2025 Nebraska Legislative Changes

Affordable Housing (LB 182 - Operative January 1, 2024): 

LB 182 deals with the Affordable Housing Tax Credit. The Act is updated to classify nonprofits as taxpayers eligible for the Act. 

Under LB 182, if a qualified project is a pass-through entity, the Affordable Housing Tax Credit shall be allocated to some or all the partners, members, or shareholders of the owner of the qualified project. 

LB 182 allows taxpayers to transfer, sell, or assign tax credits to another taxpayer. 

Child Care Tax Credit (LB 182 - Operative September 3, 2025) and (LB 208 – Sections 4 and 8 - Operative September 3, 2025): 

LB 182 expands the definition of “taxpayer” under the Child Care Tax Credit Act to include insurance companies subject to the premium and retaliatory taxes, and financial institutions subject to the franchise tax. 

LB 182 amends the Act to allow the nonrefundable tax credit for contributors to be used to offset any premium and related retaliatory taxes due under Neb. Rev. Stat. §§ 44-150, 77-908, or 81- 523; or any franchise taxes due under Neb. Rev. Stat. §§ 77-3801 to 77-3807. 

LB 208 changes the Child Care Refundable Tax Credit to be allowed only for qualified resident individuals. 

Food Bank, Food Pantry, Food Rescue Donation Tax Credit (LB 208 – Section 6 - Operative September 3, 2025) and (LB 650 – Section 45 - Operative January 1, 2026): 

LB 208 makes changes to the food donation tax credit by providing for the proration of credit requests received on the day the annual limit is exceeded. Previously, all credit requests received were required to be prorated if the annual limit was exceeded. 

LB 650 eliminates the income tax credit for donations made to a food bank, food pantry, or food rescue for tax years beginning on or after January 1, 2026. 

Give to Enable Support Act (LB 391 - Operative January 1, 2026): 

LB 391 creates the Give to Enable Support Act (Act). This Act allows the State Treasurer’s Office (STO) to establish and administer a trust fund known as the Give to Enable Support Cash Fund. 

Starting January 1, 2026, individuals and entities may donate to the fund and are allowed a decreasing adjustment to their federal adjusted gross income, or for corporations and fiduciaries, to their federal taxable income for the contribution. 

The STO will accept applications from qualified individuals from January 1 to June 1 each year beginning in 2026. The STO will establish an account for the approved applications and notify the individual. STO will approve as many applications as funding allows for each calendar year. An account will be established on or before April 1 of the following year for qualified individuals.

First Responder and Recruitment Retention Act Update (LB 608 - Operative September 3, 2025 and July 1, 2027): 

LB 608 amends the First Responder Recruitment and Retention Act (Act) to include correctional officers, youth detention officers, certain eligible disabled persons, and their qualifying children to attend the University of Nebraska with the tuition waivers under the Act. Also, the Act was amended to include a provision in the event of the first responder’s death in the line of duty. LB 608 adds definitions for qualifying degrees and qualifying children. The Act updates fire services providing fire protection to federal military installations in addition to state military installations.

Eligible disabled person is defined as an individual who no longer is employed as a first responder due to injury or illness that resulted from or is connected to such employment, and is no longer able to maintain employment as a first responder. 

The amendments to the Act go into effect on September 3, 2025, for law enforcement officers and professional firefighters or firefighter-paramedics. For correctional officers and youth detention officers, the changes are effective on July 1, 2027. 

Extremely Blighted Tax Credit (LB 647 – Section 34 - Operative January 1, 2025): 

LB 647 extends the Extremely Blighted Tax Credit for taxable years beginning on or after January 1, 2020 and before January 1, 2032.

Adoption Tax Credit (LB 647 – Sections 7and Section 34 - Operative January 1, 2026): LB 647 also creates the Adoption Tax Credit. For tax years beginning on or after January 1, 2026, the refundable credit is allowed against Nebraska income tax for any qualified resident individual that is eligible for the federal adoption expenses tax credit. The state credit shall be 10% of the federal tax credit. 

