The Prohibition on Display of Nazi Symbols Bill, passed on Thursday night, makes it a crime to "knowingly display, by public act and without reasonable excuse, a Nazi symbol".

The maximum penalty for an individual will be $11,000, or imprisonment for 12 months, or both.

Exclusions will be the display of a swastika in connection with Buddhism or Hinduism and displays of Nazi symbols that are "done reasonably and in good faith" for academic, artistic, educational or public interest purposes.

An incident in Wagga in February 2020 involving a swastika flag being flown without permission from a light tower at Robertson Oval was referenced multiple times during debate on the bill this week.

Wagga MP Joe McGirr said part of the reason he supported the bill was that under the law in 2020, police would not have been able to prosecute the person who flew the Nazi flag.

"My interpretation is that now they will be liable to be prosecuted," Dr McGirr said.

"There are reasonable excuses allowed for if they are done in good faith. Obviously a presentation of a Nazi symbol in a textbook or in a classroom for the purposes of teaching people about the history of World War II or Nazism, is protected."

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Dr McGirr said there had been a "disturbing resurgence of extreme right and extreme left activity ... and I think this is timely" given Nazi symbols were used to target the Jewish, ethnic minority and LGBTI people.

Wagga-based Nationals MLC Wes Fang said he supported the ban as it protected free speech by using the existing legal concept of intimidation.

"While we are all advocates for free speech, it's pretty clear in any legislation we have at the moment that you have the right to say pretty much anything but you don't have the right to create fear in people and promote hatred," Mr Fang said.

Under the bill, the Attorney General must review how the exceptions to the Nazi symbol ban have been applied by the justice system.

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