2014 Nebraska Legislative Changes
Income Tax
Index Individual Income Tax Brackets (
LB 987 – Operative Date: January 1, 2015)
Individual income tax brackets will be adjusted annually for inflation for tax years beginning on or after January 1, 2015.
Internal Revenue Code Update ( LB 739 – Operative Date: April 11, 2014)
References to the federal Internal Revenue Code in Nebraska statutes refer to the federal Internal Revenue Code as it existed on April 11, 2014, except in the statutory provisions relating to individual and business income taxation.
Nebraska Job Creation and Mainstreet Revitalization Act ( LB 191 – Operative Date: January 1, 2015)
Any natural person, political subdivision, limited liability company, partnership, private corporation, or nonprofit corporation may earn a nonrefundable tax credit for eligible expenditures to improve qualifying historically-significant real property. The credit is transferrable and may be used against income tax, insurance premium tax, and financial institutions franchise tax. The person or entity making the expenditures must file an application with the State Historic Preservation Officer of the Nebraska Historical Society to qualify for the credit.
Partial Income Tax Exemption for Military Retirement Income ( LB 987 – Operative Date: January 1, 2015)
A taxpayer may make a one-time election within two years after the date of his or her retirement from the military to exclude some military retirement benefits from income subject to Nebraska income tax.
Partial Income Tax Exemption for Social Security Income ( LB 987 – Operative Date: January 1, 2015)
A taxpayer may subtract Social Security income included in federal adjusted gross income if a taxpayer’s federal adjusted gross income is less than or equal to $58,000 for married couples, filing jointly, or $43,000 for all other tax returns.
Refundable Income Tax Credits ( LB 851 – Operative Date: July 17, 2014)
Except as otherwise provided by law, a claim for credit or refund of a refundable income tax credit must be filed by the taxpayer within three years after the due date of the return for the year in which the refundable credit was allowable.
Sales and Use Taxes
Collection of Sales Tax on Purchases of All-terrain Vehicles and Utility-type Vehicles ( LB 814 – Operative Date: October 1, 2014)
A county treasurer will collect sales tax from the purchasers of all-terrain vehicles (ATVs) and utility-type vehicles (UTVs) at the time the vehicles are titled; sales tax will no longer be collected by the retailer at the time of sale.
Sales Tax on Direct Mail Delivery Charges ( LB 867 – Operative Date: April 1, 2014)
Delivery charges do not include U.S. postage charges on direct mail if the charges for U.S. postage are separately stated on the invoice, bill of sale, or similar document given to the purchaser. Separately stated charges for U.S. postage on direct mail are no longer subject to sales and use taxes.
Sales Tax Exemption for Agricultural Repair Parts ( LB 96 – Operative Date: October 1, 2014)
Effective October 1, 2014, sales of all repair and replacement parts used to repair agricultural machinery and equipment used in commercial agriculture are exempt from sales and use taxes. The purchaser must issue to the seller a properly completed Nebraska Resale or Exempt Sale Certificate Form 13, Section B, exempt category 2, to exempt the purchase from tax.
Note - All sales of repair and replacement parts for agricultural machinery and equipment used in commercial agriculture remain taxable through September 30, 2014. The tax paid on the purchase of depreciable repair and replacement parts for agricultural machinery and equipment used in commercial agriculture, as defined in Sales and Use Tax Regulation 1-094, is eligible for a refund, as has been the case for many years. The Department will continue to accept refund claims for tax paid on depreciable repair and replacement parts as long as the refund claims are filed within three years after the date of purchase.
Sales Tax Exemption for Automobile Museums ( LB 867 – Operative Date: October 1, 2014)
The purchase of items by a historic automobile museum for display and which are reasonably related to the general purpose of the museum are exempt from sales and use taxes.
Sales Tax Exemption for Bullion or Currency ( LB 867 – Operative Date: April 1, 2014)
The purchase of bullion or currency is exempt from sales and use taxes.
Sales Tax Exemption for C-BED Projects ( LB 402 – Operative Date: October 1, 2014)
The purchases of materials for qualified community-based energy development (C-BED) projects are exempt from sales and use taxes, and include projects using wind, solar, biomass, and landfill gas as the fuel source. A project must file an application with the Department of Revenue. At least 25% of the gross power purchase agreement payments must go to a qualified owner or local community. For additional information, contact Cliff Thomas, Nebraska Department of Revenue, at 4024715676.
Sales Tax Exemption on Energy Used to Compress Natural Gas for Fuel ( LB 867 – Operative Date: January 1, 2015)
The purchase of energy used in the compression of natural gas for retail sale as a vehicle fuel is exempt from sales and use taxes.
Sales Tax Liability for Resident Operators of Recreational Vehicles ( LB 851 – Operative Date: October 1, 2014)
A recreational vehicle (for example, a motor home), which is registered in another state, owned by a limited liability company, partnership, corporation, or other business entity, but is in the possession of and controlled by a Nebraska resident, is presumed to be owned by the Nebraska resident. The Nebraska resident is also liable for all applicable taxes and fees due in Nebraska.
Tax Incentives
Nebraska Advantage Act Applications ( LB 1067 – Operative Date: July 17, 2014)
The Department may not accept any new Tier 1, Tier 3, or Tier 6 applications after December 31, 2017. Previously, no new applications could be accepted after December 31, 2015.
Nebraska Advantage Microenterprise Tax Credit Act Applications ( LB 1067 – Operative Date: July 17, 2014)
The Department may not accept any new Nebraska Advantage Microenterprise Tax Credit Act applications after December 31, 2017. Previously, no new applications could be accepted after December 31, 2015.
Nebraska Advantage Research and Development Act ( LB 1067 – Operative Date: July 17, 2014)
A taxpayer may not claim a tax credit authorized under the Nebraska Advantage Research and Development Act for the first time after December 31, 2017. A taxpayer may continue to use previously-authorized credits under the Act after December 31, 2017. Previously, a taxpayer could not claim the credit for the first time after December 31, 2015.
Nebraska Advantage Research and Development Act ( LB 851 – Operative Date: July 17, 2014)
A claim for credit or refund of a refundable credit, including a credit claimed under the Nebraska Advantage Research and Development Act, must be filed by the taxpayer within three years after the due date of the return for the year in which the refundable credit was allowable.
Lottery/Charitable Gaming/Athletic Commission
Keno Writers Licensing Requirement ( LB 259 – Operative Date: July 17, 2014)
A keno writer, who has no direct responsibility for the selection of numbers, is not required to be licensed for purposes of the Nebraska County and City Lottery Act.
Miscellaneous
Extension of Payment Agreements ( LB 33 – Operative Date: July 17, 2014)
A taxpayer may voluntarily sign an extension for a payment agreement beyond a three-year period (the period of time in which the Department can collect against a tax delinquency that is final, due, and owing).
