LINCOLN — Following the departure of term-limited state Sen. Rob Clements of Elmwood, Sen. Robert Hallstrom of Syracuse is set to take over the fight to repeal Nebraska’s inheritance tax in the Legislature.
Conservative think tank the Platte Institute released a report Wednesday detailing its latest arguments for repealing the inheritance tax. Spokesman Ryan Kopsa said the group’s members are working with Hallstrom on legislation for an upcoming session.
Such legislation is not new to Hallstrom, as he introduced a constitutional amendment in 2025 to bring the question of repealing Nebraska’s inheritance tax to voters. The measure advanced out of committee but never saw floor debate.
During Clements’ exit from the Legislature, Hallstrom said, he recommended him to take up the mantle in presenting legislation to repeal or restrict the inheritance tax. Hallstrom’sand Clements’ views on the issue align, as Hallstrom called the tax “a vestige of the past” and noted most states have moved away from the tax.
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Nebraska is one of five states with an inheritance tax, and Hallstrom said Nebraska is the only state where counties collect the tax and not the state.
Currently, Nebraska imposes a 1% inheritance tax on children, parents and siblings for inheritances exceeding $100,000. Higher tax rates are charged to more distant relatives: 11% for aunts and uncles, nieces and nephews after a $40,000 exemption. Nonrelatives have to pay 15% after a $25,000 exemption.
Hallstrom argued it is unfair to tax distant relatives at a higher rate. He said overall the system is effectively a double tax as most items that are inherited — whether money, property or other valuables — have already been taxed.
“We extract one last pound of flesh with an inheritance tax after they’ve passed away,” Hallstrom said.
Hallstrom said he is currently debating whether he should introduce another constitutional amendment to put the issue on the ballot, or if he should take the direct route and introduce a bill in the Legislature. While he believes there is growing public support for repealing the inheritance tax, he said the outcome of the 2026 general election will influence the probability of the measure’s success in the next two sessions.
Clements pushed to eliminate Nebraska’s inheritance tax for all 10 years he served in the Legislature, but he was consistently met with opposition from counties. County commissioners frequently argued that repealing the tax would be detrimental to their budgets.
The Platte Institute’s report by senior tax adviser Jared Walczak pushed back on this argument, writing that annual inheritance tax collections fluctuate wildly enough that they are not a reliable revenue source for county budgets. According to the report, 73 of Nebraska’s 93 counties saw a year-over-year swing of 50% or more in inheritance tax collections over the past two years.
Hallstrom said he believes resistance will continue in future sessions, particularly from Nebraska’s most populous counties — Douglas, Lancaster and Sarpy. He said county commissioners he’s spoken with during the interim have expressed a desire for revenue replacements.
Suggestions for revenue replacements have floated in the Legislature in recent years, but lawmakers have struggled to reach consensus. Walczak said the Platte Institute is not interested in proposing replacement revenue sources, but Hallstrom said he is looking into some mechanisms. One he mentioned was creating savings by eliminating some of the state’s unfunded mandates on counties.
This story is provided by States Newsroom, a nonprofit state news network and Blox Digital content partner.
