Published On: Wed, Feb 1st, 2012

Senator defends her Inheritance Tax repeal bill

LINCOLN — A bill introduced by Sen. Abbie Cornett, Bellevue, has drawn criticism from county officials.
LB970 will terminate funds the counties have been receiving from an inheritance tax.
Cornett said she believes the move to do away with the inheritance tax would be good for the state’s economy.

The State quit taking their share of the inheritance tax a couple of years ago,  said Cornett.
The tax is known as the “death tax,” Cornett said in a telephone interview Jan. 27.

“There are only eight states left that have an inheritance tax – Nebraska is one of them,” Cornett said. “Because of the inheritance tax Nebraska receives a down-grade in national rankings for state friendliness. It is looked at when an effort is made to try and attract businesses and people to move to our state. We need to do better in the national rankings.”
LB970, which was introduced at the request of Gov. Dave Heineman, is a good economic move for Nebraska, according to Cornett.
If LB970 is passed, it will take affect in 2013.
County governments will drastically be affected by the loss of inheritance funds.
The inheritance tax funds are not part of the normal budgets in the smaller counties although the larger counties do include inheritance funds in their budgets by using an average of what has been received over a specific number of years.
“The smaller counties that have less population can never be sure on the inheritance amount they would receive – so it is used somewhat like a cash reserve,” Cornett said. “The larger counties do include an amount in their budgets as they can statistically come up with an amount of inheritance funds to use in the budget.”
Cornett has met with county officials concerning the bill and has been doing some research.
“We are working on ways to help the counties – it is part of an on-going study,” Cornett said. “It is part of the process of negotiations with the bill.”
An amendment would then be added to the bill she said.