Not all Property Taxes are Equal
Why did the Governor waive the late fees on personal property taxes? No, personal property is not the same as the property tax you pay on your house. Real property is stationary and includes land, buildings, improvements, fixtures, mobile homes, minerals, and wells. Nebraska also taxes another type of property, known as tangible personal property. This is paid primarily by businesses.
In 2016, personal property accounted for 5.6 percent of total property taxes levied in Nebraska. Of that amount, commercial personal property was the largest category at 53 percent, and agricultural personal property was the second largest category at 26 percent. Public Service Commission personal property was the third highest and accounted for 15 percent of total personal property taxes levied statewide. Finally, railroad personal property made up the remaining 6 percent.
Eight states do not levy a personal property tax (Delaware, Hawaii, Illinois, Iowa, New Hampshire, New York, Ohio, and Pennsylvania) and four additional states (Minnesota, New Jersey, North Dakota, and South Dakota) tax very little. However, many states have recognized the detrimental nature of this tax and have enacted significant exemptions, making the impact of the tax vary greatly amongst states. When looking at a regional snapshot, six Midwestern states—Iowa, Illinois, Minnesota, North Dakota, Ohio, and South Dakota— currently exempt all or nearly all personal property from taxation, while others, like Indiana and Michigan, have recently adopted reforms to reduce their personal property tax burdens.
This tax is very detrimental to our state’s business community, so allowing some flexibility on the payment of this tax is helpful in recovering from the COVID crisis. However, what would be even better is if this tax was eliminated completely – but that is an argument for another day.
Read the Platte Institute’s study on Tangible Personal Property tax here: