A proposal to raise state’s sales tax to relieve ag property taxes

The Nebraska Farm Bureau Federation has put forth a proposal to raise the state’s sales tax by one percent and to broaden the base in order to generate funds for property tax relief for agricultural, residential, and commercial taxpayers. There are some voices outside of the agricultural community with a tendency to push back on paying additional sales tax for agricultural property tax relief, but it is important to remember the broader picture. Over the past five-six years, the agricultural property taxpayers have been subsiding the state operating budget, owing in large part to unprecedented increases in agricultural land values which drastically impacted the state TEEOSA aid formula. These changes brought down the burden on the state general fund budget. As a result, there has been a significant tax shift in the past few years from the state’s general fund onto the backs of local agricultural producers, to the tune of $133 million in 2015 alone. Agricultural land does not benefit from the property tax relief provided by a city sales tax that reduces real estate taxes within that city.

 

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