2011 Nebraska Legislative Changes

Audits of Cigarette Tax Stamps (LB 337 – Operative Date: April 26, 2011)

The Auditor of Public Accounts may conduct audits of money received from the sale of cigarette stamps and tax meter impressions as deemed necessary. Previously, audits on the sale of cigarette tax stamps and tax meter impressions were conducted annually by the Auditor of Public Accounts.

Cigarette and Tobacco Reporting Requirements (LB 590 – Operative Date: January 1, 2013)

Beginning January 1, 2013, tobacco product manufacturers, importers, wholesalers, retailers, and stamping agents are subject to new reporting and licensing requirements for the sale of cigarettes in Nebraska. These new, detailed reporting requirements are to ensure the collection of cigarette taxes and escrow on all cigarettes sold in the state. 

Cigarette Tax Agreements with Indian Tribes (LB 590 – Operative Date: August 27, 2011)

The Governor may negotiate cigarette tax and escrow collection agreements with federally-recognized Indian tribes located within Nebraska.

Internal Revenue Code Update ( LB 134 – Operative date: February 22, 2011)

All references to the federal Internal Revenue Code in Nebraska statutes refer to the federal Internal Revenue Code as it existed on February 22, 2011.

Renewable Energy Tax Credit ( LB 360 – Operative Date: October 1, 2011)

A producer of electricity generated by a renewable electric generation facility is no longer required to be certified by the Department of Environmental Quality as a zero-emission facility to qualify for the renewable energy tax. The total credit was reduced from $750,000 to $50,000 for all taxpayers. The credit may be used to reduce a producer's income tax liability or to obtain a refund of sales and use taxes paid by the producer. 

Alternative Fuel User Program ( LB 289 – Operative Date: January 1, 2012)

The alternative fuel user program will be administered by the Nebraska Department of Motor Vehicles. Previously, the program was administered by the Nebraska Department of Revenue.

Audits of the Motor Fuel Tax Enforcement and Collection Division ( LB 337 – Operative Date: April 26, 2011)

The Auditor of Public Accounts may conduct audits of funds expended by the Motor Fuel Tax Enforcement and Collection Division as deemed necessary. Previously, audits of the Motor Fuel Tax Enforcement and Collection Division were conducted biennially by the Auditor of Public Accounts.

Occupation Taxes on Telecommunication Services ( LB 165 – Operative Date: January 1, 2013)

Beginning January 1, 2013, a municipality may not levy an occupation tax exceeding 6.25% on telecommunications services. A municipality may increase the occupation tax rate beyond 6.25% with a vote of the people, but the rate may not increase by more than 0.25% per election. Also beginning January 1, 2013, an occupation tax cannot be levied on telecommunications equipment.

Common and Contract Carrier Sales Tax Exemption Certificates ( LB 210 – Operative Date: October 1, 2011)

All common or contract carrier sales tax exemption certificates will expire on October 31, 2013. After October 31, 2013, all common or contract carrier sales tax exemption certificates will expire every five years. Previously, all common or contract carrier sales tax exemption certificates expired every three years.

County Sales Tax ( LB 106 – Operative Date: August 27, 2011)

A county may impose (by election) a county sales and use tax for purposes of financing public safety services, which include crime prevention, offender detention, and firefighter, police, medical, ambulance, or other emergency services.

Renewable Energy Tax Credit ( LB 360 – Operative Date: October 1, 2011)

A producer of electricity generated by a renewable electric generation facility is no longer required to be certified by the Department of Environmental Quality as a zero-emission facility to qualify for the renewable energy tax. The total credit was reduced from $750,000 to $50,000 for all taxpayers. The credit may be used to reduce a producer's income tax liability or to obtain a refund of sales and use taxes paid by the producer. 

Sales and Use Tax Due Date ( LB 210 – Operative Date: October 1, 2011)

The due date will change from the 25th of the month to the 20th of the month. This change will take effect:

• For monthly filers, with the October return due on November 20, 2011;
• For quarterly filers, with the fourth quarter return due on January 20, 2012; and
• For annual filers, with the 2011 annual return also due on January 20, 2012.

This change applies to the Nebraska and Local Sales and Use Tax Return, Form 10, and the Business Nebraska and Local Use Tax Return, Form 2. The Nebraska and County Lodging Tax Return, Form 64, and the Nebraska Tire Fee Return, Form 93, remain due on the 25th of the month.

Sales of Low-speed Vehicles ( LB 289 – Operative Date: January 1, 2012)

The sale of a motor vehicle includes the sale of low-speed vehicles. The seller of a low-speed vehicle must provide the purchaser with a Nebraska Sales/Use Tax and Tire Fee Statement for Motor Vehicle and Trailer Sales, Form 6.

Sales Tax Exemption for "Meals" and "Food Products" ( LB 211 – Operative Date: October 1, 2011)

The terms “meals” and “food products” were replaced with the terms “prepared food” and “food and food ingredients.” This change does not affect the taxability of these items.

Sales Tax Exemption for Nonprofit, Private Colleges and Universities ( LB 637 – Operative Date: May 4, 2011)

Purchases by regionally or nationally accredited, privately-controlled nonprofit colleges or universities are exempt from sales tax if the college or university’s primary campus is physically located in Nebraska. Previously, the sales tax exemption was available to any private, nonprofit college or university accredited by the State, regardless of its primary location.

Sales Tax Revenue Dedicated for Road Projects ( LB 84 – Operative Date: July 1, 2013)

Beginning July 1, 2013, the proceeds from a sales and use tax rate of one-quarter of one percent are credited 85% to the State Highway Capital Improvement Fund and 15% to the Highway Allocation Fund.

Tax Rates for Direct Mail ( LB 211 – Operative Date: October 1, 2011)

The sales tax rate for direct mail is based on the type of direct mail being sent – either advertising and promotional material, or other direct mail – and the delivery location or information provided by the purchaser of the direct mail. Sellers of advertising and promotional direct mail material will continue to collect sales tax based upon the delivery location. Sellers of "other direct mail" material, such as customer newsletters and bank statements, will collect sales tax based on the purchaser's address. Purchasers of either type of direct mail may continue to provide the seller with a Direct Pay Permit or exemption certificate and self report use tax based on the delivery location. 

Tax Rates for a Motor Vehicle Lease or Rental ( LB 211 – Operative Date: October 1, 2011)

The sales tax rate for a lease or rental of a motor vehicle (automobile, truck, trailer, or truck-tractor) is based upon the primary location of the motor vehicle. The sales tax rate was previously based upon the motor vehicle’s location on the date on which the lease or rental agreement was executed.

Wyuka Cemetery Sales Tax Exemption ( LB 252 – Operative Date: July 1, 2011)

Purchases by Wyuka Cemetery are exempt from sales and use tax.