LINCOLN- Those who inherit property in Nebraska would pay less in taxes under a bill given final approval Friday by the State Legislature.

Legislative Bill 310, introduced by State Sen. Robert Clements of Elmwood, would increase what is exempt from state inheritance taxes and reduce the rates paid by more distant relatives and nonrelatives.

The proposal was amended after Nebraska’s counties, which collect about $70 million a year in inheritance taxes, complained that they would be hurt by the senator’s original proposal, which would have made deeper cuts in the tax.

Only six states levy an inheritance tax, and Iowa will soon eliminate its inheritance tax. The changes passed by the Nebraska Legislature apply to estates of individuals who died on or after Jan. 1.

Under the amended LB 310, which Gov. Pete Ricketts is expected to sign into law:

Immediate relatives, such as children, would continue to pay a 1% inheritance tax, but the amount of property that is exempt rises from $40,000 to $100,000.

More remote relatives would pay an 11% tax, down from the current 13%, and get an exemption of $40,000, up from $15,000.

Nonrelatives who inherit property would pay a 15% tax, down from 18%, and their exemption would rise to $25,000 from the current $10,000.

Douglas County, the state’s largest county, estimated it would lose $2 million a year in revenue from inheritance taxes, according to a state legislative fiscal note. A survey of 14 counties, excluding Douglas and Lancaster Counties, estimated the average loss at $90,000 a year.

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