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2017 Nebraska Legislative Changes
Nebraska Department of Revenue

July 6, 2017

Income Tax | Sales and Use Tax | Tax Incentives 
Lottery/Charitable Gaming/Athletic Commission | Property Assessment | Miscellaneous

Click here for Other Years' Major Legislative Changes
Income Tax

Affordable Housing Tax Credit Modified and Clarified  (LB 217 – Operative August 24, 2017)

LB 217 makes the following changes to the Affordable Housing Tax Credit:

(1) If an affordable housing project is placed in service during the tax year, resulting in a reduction in the credit in the first credit period, the remainder of the first year credit amount may be taken in the seventh credit period in the manner described in 26 U.S.C. § 42(f)(2);

(2) Credits may be allocated to the owners only in situations where the applicant is a pass-through entity, such as an S corporation or limited liability company;

(3) Persons holding affordable housing tax credits must notify the Nebraska Department of Revenue (Department) when they transfer, sell, or assign the credits at least 30 days before the new owner claims the tax credits;

(4) Any transferor must provide the Department with the tax ID number of the transferee; and

(5) Any credits that are recaptured increase the tax liability of the taxpayer in the year of recapture by the amount of credit recaptured.

Credit for Employing a Parent or Relative of a Family that Received Temporary Assistance for Needy Families (TANF) Clarified  (LB 217 – Operative August 24, 2017)

LB 217 clarifies that the family member must be a caretaker relative for a family unit that received TANF and must become employed during the taxable year for which the credit is claimed.

Filing Deadlines for Forms W-3N Changed  (LB 217 – Operative August 24, 2017)

LB 217 changes the filing deadline for filing Forms W-3N and all related wage and income statements with the Department from February 1 to January 31, to match the federal filing deadline.

Clerical Error Correction  (LB 217 – Operative August 24, 2017)

LB 217 modifies the language regarding error correction by the Department on an income tax return, to specifically include both clerical and mathematical errors. This is the same language that the IRC contains with regard to the federal income tax. “Mathematical or clerical error” includes information that does not match information provided to the IRS or the Department, such as income tax withholding amounts.

Notify the Legislature of Changes to the Internal Revenue Code with a Large Fiscal Impact on Nebraska  (LB 217 – Operative April 28, 2017)

LB 217 requires the Department of Revenue to issue a report to the Governor and the Legislature within 60 days after a change in the Internal Revenue Code (IRC) that details the changes to the IRC and the impact of the changes on state income tax revenue and on various classes and types of taxpayers. This requirement does not apply if the impact on state income tax revenue in the calendar year of enactment is less than $5 million.

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Sales and Use Taxes

Exemption for Political Events Limited (LB 63 – Operative October 1, 2017)

LB 63 limits the sales and use tax exemption for political events held by ballot question committees, candidate committees, independent committees, and political party committees to the fees and admissions to these political events.

Low-Income Home Energy Conservation Act Repealed  (LB 217 – Operative August 24, 2017)

LB 217 repeals the Low-Income Home Energy Conservation Act.

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Tax Incentives

Distressed Areas Requirement Stricken from Incentive Programs  (LB 217 – Operative August 24, 2017)

LB 217 amends the Nebraska Advantage Microenterprise Tax Credit Act to remove references to “distressed areas.” Previously, projects receiving an allocation under this Act were required to be in a distressed area. The previous definition was that the area is a municipality, county, unincorporated area within a county, or census tract that has an unemployment rate greater than the state average, per capita income under the state average, or a population decrease, so nearly all areas of the state qualified.

LB 217 also amends the Angel Investment Tax Credit Act to strike this same definition of “distressed area” and to strike references to distressed areas in that Act. Previously, investment in qualified small businesses in distressed areas qualified for a 40% refundable tax credit instead of 35%. Under LB 217, all investments in qualified small businesses are eligible for a 40% refundable credit. Finally, information about the qualified small business is no longer confidential, although information about the investor remains confidential.

Eligibility for Property Tax Exemptions Clarified  (LB 217 – Operative August 24, 2017)

LB 217 clarifies that personal property is eligible for exemption under the Nebraska Advantage Act when placed in service after the application date, rather than when it is acquired.

Carryover Period for Tier 6 Projects Extended (LB 161 – Operative for all applications)

LB 161 extends the carryover period for a Tier 6 Nebraska Advantage Act project from one year past the end of entitlement to16 years past the end of the entitlement period.

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Lottery/Charitable Gaming

Requirement for Local Authorization Repealed  (LB 217 – Operative August 24, 2017)

LB 217 repeals the requirement that nonprofits wishing to run a lottery or raffle in certain counties or cities must have specific authorization of the city or county by ordinance or resolution.

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Property Assessment

See the Property Assessment Division 2017 Legislative Summary document.

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Regulation Process Clarified (LB 209 – Operative August 24, 2017)

LB 209 amends the Nebraska Administrative Procedures Act to provide that, within the subsection defining “rule or regulation,” any standard affecting private rights or private interests, or procedures is presumed to be relied upon to bind the public.

Regulation Process Made Electronic  (LB 464 – Operative May 11, 2017)

LB 464 requires that regulation hearing notices and draft copies of proposed regulations be provided to the Secretary of State for posting on his or her website.

Performance Audits of Tax Incentive Programs Modified  (LB 210 – Operative August 24, 2017)

LB 210 allows the Legislative Auditor to provide the report on performance audits of tax incentive programs only to the Tax Commissioner up to five days prior to providing it to the Performance Audit Committee and Legislative Fiscal Office. This change is to protect taxpayer confidentiality.

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