It’s Time to Retire Nebraska’s Inheritance Tax

Nebraska is one of a shrinking number of states that still tax the transfer of property at death, and the only state to impose such a tax at the local level. Some states impose estate taxes, which fall on the decedent’s estate above some exclusion, typically of several million dollars. Nebraska is one of five states with an inheritance tax, which is levied on individual beneficiaries receiving property and has much lower exemption thresholds. 

When Nebraska’s inheritance tax was adopted in 1901,1 Nebraska had neither an income tax nor a sales tax. The tax, which encourages outmigration of retirees and can break up small businesses and family farms, is a relic of an earlier era. Most states have repealed their estate and inheritance taxes, and Nebraska is long overdue to do the same. 

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