No More Inheritance Tax in Nebraska?

In Nebraska, counties, not the state, collect inheritance tax. As a piece of a three-part plan to reduce taxes, Governor Dave Heineman has proposed to eliminate the inheritance tax. Counties protested collectively that eliminating the tax would cut off an important source of their revenue and lead to an increase in local property taxes. The Governor says that property taxes do not have to go up — counties can instead cut spending to offset the loss in funding.

An eight-member Revenue Committee has informally said that it would not support this elimination of the inheritance tax. One member of the committee points out that it does not make sense to eliminate a tax that affects a small percentage of the people and shift the burden to the property tax, which everyone has to pay. Two senators proposed alternative tax cuts including elimination of the state alternative minimum tax or reduction of inheritance taxes instead of complete elimination.

See Paul Hammel, Plan to Nix Inheritance Tax a No-Go, World-Herald, Feb. 14, 2012. 

Special thanks to Ronald R. Volkmer (Professor of Trusts and Estates, Creighton University School of Law) for bringing this article to my attention.