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Military retirees in Nebraska could get a break on state income taxes.

A bill introduced Jan. 11 by Army National Guard veteran and state Sen. Tom Brewer would exempt 50 percent of military retirement pay from the state income tax. The exemption would cover more than 13,000 veterans living in Nebraska that receive military retirement benefits and covers “periodic payments attributable to service in the uniformed services of the United States,” which would include members of the Coast Guard, the NOAA Commissioned Officer Corps and the USPHS Commissioned Corps. Under the state's current policy, some retirees who served in the Nebraska National Guard or in another reserve component are excluded from this benefit.

Col. Dan Donovan, USAF (Ret), president of MOAA's Heartland of America Chapter, has led efforts to push the legislation through. He has previously testified before the state's revenue committee.

“It's beneficial to retired veterans and Nebraska,” Donovan said. By attracting and retaining military retirees to Nebraska, Donovan said the state's workforce would diversify and grow. Veterans bring specialized expertise and technological skills, he said.

The state would also benefit because married veterans would bring spouses to bolster the workforce, he said.

“This would enhance our state's ability to meet the growing need for technologically adept and motivated employees and entrepreneurs,” Donovan said. “These men and women are valuable assets to the Nebraska workforce.”

[RELATED: MOAA's Military State Tax Report Card]

Donovan said Nebraska is operating at a disadvantage because surrounding states already offer tax exemptions on military retirement pay. He said friends have left Nebraska for Texas and Iowa, enticed by those states' breaks on military income tax.

“This will go a long way,” Donovan said. “It will definitely help. It'll say, 'Nebraska's joined the team.'”

Nebraska Gov. Pete Ricketts said the exemption is a small way to give back to the state's veterans.

“Nebraska's veterans stepped up to serve our country, and we want to keep them in good life after they retire,” Ricketts said in a statement announcing the proposal.

The exemption plan would provide about $15 million annually in tax relief for military retirees, according to the statement.

Nebraska's efforts follow a similar endeavor in North Carolina, where MOAA chapters are leading a fight to exempt retirement pay of all government employees, including servicemembers, from state income tax.

The Equal Tax Treatment of Government Retirees bill is backed by several groups worked as a coalition called The 4th Branch. The bill is expected to be introduced during the state's next legislative session.

Amanda Dolasinski is MOAA's staff writer. She can be reached at amandad@moaa.org. Follow her on Twitter @AmandaMOAA.