB 240 (1993) so that charitable deductions are not phased out.

LB 829 - Adopted the Quality Jobs Act. This act allows companies that promise to increase employment and investment by either (1) $50 million in investment and 500 new jobs, or (2) $100 million in investment and 250 new jobs to retain the withholding of employees up to 5% of the increased payroll, such withholding to be spent on employee benefit programs. The act terminated in 2000.

1996 - LB 1368 - Amended the Quality Jobs Act by providing for an alternate method for claiming the wage benefit credit allowed by the act. The alternative is a sliding scale corporate income tax credit depending on the average wage of the new jobs.

1997 - LB 401 - Reduced income tax rates 4.4%, and increased the personal exemption by $10 for two years. The reduced revenue was about $75 million annually.

1998 - LB 1028 - Made the LB 401 income tax reductions permanent.

1999 - LB 630 - Adopted the Beginning Farmer Tax Credit to incent established farmers to enter into lease agreements with beginning farmers, that is those with limited assets. The credit is to be equal to 5% of the rental amount.

2000 - LB 936 - Enacted the Rural Economic Opportunities Act. The act provides credits against income tax for businesses that (1) increase employment by at least 0.5% of the labor force in the county and pay at least 125% of the average wage in the county or 100% of the average wage in the region and (2) invest an amount of at least $50,000 times the required number of new employees if the county has a population of 300 or less or $100,000 times the required number of new employees in large counties. The credits are 5% of the increased payroll at the project and 10% of the investment.

2001 - LB 433 - Granted an income tax credit to businesses equal to 30% of the subsidized costs of providing child care services to its employees. The credit is generally available for three years and cannot exceed 50% of the firm's tax liability. The special session of 2001 delayed the operative date of the tax credit until taxable year 2003.

LB 620 - Adopted the Invest Nebraska Act to replace the expired Quality Jobs Act. Essentially, the benefits are like the Quality Jobs Act provisions that grant a sliding scale credit of 3% of the increased payroll at the project to 5% based on the average wage at the project. This credit may be taken against the withholding obligation of the employer. There is also a smaller qualification threshold of $10 million in investment and 25 new employees in counties with a population of 100,000 or less. In this level of qualification, the jobs must pay at least the average annual wage in the state. For those companies qualifying with the old Quality Jobs Act thresholds, the jobs must pay at least 110% of the state's average wage. Finally, a "super tier" level of qualification is provided for companies promising to invest at least $200 million and employ at least 500 new employees at a wage of at least 120% of the state's average wage. Such qualifiers receive either the wage benefit credit allowed the other qualifiers or a 15% investment credit.

2002 - LB 1085 - Enacted a number of temporary tax increases and a permanent expansion of the sales tax base as follows: (1) Increases the cigarette tax by 30 cents per pack and the tobacco products tax by one-third for two years only, beginning Oct. 1, 2002. The proceeds are to be deposited mostly in the Cash Reserve Fund, (2) Increases the sales tax rate from 5% to 5.5% for one year only, beginning Oct. 1, 2002, (3) increases individual income tax rates by an average of 2.2% for tax year 2003 only, (4) Expands the sales tax base to include services such and building cleaning and maintenance, pest control, motor vehicle services, and installation labor beginning Oct. 1, 2002. The bill also repealed the previously-existing exemptions for refractory brick and subscription magazines, and (5) Requires companies taking advantage of bonus depreciation allowed by recent federal changes to add back 85% of such depreciation for purposes of the Nebraska return. The bonus depreciation lost can be deducted over five years beginning in 2005. Total revenue from LB 1085 is expected to be $120 million to the General Fund and $30 million to the Cash Reserve Fund.

2003 - LB 596 - This bill requires that taxpayers add back to federal adjusted gross income or for corporations, federal taxable income, the amount of any additional bonus depreciation or any section 179 capital expensing that is in excess of $25,000 that is allowed because of the federal Jobs and Growth Tax Act of 2003. It also placed the 2003 federal standard deduction amounts in the Nebraska statute and provided that they be adjusted for inflation in future years.

