Modernizing Nebraska’s Sales Tax Base to Secure Income and Property Tax Relief

As Nebraska competes for workers, entrepreneurs, investment, and new residents, policymakers have rightly made income tax rate reductions a priority. Meanwhile, addressing the state’s above-average local property tax burdens is a top priority for taxpayers and lawmakers alike. An eroding sales tax base makes income and property tax relief harder, while responsible sales tax modernization could help enable it. 

This policy brief outlines a range of options for broadening the sales tax base, with estimates of the additional revenue that each expansion would generate in FY 2028. Base broadening would generate additional revenue for both state and local governments. A responsible approach would dedicate state revenue to ensuring that Nebraska can afford its final scheduled income tax rate reduction in 2027 and paying for additional reforms. Lawmakers could also adopt provisions ensuring that additional local sales tax revenue offsets property tax rate reductions. 

Read and download the full report by clicking here.