2010 Nebraska Legislative Changes
Income Tax
Wage and Tax Statements
Electronic Submission of Wage and Tax Statements (
LB 879 – Operative date: January 1, 2011)
For wage and tax statements (W-2, W-2G, 1099-R, and 1099-MISC) due after January 1, 2011, the Tax Commissioner shall require an employer or payor that issues more than 50 W-2s in a year to file the statements electronically. Currently, the Tax Commissioner requires an employer that issues more than 250 W-2s in a year to file such statements electronically.
Filing Deadline for Wage and Tax Statements ( LB 879 – Operative date: January 1, 2011)
For wage and tax statements (W-2, W-2G, W-3N, 1099-R, and 1099-MISC) due after January 1, 2011, all employers or payors must file them with the Tax Commissioner by February 1st (instead of March 15th).
Income Tax Refunds
Interest Payments on Income Tax Refunds ( LB 879 – Operative date: January 1, 2011)
On or after January 1, 2011, no interest will be paid on overpayments of income tax unless the return is electronically filed with the State of Nebraska. Previously, the State would pay interest on income tax refunds if the refund was not processed within 90 days.
Decisions on Protested Refund Claims ( LB 879 – Operative date: October 1, 2010)
The Tax Commissioner’s decision to disallow a claim for refund becomes final 30 days after the mailing of the notice denying the claim (instead of the current 60 days) unless the taxpayer seeks a judicial review of the decision within this time period.
Income Tax Withholding
Nonfilers of Withholding Tax ( LB 879 – Operative date: January 1, 2011)
If taxpayers fail to file their income tax withholding return(s) and the Nebraska Department of Revenue (Department) issues an assessment for the non-filed tax period(s), an additional penalty of ten percent will be assessed exclusive of any other penalties and interest, once the assessment becomes final.
Electronic Income Tax Payments
Electronic Funds Transfer (EFT) Threshold ( LB 879 – Operative date: January 1, 2011)
The Tax Commissioner may require the use of EFT for all payments of income tax exceeding $5,000 if the taxpayer had made income tax payments exceeding $5,000 in a prior tax year.
Electronic Funds Transfer (EFT) Penalty Eliminated for Certain Taxpayers ( LB 879 – Operative date: January 1, 2011)
All taxpayers are currently subject to a $100 penalty if they are required to make an EFT payment and fail to do so. The penalty will no longer apply to individual income tax payments.
Tax Incentives
Nebraska Advantage Act
Materials Purchased by Contractors ( LB 879 – Operative date: July 15, 2010)
For applications filed on or after July 15, 2010, the Department will assume that 50% of the contract price includes both building materials and equipment on which sales tax was due if the contract includes property annexed to real estate and property incorporated into real estate. For contracts solely for annexed property which is not incorporated into real estate, the contractor and subcontractors must provide the percentage of the contract price that represents the cost of materials. General contractors and all subcontractors must certify the percentage of the materials on which sales tax was paid. Taxpayers with applications prior to July 15, 2010 may make a one-time election to use the 50% estimate of materials.
For additional information on this provision or the election, please contact Mary Hugo at (402) 471-5790 or by e-mail: mary.hugo@nebraska.gov.
Cloud-Computing ( LB 918 – Operative date: July 15, 2010)
For applications filed on or after July 15, 2010, any business involved in the qualifying business activities of software development, computer systems design, product testing, guidance and surveillance systems design, or licensing of technology may include access to such services over the Internet when determining if at least 75% of such services, systems, or products are either sold to the federal government or to customers located outside of Nebraska. Previously, cloud computing services were not included in the 75% requirement.
Compensation Defined ( LB 918 – Operative date: July 15, 2010)
For applications filed on or after July 15, 2010, employees’ wages are defined to consist of any payments subject to the federal Medicare tax. Previously, compensation was defined as wages subject to withholding for federal income tax purposes.
