Nebraska State Constitution Article VIII-2

Article VIII-2


Exemption of property from taxation; classification.

Notwithstanding Article I, section 16, Article III, section 18, or Article VIII, section 1 or 4, of this Constitution or any other provision of this Constitution to the contrary: (1) The property of the state and its governmental subdivisions shall constitute a separate class of property and shall be exempt from taxation to the extent such property is used by the state or governmental subdivision for public purposes authorized to the state or governmental subdivision by this Constitution or the Legislature. To the extent such property is not used for the authorized public purposes, the Legislature may classify such property, exempt such classes, and impose or authorize some or all of such property to be subject to property taxes or payments in lieu of property taxes except as provided by law; (2) the Legislature by general law may classify and exempt from taxation property owned by and used exclusively for agricultural and horticultural societies and property owned and used exclusively for educational, religious, charitable, or cemetery purposes, when such property is not owned or used for financial gain or profit to either the owner or user; (3) household goods and personal effects, as defined by law, may be exempted from taxation in whole or in part, as may be provided by general law, and the Legislature may prescribe a formula for the determination of value of household goods and personal effects; (4) the Legislature by general law may provide that the increased value of land by reason of shade or ornamental trees planted along the highway shall not be taken into account in the assessment of such land; (5) the Legislature, by general law and upon any terms, conditions, and restrictions it prescribes, may provide that the increased value of real property resulting from improvements designed primarily for energy conservation may be exempt from taxation; (6) the value of a home substantially contributed by the United States Department of Veterans Affairs for a paraplegic veteran or multiple amputee shall be exempt from taxation during the life of such veteran or until the death or remarriage of his or her surviving spouse; (7) the Legislature may exempt from an intangible property tax life insurance and life insurance annuity contracts and any payment connected therewith and any right to pension or retirement payments; (8) the Legislature may exempt inventory from taxation; (9) the Legislature may define and classify personal property in such manner as it sees fit, whether by type, use, user, or owner, and may exempt any such class or classes of property from taxation if such exemption is reasonable or may exempt all personal property from taxation; (10) no property shall be exempt from taxation except as permitted by or as provided in this Constitution; (11) the Legislature may by general law provide that a portion of the value of any residence actually occupied as a homestead by any classification of owners as determined by the Legislature shall be exempt from taxation; and (12) the Legislature may by general law, and upon any terms, conditions, and restrictions it prescribes, provide that the increased value of real property resulting from improvements designed primarily for the purpose of renovating, rehabilitating, or preserving historically significant real property may be, in whole or in part, exempt from taxation.


  • Neb. Const. art. IX, sec. 2 (1875);
  • Amended 1920, Constitutional Convention, 1919-1920, No. 27;
  • Transferred by Constitutional Convention, 1919-1920, art. VIII, sec. 2;
  • Amended 1954, Laws 1954, Sixty-sixth Extraordinary Session, c. 4, sec. 1, p. 63;
  • Amended 1964, Laws 1963, c. 300, sec. 1, p. 890;
  • Amended 1966, Laws 1965, c. 303, sec. 1, p. 854;
  • Amended 1968, Laws 1967, c. 318, sec. 1, p. 850;
  • Amended 1970, Laws 1969, c. 425, sec. 1, p. 1443;
  • Amended 1980, Laws 1980, LB 740, sec. 1;
  • Amended 1992, Laws 1992, LR 219CA, sec. 1;
  • Amended 1998, Laws 1998, LR 45CA, sec. 3;
  • Amended 2004, Laws 2003, LR 2CA, sec. 1.


1. Governmental subdivision property

2. Educational property

3. Religious or charitable purposes

4. Household goods and personal effects

5. Miscellaneous

1. Governmental subdivision property

This provision must defer to article VIII, section 11, and its limitation on the Legislature’s ability to tax the public property of political subdivisions governed by article VIII, section 11. Conroy v. Keith Cty. Bd. of Equal., 288 Neb. 196, 846 N.W.2d 634 (2014).

The statutes governing airports were not expressly or impliedly repealed by the passage of the 1998 constitutional amendment to this provision or subsection (1)(a) of section 77-202. Airports owned and operated by municipalities are exempt from taxation. City of York v. York Cty. Bd. of Equal., 266 Neb. 297, 664 N.W.2d 445 (2003).

Real property acquired by the city through enforcement of special assessment liens and offered for sale to the public at a price which does not exceed the delinquent special assessments and accrued interest is property that is used for a public purpose, and is therefore exempt from real estate taxation. City of Alliance v. Box Butte Cty. Bd. of Equal., 265 Neb. 262, 656 N.W.2d 439 (2003).

Under facts in this case improvements on Missouri River port and terminal area held to be owned by City of Omaha and not taxable. Sioux City & New Orleans Barge Lines, Inc. v. Board of Equalization, 186 Neb. 690, 185 N.W.2d 866 (1971).

Taxing open accounts due from school district is not a tax upon a governmental subdivision of the state. Stephenson School Supply Co. v. County of Lancaster, 172 Neb. 453, 110 N.W.2d 41 (1961).

Public corporation is not subject to taxation outside of scope of prohibition of this section unless power to tax is expressly conferred by Legislature. Consumers Public Power Dist. v. City of Lincoln, 168 Neb. 183, 95 N.W.2d 357 (1959).

A public power district is a governmental subdivision of the state. United Community Services v. Omaha Nat. Bank, 162 Neb. 786, 77 N.W.2d 576 (1956).

Leasehold of housing corporation was not exempt from taxation. Offutt Housing Co. v. County of Sarpy, 160 Neb. 320, 70 N.W.2d 382 (1955).

Where school district acquired title to land before date taxes were levied, land was exempt from taxation. Madison County v. School Dist. No. 2 of Madison County, 148 Neb. 218, 27 N.W.2d 172 (1947).

Rightful ownership of property by a governmental subdivision is all that is required or necessary to extend to such property complete exemption and immunity from assessment and taxation. Platte Valley Public Power & Irr. Dist. v. County of Lincoln, 144 Neb. 584, 14 N.W.2d 202 (1944).

Dredge used by contractors in excavation of reservoir for public power and irrigation district, under conditional sale contract whereby contractors eventually become the owners, was not exempt from taxation. Minneapolis Dredging Co. v. Reikat, 141 Neb. 470, 3 N.W.2d 889 (1942).

Housing authority created by statute for slum clearance is a governmental subdivision and, as such, is exempt from taxation. Lennox v. Housing Authority of City of Omaha, 137 Neb. 582, 290 N.W. 451 (1940).

Nebraska State Board of Agriculture is not a governmental agency and its property is not exempt from taxation as such. Crete Mills v. Nebraska State Board of Agriculture, 132 Neb. 244, 271 N.W. 684 (1937).

Tax on shares of stock of bank was required to be paid, even though bank was insolvent and in hands of receiver. Farmers State Bank of Belden v. Nelson, 116 Neb. 541, 218 N.W. 393 (1928).

City warrants are exempt as property or instrumentality of government of subdivision of state, though owned by private citizen. Droll v. Furnas County, 108 Neb. 85, 187 N.W. 876 (1922).

Municipal water plant which supplies water to inhabitants of city is exempt from general state and county taxes. City of Omaha v. Douglas County, 96 Neb. 865, 148 N.W. 938 (1914).

Municipal or other public property is not exempt from assessments for local improvements. Herman v. City of Omaha, 75 Neb. 489, 106 N.W. 593 (1906).

2. Educational property

Houses used by college for rental to faculty members were not exempt from taxation. Doane College v. County of Saline, 173 Neb. 8, 112 N.W.2d 248 (1961).

Property of college fraternity was not exempt from taxation. Iota Benefit Assn. v. County of Douglas, 165 Neb. 330, 85 N.W.2d 726 (1957).

Farm and dairy property used by college for school purposes was not taxable. Central Union Conference Assn. of College View v. Lancaster County, 109 Neb. 106, 189 N.W. 982 (1922).

Business colleges, in which common school education is given, are entitled to exemption of that portion of their property so used. Rohrbough v. Douglas County, 76 Neb. 679, 107 N.W. 1000 (1906).

3. Religious or charitable purposes

This section, providing for tax exemption of certain property, is not self-executing, but requires action by the Legislature to carry such constitutional provision into effect. Indian Hills Comm. Ch. v. County Bd. of Equal., 226 Neb. 510, 412 N.W.2d 459 (1987).

