January 13, 2015


State & Local Taxes in 2015


Nebraska Tax Code Features

Progressive Features

• Graduated personal income tax structure

• Provides a 10 percent refundable Earned Income Tax Credit (EITC)

• Provides an income tax credit for child and dependent care expenses (refundable for incomes under $29,000)

• Sales tax base excludes groceries

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Comparatively high reliance on property taxes

• Fails to provide a property tax “circuit breaker” credit for low-income taxpayers

Tax Changes Enacted in 2013 & 2014

• Personal income tax brackets indexed for inflation

• Increased social security income exemption

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Nebraska has the 28th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Ap­pendix B for state-by-state rankings and more details).

Click here for a PDF of this page