Nebraska AG Addresses Constitutionality of Proposed Income Tax Credit

A proposed amendment to the Nebraska Constitution adding a refundable income tax credit would not:

– violate the Commerce Clause of the U.S. Constitution; or

– discriminate against non-resident Nebraska property taxpayers.

Proposed Amendment to the Nebraska Constitution Nebraska Constitution

The legislative resolution proposes to amend the Nebraska Constitution by adding an income tax credit for 35% of property taxes paid by the taxpayer during the tax year. The credit would be refundable and available for tax years after 2020.

Constitutionality of Proposed Amendment

As the Nebraska Attorney General notes, the proposed credit is available to all property taxpayers. This includes both resident and nonresident taxpayers, regardless of whether they are subject to Nebraska income tax. As such, it does not violate the Commerce Clause by discriminating against nonresidents or primarily out-of-state interests. Similarly, the credit does not discriminate against nonresident taxpayers in violation of the Privileges and Immunities Clause.

Opinion No. 18-004, Nebraska Attorney General, September 28, 2018, ¶201-316

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