Where a nursing home's association with two other companies did not result in financial gain or profit to either the owner or user, and the primary or dominant use of the nursing home continued to be for religious or charitable purposes, the property remains exempt from taxation. Bethesda Foundation v. County of Saunders, 200 Neb. 574, 264 N.W.2d 664 (1978).

A home for retired teachers under the facts in this case held not to be exempt from taxation. OEA Senior Citizens, Inc. v. County of Douglas, 186 Neb. 593, 185 N.W.2d 464 (1971).

Property owned and used exclusively for religious or charitable purposes and not owned or used for financial gain or profit is exempt from taxation. Christian Retirement Homes, Inc. v. Board of Equalization, 186 Neb. 11, 180 N.W.2d 136 (1970).

Property of rest home was exempt from taxation under this section. Evangelical Lutheran Good Samaritan Soc. v. County Board of Gage County, 181 Neb. 831, 151 N.W.2d 446 (1967).

Legislature is empowered to exempt from taxation property owned and used exclusively for religious and charitable purposes. Young Women's Christian Assn. v. City of Lincoln, 177 Neb. 136, 128 N.W. 2d 600 (1964).

Property owned and used primarily for furnishing of low-rent housing is not exempt as being owned and used exclusively for charitable purposes. County of Douglas v. OEA Senior Citizens, Inc., 172 Neb. 696, 111 N.W.2d 719 (1961).

Property of religious institution where used exclusively for religious and educational purposes was exempt from taxation. Nebraska Conf. Assn. Seventh Day Adventists v. County of Hall, 166 Neb. 588, 90 N.W.2d 50 (1958).

Property of hospital owned and used exclusively for charitable purposes is exempt. Muller v. Nebraska Methodist Hospital, 160 Neb. 279, 70 N.W.2d 86 (1955).

Property used exclusively for charitable purposes was exempt from assessment for street improvements. Hanson v. City of Omaha, 154 Neb. 72, 46 N.W.2d 896 (1951).

A tax on exempt property is void and where it is levied on property as a whole, part of which is exempt and part not, the assessment, if inseparable, is unauthorized and the whole tax is void. McDonald v. Masonic Temple Craft, 135 Neb. 48, 280 N.W. 275 (1938).

The power of a city under Home Rule Charter to assess and levy taxes does not extend to property that is exempt from taxation by virtue of constitutional provision. East Lincoln Lodge No. 210, A.F. & A.M. v. City of Lincoln, 131 Neb. 379, 268 N.W. 91 (1936).

Where two lower floors of building owned by religious, charitable and educational institution were rented for commercial purposes and not exempt from taxation, but two upper floors were exempt, one half of taxable value of lot could be considered in determining total taxable value of property. Masonic Temple Craft v. Bd. of Equalization, Lincoln County, 129 Neb. 293, 261 N.W. 569 (1935).

Property used exclusively for lodge purposes by Masonic organization is exempt. Ancient & Accepted Scottish Rite v. Board of County Commissioners, 122 Neb. 586, 241 N.W. 93 (1932), overruling Scottish Rite Bldg. Co. v. Lancaster County, 106 Neb. 95, 182 N.W. 574 (1921), and Mt. Moriah Lodge, A.F. & A.M. v. Otoe County, 101 Neb. 274, 162 N.W. 639 (1917).

Laundry property owned by a charitable institution, used exclusively for charitable purposes, was exempt. House of the Good Shepherd v. Bd. of Equalization of Douglas County, 113 Neb. 489, 203 N.W. 632 (1925).

Hospital used exclusively for religious and charitable purposes is exempt. St. Elizabeth Hospital v. Lancaster County, 109 Neb. 104, 189 N.W. 981 (1922).

That part of Y.M.C.A. building actually and necessarily used for the general purposes of the association is exempt. Young Men's Christian Assn. of Lincoln v. Lancaster County, 106 Neb. 105, 182 N.W. 593 (1921).

Masonic home for care of old and enfeebled members was exempt from taxation. Plattsmouth Lodge, No. 6, A.F. & A.M. v. Cass County, 79 Neb. 463, 113 N.W. 167 (1907).

