A tax expenditure is defined by statute as a revenue reduction that occurs in the tax base of the state or a political subdivision as a result of an exemption, deduction, exclusion, tax deferral, credit, or preferential rate introduced into the tax structure. The tax expenditures included here are those in effect on July 1, 1998. The report and summary include all tax programs which generate state or local revenue annually in excess of $2 million.

During the next legislative session, the Governor's office, the State Tax Commissioner, and the Legislature may be recommending elimination or change in some of the tax expenditures noted. Recommendations regarding the tax expenditures need not be limited to those appearing in this document.

We wish to acknowledge the cooperation and the contribution of the following state agencies: Department of Insurance, Department of Motor Vehicles, Liquor Control Commission, and the Secretary of State.

If, after reviewing this report, you have any questions concerning its content or any related area, please feel free to contact the Research Division, Nebraska Department of Revenue, at (402) 471-5699.