Taxpayer Defined ( LB 918 – Operative date: July 15, 2010)
For applications filed on or after July 15, 2010, a taxpayer for purposes of the Nebraska Advantage Act does not include any partnership, limited liability company, cooperative, or joint venture where 20% or more is owned by political subdivisions or organizations described in 501(c) or (d) of the Internal Revenue Code (previously 10% or more).
Tier 2 Property Tax Exemption ( LB 918 – Operative date: July 15, 2010)
For applications filed on or after July 15, 2010, a taxpayer who meets the required levels of employment and investment for a Tier 2 project (30 new employees and $3 million investment) for an Internet web-portal or data center project is entitled to a personal property tax exemption on purchases of computer systems and peripherals used at the project.
Nebraska Advantage Transformational Tourism and Redevelopment Act ( LB 1018 – Operative date: July 15, 2010)
A municipality may authorize a refund of local option sales tax, subject to voter approval, for businesses developing or redeveloping tourism-related projects.
Local Civic, Cultural, and Convention Center Financing Act
( LB 789 – Operative date: July 15, 2010)
The total grant available for cities or municipalities to finance local civic and convention centers under the Local Civic, Cultural, and Convention Center Financing Act was increased based on the size of the city or municipality.
Sports Arena Facility Financing Assistance Act
( LB 779 – Operative date: July 1, 2010)
A city, village, or county may apply for state financial assistance to help acquire, construct, improve, or equip enclosed and temperature-controlled sports arenas with a permanent seating capacity of 3,000 to 7,000. The state assistance, or turnback, would include all state sales tax collected within the arena, on all ticket sales for events in the arena, and all or a part of state sales tax collected by retailers located within 600 yards of the eligible sports arena facility.
Property Assessment
Property Tax Exemption for Wind Energy Generation Facilities ( LB 1048 – Operative date: July 15, 2010)
Any personal property used directly in the generation of electricity using wind as the fuel source, such as wind turbines, rotors and blades, shall be exempt from property tax.
Implementation of Soil Surveys ( LB 877 – Operative date: April 14, 2010)
County assessors are to implement the soil surveys from the Natural Resources Conservation Service of the United States Department of Agriculture, as directed by the Property Tax Administrator.
Real Property Valuation Protests ( LB 877 – Operative date: April 14, 2010)
Real property valuation protests filed with the county board of equalization must now contain a description adequate to identify the parcel upon which the assessed valuation is being protested.
Homestead Exemption ( LB 877 – Operative date: April 14, 2010)
The Tax Commissioner is no longer limited to the income review under newly passed legislation and may now review homestead exemption applications for any information that is deemed necessary to determine whether an application is in compliance with the homestead exemption statutes.
Property Tax Exemption Application Deadline ( LB 708 – Operative date: January 1, 2011)
Educational, religious, and charitable organizations that acquire or convert taxable property to exempt use after January 1, now have until July 1 (instead of August 1), to make application for an exemption on real and personal property.
Special Valuations for Agricultural or Horticultural Land ( LB 806 – Operative date: July 15, 2010)
Sales of agricultural or horticultural land to political subdivisions, the State of Nebraska, and any other ownership that would make it exempt from property tax are removed as disqualifiers for receiving the agricultural or horticultural land special valuation.
Termination of Delinquency Notices on Leased Lands ( LB 873 – Operative date: July 15, 2010)
County treasurers will no longer be issuing delinquency notices to the owners of improvements on leased lands upon which the property taxes have become delinquent.
Appeal of Tax Equalization and Review Commission Decisions ( LB 877 – Operative date: April 14, 2010)
Besides the county assessor, the Tax Commissioner and the Property Tax Administrator can appeal the county board of equalization's final decision approving or denying an exemption of real or personal property to the Tax Equalization and Review Commission.
Tax Equalization and Review Commission
Notice of Final Decisions ( LB 877 – Operative date: April 14, 2010)
The Tax Equalization and Review Commission is required, within seven days of issuing a decision and order, to publish the decision and order on a website maintained by the Commission which is accessible by the general public.
