Why we pay personal property taxes
When I was growing up at home, the County Assessor sent someone to the farm to check and assess all of the personal property. The tangibles and intangibles, everything you owned, was assessed and put on the tax roll. Cattle were counted and grain in the bin was measured.
The taxes on household personal property was eliminated in 1971, and on grain and livestock in 1980, all but the tax on the railroad property that ran through your County.
In 1988, after Federal District Court decisions, the railroads discovered that they were the only personal property owners that were being taxed on their property. The railroads decided that they were going to sue the State of Nebraska for 70 to 80 million dollars because Nebraska Law stated that all property was to be taxed equally.
The Nebraska Legislature promised they would forgive this tax obligation if all depreciated property was put on the tax rolls. After great public upheaval caused by Court decisions, the people of Nebraska adopted Amendment One in May 1992, and constitutionally separated the Uniformity Clause from the Classification and Exemption Clause in the Nebraska Constitution relative to the taxation of personal property. LB 1063 was put on the election ballot and was called Amendment One for voting purposes. LB 1063 reads in part as follows:
Depreciable tangible personal property shall mean tangible personal property which is purchased, which is used in a trade or business or used for the production of income, and which has a determinable life of longer than one year.
If a Constitutional Amendment amending Article VIII of the Constitution of Nebraska is adopted in 1992, tangible personal property which is not depreciable tangible personal property as defined in Section 48 of this act shall be exempt from property tax.
If a Constitutional Amendment amending Article VIII of the Constitution of Nebraska is adopted in 1992, tangible personal property not including motor vehicles registered for operation on the highways of this State, shall constitute a separate and distinct class of property for purposes of property taxation, shall be subject to taxation, unless expressly exempt from taxation, and shall be valued at its net book value.
Railroad rolling stock shall be exempt from the personal property tax. For purposes of this subsection, railroad rolling stock shall mean locomotives, freight cars, and other flanged-wheel equipment operated solely on rails and owned, leased, or used for or in railroad transportation.
The Nebraska Farm Bureau and the Nebraska Cattlemen organization ran ads on the radio and TV promoting this bill. The bill passed when voted on by the people and of course, the railroads dropped their threatened litigation. None of the local political subdivisions in the State of Nebraska received any compensation for relieving the State's liability.
After the first year of this law, the Nebraska Cattlemen's organization lobbied the legislature and purchased breeding stock was removed from this law. All other property on your deprecation schedule has to be turned in to your assessor by May 1 annually.
If you don't care for this law you can thank the Nebraska Farm Bureau and Nebraska Cattlemen's organization for promoting the law, or maybe your father or grandfather for voting for this law.
I know why you pay taxes every year on your personal property. It is not fair to the younger generation that are trying to get started in any business.
Remember when you pay your personal property tax every year that you or your grandparents probably voted for this tax. To my knowledge, we are the only State around here that pays this tax.
Talk to your State Senator about this.