LB 759 - LB 759 retained the income tax rates adopted the previous year instead of allowing the rates to decrease to the 2002 level after tax year 2003. It also retained the cigarette and tobacco products tax increase indefinitely, with the proceeds of the cigarette tax after Oct. 1, 2004 to be deposited in the General Fund. The bill also increased beer and liquor taxes by about 25%, effective Oct. 1, 2003.

The bill expanded the sales tax base to include repair labor, except for motor vehicle and farm machinery repair, RV park charges, newspaper advertising supplements, animal specialty services, except veterinary services and services to livestock, and detective services. The bill also subjected some repair or maintenance of personal property to the sales tax. Finally, the bill provided that all annexation labor, and labor for repairs to real estate be taxable, with many exemptions.

LB 759 was expected to generate $347 million for the biennium, or $236 million annually.

2005 - LB 28 - Created a new tax credit for planned contributions into certain trusts or direct contributions made by corporations. A resident individual or a pass-through entity is allowed an income tax credit equal to 30% of the present value of a planned gift in the year the planned gift is made to a trust for the benefit of a 501(c)(3) organization, not to exceed tax liability or $10,000.

For a C-corporation, the credit is 20% of a direct contribution to the 501(c)(3) organization, limited to $10,000. Individuals, pass-through entities and corporations may not receive a credit for any contribution that was deducted for income tax purposes. An individual contribution may be a planned gift, but a corporate contribution must be an actual gift to the foundation to be eligible for the credit.

2006 – LB 968 – This bill reduced the assessment ratio for agricultural land from 80% of actual value to 75%, expanded the availability of the homestead exemption and made permanent the increase in the levy limit for schools from $1.00 per $100 of taxable value to $1.05. It also enacted an exception from the sales tax on construction labor for construction services performed on a single-family dwelling or duplex.

On the income tax side, the bill increased income tax brackets by about $1,000, granted a refundable earned income tax credit equal to 8% of the federal credit, and terminated the add-back of bonus depreciation or excess section 179 capital expensing beginning with the 2006 tax year.

LB 968 also terminated the phase-outs of the standard deduction, itemized deductions, and personal exemption credits for high-income taxpayers, also effective beginning with the 2006 tax year.

LB 990 – Increased the tax credits available under the Beginning Farmer Tax Credit Act to 10% of the cash rental amount or 15% of the cash equivalent amount of the share rental amount. The bill also created a refundable credit for the beginning farmer equal to the entire cost of a financial management program, up to $500.

2007 - LB 338 – Doubled the amount that may be excluded for Nebraska income tax purposes for contributions to a Nebraska educational savings plan trust account. For a married filing separately return, the maximum amount deducted was increased from $500 to $2,500 and for all other taxpayers from $1,000 to $5,000.

LB 343 - Enacted an income tax credit equal to thirty percent of any investment in a biodiesel facility prior to Jan. 1, 2015. The maximum credit that may be allowed is $250,000 and no more than 10% of the credit may be taken each of the first two years the facility produces B100 biodiesel and no more than 50% in the third year. The credit is limited to no more than half of the taxpayer’s liability. It may be carried forward up to 15 years.

The bill also expanded the exclusion of capital gains from the sale of the stock of the taxpayer’s employer to include extraordinary dividends. “Extraordinary dividends” were defined as any dividend exceeding 20% of the value of the stock at the time the dividend is declared.

LB 367 - A multi-faceted tax cut proposal involving sales taxes, income taxes, property taxes and estate taxes.

Regarding the income tax, the bill eliminated the so-called “marriage penalty” by increasing the married, filing joint brackets so that they are double the current single return levels. Head of household brackets were also increased proportionately. LB 367 also increased the current standard deduction in the statute to the federal level and provided for indexing like the federal indexing.

The bill also repealed the Business Child Care Expense Credit for businesses providing subsidized child care. This credit was first authorized in 2001, but has been delayed several times and would have become operative in 2007. Finally, LB 367 increased the earned income tax credit from 8% of the federal credit to 10%. All of these changes are effective for tax year 2007 and future years.