Appeal of County Board of Equalization Decisions ( LB 877 – Operative date: April 14, 2010)
The Tax Equalization and Review Commission may now hear appeals by the Tax Commissioner or Property Tax Administrator concerning a final decision of a county board of equalization relating to the exemption of real or personal property from property taxes.
Miscellaneous
E-file
Mandatory Electronic Filing System ( LB 879 – Operative date: January 1, 2011)
The Nebraska Legislature has expressed its intent to have the Tax Commissioner implement a mandatory electronic filing system for all state tax programs and payments as soon as practicable for the efficient and proper administration of Nebraska’s tax laws.
Electronic Payments
Electronic Funds Transfer (EFT) Threshold ( LB 879 – Operative date: January 1, 2011)
The Tax Commissioner may require the use of EFT for all payments of taxes or fees for a tax program, such as income or sales and use tax, if the taxpayer had made a tax or fee payment above $5,000 for that same tax program in a prior tax year. If the taxpayer makes a payment exceeding $5,000 for multiple tax programs in a given year, the taxpayer must make all payments for each tax program electronically in all future years.
For example, a taxpayer makes a sales tax payment of $30,000 and an income tax payment of $2,500 in 2009. In 2010 (and each year thereafter), the taxpayer must make all sales tax payments electronically; the taxpayer is not required to make income tax payments electronically, but is strongly encouraged to do so.
Electronic Funds Transfer (EFT) Penalty Eliminated ( LB 879 – Operative date: January 1, 2011)
All taxpayers are currently subject to a $100 penalty if they are required to make an EFT payment and fail to do so. The penalty will no longer apply to individual income tax payments.
Motor Fuels
Petroleum Release Remedial Action Act ( LB 832 – Operative date: July 15, 2010)
Owners of newly-sited underground petroleum tanks are not required to purchase private insurance for remedial actions relating to the underground petroleum tanks.
Waiver of Interest on Motor Fuel Taxes ( LB 879 – Operative date: January 1, 2011)
The Tax Commissioner may waive interest on motor fuel taxes upon a sufficient showing by the taxpayer that the interest should be waived.
Information Sharing Between State Agencies
Information Sharing with the Department of Labor ( LB 563 – Operative date: July 15, 2010)
The Department must investigate any finding of employee misclassification referred by the Department of Labor, and collect any income tax not withheld by the employer. Referrals by the Department of Labor are limited to construction contractors and delivery service companies.
Information Sharing with the Department of Motor Vehicles ( LB 879 – Operative date: July 15, 2010)
The Department of Motor Vehicles shall provide information to the Department of Revenue about individuals holding a driver’s license or a state identification card, including a license or identification card holder's Social Security Number.
Delinquent Taxpayer Website
( LB 879 – Operative date: July 15, 2010)
The Department of Revenue may post to its website a list of delinquent taxpayers who owe taxes or fees in excess of $20,000 and for which a notice of lien has been filed. The list must include the name and address of the delinquent taxpayer and the type and amount of tax or fee due (including interest, penalties, and other costs). The website may include delinquencies for tax programs administered by the Department of Revenue and the Department of Labor.
Taxpayers will be notified at least 30 days before their names are posted to the website.
Litter Fee
( LB 798 – Operative date: July 15, 2010)
The litter fee was extended until October 30, 2015. The litter fee was set to expire on October 30, 2010.
Nameplate Tax on Wind Energy Generation Facilities
( LB 1048 – Operative date: July 15, 2010)
The owner of a wind energy generation facility shall annually pay a nameplate capacity tax on the total megawatt capacity of wind energy generation facilities multiplied by $3,518 per megawatt. Publicly-owned facilities, including facilities owned or operated by public power generators and customer-generators (net metering), are exempt from the nameplate capacity tax.
For additional information on this provision, please contact Garner Girthoffer at (402) 471-5885 or by e-mail: garner.girthoffer@nebraska.gov
Internal Revenue Code Update
( LB 879 – Operative date: July 15, 2010)
All references to the federal Internal Revenue Code in all Nebraska statutes refer to the federal Internal Revenue Code as it existed as of April 6, 2010.
