Nebraska lawmakers pass tax cut for military retirees

August 12, 2020 GMT

LINCOLN, Neb. (AP) — Military retirees who live in Nebraska will get a tax cut starting in 2022 under a bill slated to become state law.

Lawmakers gave the measure final approval Wednesday and sent it to Gov. Pete Ricketts, who proposed it at the start of this year’s session. The bill would exempt half of a military retiree’s benefits from Nebraska state taxes.

Sen. Tom Brewer, who sponsored the bill, has said the measure would help Nebraska attract and retain military service members after they retire. Several neighboring states, including Iowa and Missouri, don’t impose any tax on military retirement benefits and both states have managed to entice retirees from Nebraska’s Offutt Air Force Base.


Brewer, a U.S. Army veteran from Gordon, introduced the bill last year but lawmakers ran out of time before they were able to debate it in 2019.

Lawmakers pushed back the effective date of the tax cut so that it won’t cost anything until the fiscal year that begins in July 2021. By 2024, it will cost about $14 million a year in lost revenue.

The legislation would affect more than 13,000 military retirees in Nebraska.

Ricketts identified the bill as one of his top legislative priorities this year, arguing that military retirees often move on to second careers that help stimulate their local economy and generate tax revenue.