College Savings Plan (LB 647 – Sections 41, 45, 53, 55, 57, and 58 - Operative January 1, 2029): 

LB 647 amends the College Savings Plan Program Fund, the College Savings Plan Expense Fund, and the College Savings Plan Administrative Fund by changing multiple references of "College Savings Plan Program Fund" to "Education Savings Plan Program Fund". Beginning January 1, 2029, the bill changes the definition of education expenses to include the cost of tuition for enrollment or attendance at an elementary or secondary school as a qualifying withdrawal. It maintains a limit of $10,000 per beneficiary per taxable year for these types of programs.

Pass-Through Entity Tax (PTET) election (LB 647 – Section 36-37 - Operative September 3, 2026):

LB 647 amends the Pass-Through Entity Tax (PTET) election so that for tax years beginning on or after January 1, 2023, such an election may be made on the applicable income tax return and shall be made on or before the due date for filing the applicable income tax return, including any extensions that have been granted. This update affirms DOR’s processes already in place which allowed the election to be made on the income tax return for tax years beginning on or after January 1, 2023. 

The bill also requires that for tax returns filed for taxable years beginning on or after January 1, 2022, the PTET credit is allowed for the same taxable year during which the election is made, without regard to the year in which the tax is paid to Nebraska or deducted on a federal income tax return.

The Relocation Incentive Act Credit (LB 650 – Section 46, Operative January 1, 2025):

LB 650 decreases the total amount of credits that can be approved each year to $1 million. 

Reverse Osmosis System Tax Credit Act (LB 650 - Section 50 - Operative January 1, 2025): 

LB 650 amends the annual limit of the tax credit available each fiscal year for the Reverse Osmosis System Tax Credit Act. For fiscal years 2024-25 and 2025-26 the annual tax credit is $250,000. For fiscal years 2026-27 and 2027-28 the credit is $500,000. For fiscal years after 2027-28, the annual limit is set at $1 million.

Streamlined Sales Tax Model 1 Sellers (LB 208 – Section 1 - Operative September 3, 2025):

LB 208 makes changes to model 1 sellers. If a model 1 seller’s sales and use tax functions are performed by a certified service provider and the certified service provider is compensated pursuant to the Streamlined Sales and Use Tax Agreement (SSUTA) for performing such functions, then the model 1 seller shall not receive any collection fees.
 

Assigned Sales Tax Rate (LB 208 – Section 5 - Operative September 3, 2025):

LB 208 adds that for purposes of the SSUTA, the database that assigns ZIP codes shall apply the lowest combined tax rate imposed in the nine-digit ZIP code area if the area includes more than one tax rate in any level of taxing jurisdictions, and the database shall apply the highest combined tax rate imposed in the five-digit ZIP code area if the area includes more than one tax rate in any level of taxing jurisdictions.
 

Collection Fee (LB 650 – Section 37 - Operative January 1, 2026): 

Effective January 1, 2026, the collection fee is 2.5% of the total tax due up to $75.00 per month for sales, lodging, and tobacco tax programs.

Convention Center Facility Financing Assistance Act Update (LB 116 – Sections 1-5, Operative September 3, 2025): 

LB 116 updates language in the Convention Center Facility Financing Assistance Act (Act).

The definition of applicant means the political subdivision that applies for assistance.

For eligible facilities located within 600 yards of the State Capitol, the 600-yard area used to determine associated hotels and nearby retailers may now be one or more contiguous or noncontinuous areas within the territorial boundaries of the applicant, as selected by the applicant.

The amount of funds that can be appropriated to any political subdivision with an application approved under the Act is now limited to an annual amount not to exceed 70% of the state sales tax revenue collected by retailers and operators doing business at such facilities on sales at such facilities, state sales tax revenue collected on primary and secondary box office sales of admissions to such facilities, and state sales tax revenue collected by associated hotels and nearby retailers and an aggregate amount of not more than the maximum aggregate appropriation.