Abandoned church property is not exempt. Holthaus v. Adams County, 74 Neb. 861, 105 N.W. 632 (1905).

Property held with future intention to build thereon is not exempt. Y.M.C.A. of Omaha v. Douglas County, 60 Neb. 642, 83 N.W. 924 (1900).

Exemption of religious property is confined to church edifices and related property, and not to property to be so used in future. First Christian Church of Beatrice, NE v. City of Beatrice, 39 Neb. 432, 58 N.W. 166 (1894).

4. Household goods and personal effects

Household goods and personal effects as defined by law referred to extant law and fixtures are not included. State ex rel. Meyer v. Peters, 191 Neb. 330, 215 N.W.2d 520 (1974).

Provision exempting from taxation household goods of the value of $200 is a limitation upon the power to tax but does not exempt such property from sale for payment of taxes properly assessed on other property not exempt from execution. Ryder v. Livingston, 145 Neb. 862, 18 N.W.2d 507 (1945).

5. Miscellaneous

In determining the validity of exemptions enacted under this section, a court must consider (1) whether the exemptions improperly shift the property tax burden to the remaining tax base and (2) whether there is a substantial difference of situation or circumstance justifying differing legislation for the objects classified. Jaksha v. State, 241 Neb. 106, 486 N.W.2d 858 (1992).

Stahmer v. State, 192 Neb. 63, 218 N.W.2d 893 (1974), holding that this provision prevails over the uniformity requirement of Neb. Const. art. VIII, section 1, is overruled. MAPCO Ammonia Pipeline v. State Bd. of Equal., 238 Neb. 565, 471 N.W.2d 734 (1991).

Requiring registration of mobile homes and assessing a reasonable fee to defray cost of registration and inspection, if any, does not violate constitutional provision requiring uniform and proportionate taxation of personal property. Gates v. Howell, 204 Neb. 256, 282 N.W.2d 22 (1979).

The partial exemption from taxation of classes of property specified in section 77-202.25, is not unreasonable, objectionable as discriminatory, or violative hereof. Stahmer v. State, 192 Neb. 63, 218 N.W.2d 893 (1974).

The primary or dominant use of property is controlling in determining whether property is exempt from taxation. Lincoln Woman's Club v. City of Lincoln, 178 Neb. 357, 133 N.W.2d 455 (1965).

Tax on gross income of profit-sharing trust violated this section. First Continental Nat. Bank & Trust Co. v. Davis, 172 Neb. 118, 108 N.W.2d 638 (1961).

Construction of legislative act would not be adopted that would operate to exempt property from taxation. Omaha Nat. Bank v. Jensen, 157 Neb. 22, 58 N.W.2d 582 (1953).

Status of exempt property is determined by date of levy, rather than date of assessment. American Province of Servants of Mary Real Estate Corp. v. County of Douglas, 147 Neb. 485, 23 N.W.2d 714 (1946).

Legislature was not authorized to exempt intangible property having situs in this state from taxation. International Harvester Co. v. County of Douglas, 146 Neb. 555, 20 N.W.2d 620 (1945).

Legislature may exempt railroad company from payment of special assessments on benefits received. Hinman v. Temple, 133 Neb. 268, 274 N.W. 605 (1937).

Constitutional provision does not apply to gasoline tax. State v. Cheyenne County, 127 Neb. 619, 256 N.W. 67 (1934).

Parties to suit cannot stipulate as to law of case in taxation matters so as to bind the court. North Platte Lodge No. 985, B.P.O.E. v. Board of Equalization of Lincoln County, 125 Neb. 841, 252 N.W. 313 (1934).

The reason for exemption from taxation has no application to assessments for local improvements. Drainage District No. 1 of Richardson County v. Richardson County, 86 Neb. 355, 125 N.W. 796 (1910); Beatrice v. Brethren Church of Beatrice, 41 Neb. 358, 59 N.W. 932 (1894).

It is exclusive use of the property which determines its exemption character. Academy of the Sacred Heart v. Irey, 51 Neb. 755, 71 N.W. 752 (1897).

By the enabling act, federal government obligated state that no taxes should be imposed upon federal owned property. Leasehold interest of tenant on public land is not exempt. State ex rel. Sioux County v. Tucker, 38 Neb. 56, 56 N.W. 718 (1893).