Nebraska lawmakers enacted Legislative Bill (LB) 838, which includes the core remittance reform provisions originally introduced in LB 1174. While LB 1174 began as a standalone proposal focused directly on taxing foreign money transfers, its most important provisions were ultimately folded into LB 838, allowing the Legislature to advance the policy through a broader bill that successfully reached the governor’s desk.
LB 1174, introduced by Sen. Kathleen Kauth, created a remittance transfer tax under the Nebraska Money Transmitters Act. The bill imposed a 2 percent excise tax on most remittance transfers and a 10 percent higher tax on transfers sent to residents of foreign adversary countries. Its stated purpose was simple: if large amounts of money are leaving Nebraska and the United States for foreign countries, the state should at minimum track and offset some of the economic damage that comes with that outflow.
Remittances are money earned in the United States and sent abroad to individuals, families, or businesses. While often framed as harmless family support, the scale of the issue is enormous. According to FAIR’s Remittance Study, in 2021 alone, more than $200 billion left the United States through remittances, while only about $7 billion entered the country from abroad. That is money no longer being spent in American communities, supporting local businesses, or generating tax revenue for public services.
As LB 1174 moved through committee, FAIR submitted a statement in support of the bill. Nebraska lawmakers chose to preserve its strongest immigration-related provisions by incorporating them into LB 838. The final enacted version included a 25 percent excise tax on remittance transfers sent to residents of foreign adversary countries, with exceptions for Cuba and Venezuela, along with reporting and enforcement mechanisms through licensed money transmitters. Gov. Jim Pillen signed LB 838 into law on April 14, 2026.
This matters because remittances are not just an economic issue, they are directly tied to illegal immigration incentives and transnational criminal activity. FAIR research shows that remittance systems are frequently exploited for cartel money laundering. In Mexico alone, an estimated $4.4 billion in remittances in 2022 were tied to drug trafficking proceeds. Large-scale outbound transfers also create a powerful incentive for illegal immigration by allowing earnings from unlawful or temporary employment to be quickly moved abroad.
By ensuring that foreign money transfers are taxed and monitored, Nebraska took a meaningful step toward protecting taxpayers, reducing incentives for illegal immigration, and restoring accountability to a system that too often allows American wages to finance foreign dependency or even criminal networks.