The maximum aggregate appropriation is defined as $150 million for any one approved project but not more than the total cost of acquiring, constructing, improving, repairing, replacing, financing, or equipping the eligible facilities of the political subdivision or for a facility within six hundred yards of the State Capitol, the total cost of acquiring, constructing, improving, repairing, replacing, financing, and equipping such facility to not exceed $150 million.

The bill clarifies that the political subdivision can only use state assistance under the Act to pay back bonds issued for facilities approved under the Act. 

Nebraska Biodiesel Tax Credit Act (LB 208 –Section 7- Operative September 3, 2025) and (LB 650 - Section 55 - Operative January 1, 2025):

LB 208 makes changes to the Nebraska Biodiesel Tax Credit Act by providing for the proration of credit requests received on the day the annual limit is exceeded. Previously, all credit requests received were required to be prorated if the annual limit was exceeded. 

The Biodiesel Tax Credit cap is set to $1 million dollars.

Foreign Adversary and Terrorist Agent Registration Act (LB 644 – Section 31 - Operative October 1, 2025):

LB 644 makes it so any foreign adversarial company is ineligible to receive any benefits under any incentive program of the State of Nebraska. 

This includes but is not limited to; The Beginning Farmer Tax Credit Act, The Imagine Nebraska Act, The Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research and Development Act, the Nebraska Advantage Rural Development Act, the Nebraska Job Creation and Mainstreet Revitalization Act, the New Markers Job Growth Investment Act, the Urban Development Act, and any other incentive programs created by the Nebraska Legislature or through an executive action for the purpose of recruitment or retention of businesses in Nebraska.

A foreign adversary is defined as any country listed as such in 15 C.F.R. 791.4 as of April 1, 2025. These countries are China including Hong Kong and Macau, Cuba, Iran, North Korea, and Russia. Venezuelan politician Nicolas Maduro is also included.

A foreign adversarial company is defined as: organized under the laws of a foreign adversary, its principal place of business is within a foreign adversary, is owned in whole or in part, operated, or controlled by the government of a foreign adversary, or is a subsidiary or parent of any company that is organized under the laws of a foreign adversary.

Government of a foreign adversary is defined as a person or group of persons exercising sovereign de factor or de jure political jurisdiction over any foreign adversary, any part of such a country including subdivisions of any such group and any group or agency to which sovereign de factor or de jure authority or functions are directly or indirectly delegated. 

Sports Arena Facility Financing Assistance Act (LB 647 – Sections 11 and 12 - Operative September 3, 2025):

LB 647 makes changes to the Sports Arena Facility Financing Act. The change allows for an application to be submitted if each co-applicant (the political subdivision and the non-profit corporation) has adopted a resolution authorizing either party to pursue financing or bonds to acquire, construct, improve, or equip an eligible sports arena facility for the purposes of leasing all or a portion of a privately owned sports complex for the governmental use of the political subdivision. If an application made under this allowance is approved by the board, the approval is temporary and becomes permanent only if a building permit is issued within 24 months of the temporary approval. The temporary approval becomes void if the building permit is not issued within 24 months. 

Nebraska Advantage Rural Development Act (LB 650 – Section 43 and Section 44 - Operative May 7, 2025): 

The authorization limit for Livestock Modernization applicants is reduced to $7.5 million for 2025 and is $1 million for 2026 and each year after. Beginning January 1, 2026, Livestock Modernization applicants must spend at least $50,000 for livestock modernization or expansion to qualify for the credit with a maximum credit of $150,000. The authorization limit for L1L2 applicants is reduced to $1 million for 2026 and each year after. 

Creating High Impact Economic Futures (CHIEF) Act (LB 650 – Section 13, Section 41, Section 42, Section 51, and Section 58 - Operative January 1, 2025): 

Limits the tax credits under the Creating High Impact Economic Futures Act to calendar year 2025. Tax credits will not be allowed after calendar year 2025. Unused credits may be carried forward for five years and may not be carried back. 

Community Development Assistance Act (CDAA) (LB 650 – Sections 8, Section 13, Section 41, Section 42, Section 51, and Section 58 - Operative September 2025): 

Reestablishes the Community Development Assistance Act (CDAA) and provides a tax credit to a community betterment organization that provides community assistance or community services in a community development area. Applications are approved by the Department of Economic Development. Credits are limited to $350,000 each fiscal year. 

The Cast and Crew Nebraska Act (LB 650 –Section 48 - Operative January 1, 2025): 

The Cast and Crew Nebraska Act updates the total amount of tax credits allowed to $500,000 in any fiscal year. 

Nebraska Shortline Rail Modernization Act (LB 650 – Section 49 - Operative May 7, 2025): 

The authorization limit for the Nebraska Shortline Rail Modernization Act credit is lowered to $500,000 from $1 million for fiscal year 2026-2027 and each fiscal year after.

The Renewable Chemical Production Tax Credit Act (LB 650 –Section 53 - Operative January 1, 2025): 

The Renewable Chemical Production Tax Credit applications are paused after December 31, 2025, and will be restarted on January 1, 2029.

Urban Development Act (LB 650 – Section 54 - Operative May 7, 2025): 

Under LB 650 no new applications can be submitted for the Urban Development Act. 

Good Life District Updates (GLD) (LB 707 - Operative October 1, 2025): 

Effective October 1, 2025, the state sales tax rate in most GLDs will return to 5.5%. 

Removes the option of a city to impose a second local option sales tax within a GLD. The host city may impose a general business occupation tax within the GLD.

In GLDs, except where otherwise noted, the state will allocate fifty percent of the 5.5% state sales tax collected from most transactions physically occurring in the GLD to the host city or project area trustee. Allocated funds will be used for projects and improvements inside the GLD.

 Allocated funds will be capped at five million dollars for sales from businesses in a GLD that existed at least 366 days before the GLD was approved. 

The allocation does not apply to the sales of aircraft, all-terrain vehicles, barges, motor vehicles, motorboats, railroad rolling stock, semitrailers, and trailers or to sales that are taxed at a reduced sales tax rate. 

In a GLD in a county with a metropolitan class city that has an enhanced employment area (EEA), businesses may opt into being a GLD retailer and they can charge fifty percent of the state sales tax rate on transactions physically occurring in the GLD. The local sales tax remittance to a city of the metropolitan class will be offset to account for the lost state sales tax revenue above $5 million dollars from businesses in a GLD that existed at least 366 days before the GLD was approved. 

LB 707 also states that if a GLD project is owned by a city, the city is not exempt from sales tax on building materials purchases for new businesses that will or are intended to offer taxable sales in the GLD. 

GLD applicants are required to demonstrate they have sufficient financing and that the project is financially viable. Because of these requirements, county assessors must ensure all real and personal property in a GLD has an assessed value, even if the property is exempt from property tax. This will require the applicants to file a personal property statement, even if the personal property in question is not taxable. The applicants must also show they have land ownership in the GLD or an option to purchase land in the GLD within 180 days. All property must be contiguous. 

After a GLD is approved, it may only be reduced in size. GLD and project area applicants must submit an annual report to the Department of Economic Development (DED) and the host city by December 31st. 

GLD applicants and retailers are eligible for a state refund of fifty percent of the state sales tax paid on development costs for a new business, additional GLD or relocated retailer to the extent there is excess allocation available ($5 million in new state sales tax from new businesses and additional GLD retailers net of allocation and refunds) at the time the improvements are placed in service.

 LB 707 allows for the establishment of up to six project areas to be created in a GLD that is in a city of the first class, second class, or a village with a population over one hundred thousand people. In a city of the metropolitan class, there may only be one project area, and it must be owned by the GLD applicant.

Nicotine Analogues and Tobacco Products Tax Act (LB 9 - Operative January 1, 2026):

LB 9 amends the definition of alternative nicotine products and electronic delivery systems (ENDS) to include nicotine analogues. Beginning January 1, 2026, alternative nicotine products are subject to the Tobacco Products Tax Act at a rate of 20% of the purchase price paid by the first owner or the price at which the first owner who manufactured, tobacco product sells the alternative nicotine products to others.

Nicotine analogues are defined as any substance that has a chemical structure substantially like nicotine or a substance that influences the central nervous system that is substantially like or greater than the effect caused by nicotine.

LB 9 establishes statute of limitations for the cigarette and tobacco tax programs at three years or six years if fraud, false or no return is filed. It also allows for the Tax Commissioner and the taxpayer to enter into a statute of limitations agreement to extend this period.

LB 9 allows the Tax Commissioner to revoke a local tobacco license for a violation of the Tobacco Products Act and administer a penalty up to $5,000 for any violation. The Tax Commissioner may seize products in violation of the Tobacco Products Act. The cost of such seizure, forfeiture, and destruction shall be borne by the person from whom the products are seized. 

Kratom Consumer Protection Act (LB 230 - Operative January 1, 2026): 

LB 230 creates the Kratom Consumer Protection Act.

The Act prevents the sale of kratom products to individuals under the age of 21, prevents the sale of kratom products manufactured in a manner attractive to children, and creates label requirements for the product.

The Department of Revenue (DOR) is required to establish, operate, and administer a program to register and regulate kratom products on or before January 1, 2026. DOR is also required to set a fee to pay for the cost of implementing and administering this Act. DOR may adjust the registration fee annually. These fees will be credited to the DOR Enforcement Fund.

DOR is required to maintain a list of registered kratom products.

The first violation of this Act would result in a civil penalty of up to $1,000, a second violation would be a civil penalty up to $5,000, third and subsequent violations would be civil penalty of at least $5,000 but no more than $20,000. Third and subsequent violations would also result in a three-year ban on selling kratom.

Lastly, LB 230 regulates the sale of flavored nitrous oxide.

Sales Tax Confidentiality (LB 208 – Section 2 - Operative September 3, 2025): 

LB 208 adds “any other person” to be included in confidentiality requirements regarding sales tax.

Infrastructure Task Force (LB 558 - Operative September 3, 2025): 

LB 558 creates the Infrastructure Task Force. The task force shall review and analyze Nebraska’s transportation infrastructure network, examine the historic infrastructure development efforts, expected future needs, examine the statue and condition of the transportation infrastructure, make recommendation as to how Nebraska might maintain and ensure safe infrastructure in the future, and utilize information and research available from the annual report on the needs of the state highway system and other information available to the department of Transportation. The task force shall also review possible federal funding sources.

The task force is made up of the Governor, a designee of the Governor, the Chairperson of the Revenue committee, the Chairperson of the Transportation and Telecommunications Committee, the Speaker of the Legislature, the Director-State Engineer, the Tax Commissioner, and three Senators appointed by the Executive Board of the Legislature. Members of the task force who are not members of the Legislature shall be nonvoting, ex officio members. 

Under LB 558, the Tax Commissioner is not authorized to send a designee in their place. The task force shall submit a report on or before December 1 of each year.

Disclosure of Tax Information to Municipalities (LB 613 - Operative September 3, 2025):

Requires the Tax Commissioner to provide any information requested by municipalities that have adopted a local option sales tax regarding businesses in their jurisdiction. The information allows review, of expenses, or operations of a particular business. A request can be made up to three times a year.

LB 613 allows the designated municipality employee to disclose copies of returns and return information to another municipality employee for the purpose of verifying accuracy, analysis, forecasting, accuracy of reporting between municipalities, and ensure taxes are used for the purpose voted on by the public.

Under LB 613, if tax proceeds are received for a city that imposes a local sales and use tax, but the name of the city is not identified within six months, then the amount shall be credited to the Municipal Equalization Fund.

Municipalities may request from DOR a list of qualified businesses that have filed to receive a tax incentive under the Employment and Investment Growth Act, the Nebraska Advantage Act, the ImagiNE Nebraska Act, or the Urban Redevelopment Act. This request may be made annually.

New Sports for State Athletic Commissioner to Regulate (LB 635 - Operative September 3, 2025): 

LB 635 allows the State Athletic Commissioner to allow and regulate professional bare-knuckle mixed martials arts, professional mixed martial arts on ice, professional muay thai, amateur muay thai, and amateur kickboxing.

Notices of Deficiency (LB 647 – Section 38 - Operative September 3, 2025):

 LB 647 also makes changes to notices of deficiency to include a written statement containing the details of the facts, circumstances, and reasons the Tax Commissioner used to determine the taxpayer did not report the correct amount of tax.

Local Option Sales and Use Tax Review (LB 650 – Section 40 and Section 54 - Operative September 3, 2025):

LB 650 allows a municipality certified representative to the DOR to disclose to the Auditor of Public Accounts any irregularities or discrepancies they find in their review of local option sales and use taxes.

Mechanical Amusement Device Tax Act Update (LB 177 - Operative September 3, 2025):

LB 177 makes changes to the Mechanical Amusement Device Tax Act.

First, it updates the definitions of a distributor and operator that the distributor definition does not apply to a retail establishment. An operator is someone who operates a place of business in which a mechanical amusement device is physically located and available to play.

Operator, distributor, and manufactures are required to apply biannually for their license.

A distributor license fee is increased to $200 per cash device up to a maximum of $10,000.

The manufacturing license fee is changed to $10,000.

A background check can be required at any time by the Charitable Gaming Division on any licensee except for an applicant that holds a liquor license under the Nebraska Liquor Control Act. The applicant or licensee shall cover the cost of the background check.

Language is added to clarify that the Federal Bureau of Investigation (FBI) through the Nebraska State Patrol shall conduct fingerprinting and a check of the applicant’s criminal history to determine of the DOR shall have a basis to deny the license application or suspend, cancel, revoke, or terminate the person’s license.

Real Estate Transfer Statement & Foreign-owned Real Estate National Security Act (LB 7 - Operative September 3, 2025):

LB 7 updates the definitions of foreign corporation, foreign government, Indian tribe, and person and clarifies that Indian tribes are not foreign governments for the purposes of the foreign-owned Real Estate National Security Act. It also updates references to federal statutes and indicates they are referenced as they existed on certain dates. The other sections make technical changes to the Act.

Nameplate Capacity Tax (LB 50 - Operative September 3, 2025):

LB 50 requires the county treasurer to distribute five percent of revenue collected from the nameplate capacity tax to the community college area in which the renewable energy generation facility is located, with the remainder being distributed under the existing method under Neb. Rev. Stat. § 77-6204.

Documentary Stamp Tax (LB 78 - Operative September 3, 2025) and (LB 194 - Operative September 3, 2025):

LB 78 increases the documentary stamp tax rate from two dollars and twenty-five cents to two dollars and thirty-two cents with the seven-cent increase going to the new Domestic Violence and Sex Trafficking Survivor Housing Assistance Fund created under the bill.

LB 194 amends exemption five to the documentary stamp tax so that step relationships are treated the same as blood relationships. It also clarifies that deeds to or from single member corporations and limited liability companies qualify under exemption five as long as the grantor or one of the grantors is the same person as the single owner of the company.

Budget Limitations and the Property Tax Growth Limitation Act (LB 123 - Operative September 3, 2025):

LB 123 states if a governmental unit does not comply with the budget limits under Neb. Rev. Stat. §§ 13-518 to 13-522, state aid redistributed for noncompliance by the governmental unit with must now remain in the county or be returned to the Highway Allocation Fund if there is no eligible recipient in the county; homestead reimbursements are still returned to the General Fund. Also adds a requirement that the state treasurer be notified by the Auditor that the local government has reached compliance, and that a government failing to reach compliance within 12 months forfeits future state aid distributions until complying.

Amends Neb. Rev. Stat. § 13-3407 so that upon receiving notice from the Auditor of Public Accounts, the State Treasurer will not distribute aid to a county, city, or village that has failed to submit its form calculating its property tax request authority or is not in compliance with the Property Tax Growth Limitation Act.

Residential Addresses of Law Enforcement Officers or Judges (LB 166 - Operative September 3, 2025):

LB 166 requires, in an addition to county assessors and registers of deeds, a county treasurer to withhold from the public the residential address of law enforcement officers, Nebraska National Guard law enforcement officers, or judges who have applied to have their addresses withheld. The legislation also requires county treasurers to be notified by the county assessor of those who apply to have their addresses withheld.

Proert Tax Exemptions (LB 209 - Section 1, Operative February 25, 2025), (LB 647 - Sections 27 and 28 - Operative January 1, 2026), and (LB 650 – Section 11 - Operative June 4, 2025):

LB 209 amends Neb. Rev. Stat. § 77-202 by clarifying that the partial property tax exemption offered to facilities which provide beds to Medicaid beneficiaries specifically applies to for-profit nursing, skilled nursing, and assisted-living facilities while non-profit facilities may still obtain a full property tax exemption based on the non-profit facility’s exempt ownership and use.

LB 647 Adds “taxpayer” to Neb. Rev. Stat. § 77-202.01 to the list of eligible parties who may claim an exemption under Neb. Rev. Stat. § 77-202(1) (f).

LB 650 Amends Neb. Rev. Stat. § 77-201.23 to change the definition of “disabled veteran” to that found in 5 U.S.C. 2108 for purposes of exempting a mobile home from taxation owned by such a veteran as provided for in Neb. Rev. Stat. § 77-202.24.

Homestead Exemption (LB 209 - Section 2, Operative February 25, 2025):

LB 209 amends Neb. Rev. Stat. § 77-3506 to include veterans, who are not one hundred percent physically disabled, but are drawing compensation from the Department of Veterans Affairs as if they were so disabled due to individual unemployability pursuant to 38 C.F.R. 4.16, amongst those veterans who are eligible to receive a Nebraska homestead exemption.

Community Development Law/Tax Increment Financing (TIF) (LB 240 - Operative March 11, 2025) and (LB 288 - Operative Sep. 3, 2025):

LB 240 requires notices of a redevelopment plan provision for dividing ad valorem taxes under Neb. Rev. Stat. § 18-2147 be sent by the taxing authority to the county assessor on or before July 1 instead of August 1.

LB 288 amends the Community Development Law by adding a lack of affordable housing as a basis for a redevelopment project. The bill also defines lack of affordable housing and adds it to the definition of “blighted area” and “substandard area”. Any project approved because of the lack of affordable housing may only be approved if the project includes the construction of residential housing and at least 30 percent of the residential housing in such an area will be affordable housing when the project is complete.

School Financing (LB 303 - Operative June 4, 2025):

LB 303 creates the School Financing Review Commission, which consists of 18 members, including the Property Tax Administrator, for the purpose of providing advisory recommendations for school funding in Nebraska. By December 1, 2025, and by November 1 of each year after, the Commission must deliver to the Clerk of the Legislature an annual report with observations and recommendations.

Mutual Finance Assistance Act (LB 399 - Operative October 1, 2025):

LB 399 changes language related to mutual finance organization agreements so that agreed upon property tax rates may exclude levies for bonded-indebtedness or lease-purchase contracts in existence “on or after” July 1, 1998, whereas before the language stated “on July 1, 1998.”

Lowers the population requirement of rural or suburban fire protection districts from 80% to 60% of the assumed county population to be eligible for a distribution from the Mutual Finance Assistance Fund.

Damaged Real Property (LB 501 - Operative April 7, 2025):

LB 501 changes the property tax relief provisions for “destroyed” real property by changing the term to “damaged” real property and adds language stating events that cause “significant damage” may also cause qualifying damage to real property.

Removes language regarding a “calamity” and defines significant property damage as property that is damaged in an area declared a natural disaster and determined to be uninhabitable or unlivable. These changes clarify that the damage does not need to be caused by an act of nature to be qualifying damage.

County assessors are required to inspect and review all damaged real properties for which a Damaged Real Property Report has been filed and to submit a comprehensive report of all such properties to the county board of equalization on or before July 20 of each assessment year. The form must be prescribed by the Tax Commissioner and include all damaged real property reports filed. 

Recreational Trail Easement Property Tax Exemption Act (LB 647 – Sections 1 through 6, 25, 26, 28, and 29 - Operative January 1, 2026):

LB 647 creates the Recreational Trail Easement Property Tax Exemption Act to provide a property tax exemption for the portion of property encumbered by a recreational trail easement meeting the following requirements:

• The easement is perpetual and recorded with the register of deeds;
• The easement provides public access and connects to existing or planned trails or local attractions;
• The easement is held by an eligible holder, including nonprofit organizations demonstrating a mission to promote public access, health, and wellness through recreational land use; a commitment to environmental conservation and land stewardship; and capacity to oversee and manage the easement; and
• No reapplication for the property tax exemption is required unless the easement no longer encumbers the property.
• The recreational trail exemption application must include proof of the easement and certification which confirms compliance with the public access and connectivity requirements; and

Additional provisions relating to the property tax exemption include the following:

• There is now a requirement to file a real estate transfer statement for easements used to qualify for the exemption;

• Neb. Rev. Stat. § 77-202.03 is amended by stating a statement of reaffirmation is not required for a trail exemption, but when exempt property is sold between July 1 and October 20, the purchaser shall apply for the exemption on or before November 15;

• The act requires the Department of Revenue adopt and promulgate rules and regulations necessary to carry out the exemption.

Growth (LB 647 – Sections 10, 13, and 32 - Operative June 4, 2025): 

LB 647 makes the following changes to harmonize the different statutory definitions of “growth.” 

Redefines “allowable growth” and extends its definition to all governmental units other than community colleges by now including any increase in valuation due to a change in the use of real property and the accumulated excess valuation for community redevelopment/TIF projects described in Neb. Rev. Stat. § 18-2147 within the governmental unit in the year immediately after the division of taxes for a project has ended. Section 13 clarifies the definition of growth value under the Property Tax Growth Limitation Act for political subdivisions by mirroring the definition of allowable growth under Section 10 of the bill. Section 13 also clarifies the definition of inflation percentage. 

Section 32 of LB 647 amends Neb. Rev. Stat. § 77-1631 of the Property Tax Request Act by:

• Removing the definition of “excess value”;
• Changing the calculation of “real growth percentage” by deleting the reference to “total real property valuation” and replacing it with “total property valuation”; and
• Redefining “real growth value” in the following ways: (1) Changes language from the increase in “real” property valuation to the increase in “total” property valuation; (2) includes any increase in personal property valuation over the prior year; (3) includes the accumulated excess valuation over a community redevelopment/tax increment financing project valuation described Neb. Rev. Stat. § 18-2147 within the political subdivision in the year immediately after the division of taxes for such project has ended; and (4) removes existing language that included community redevelopment projects annual increases in excess value for purposes of “real growth value.”

Property Tax Request Authority (LB 647 – Sections 14 through 16 - Operative June 4, 2025):

LB 647 clarifies the preliminary property tax request authority for a political subdivision is that amount requested and approved by each political subdivision and included on the budget document filed with the auditor in the prior fiscal year pursuant to Neb. Rev. Stat. § 13-506(2) minus the exceptions used in the prior year under Neb. Rev. Stat. § 13-3404(1) to (7). It also states the calculation by how much a political subdivision may increase its request authority if it chooses to do so. Removes language indicating an election to increase property tax authority must be held on the first Tuesday after the second Monday in May of an odd-numbered year. Amends Neb. Rev. Stat. § 13-3406 to allow political subdivisions to convert their accumulated amount of unused restricted funds authority existing on June 30, 2025, as determined under Neb. Rev. Stat. § 13-521, into unused property tax request authority. The converted amount may be used as unused property tax request authority for fiscal years beginning on or after July 1, 2025. The amount converted cannot exceed five percent of the total property taxes levied by the subdivision in calendar year 2024.

Property Tax List (LB 647 – Section 31 - Operative January 1, 2026):

LB 647 makes changes to the property tax list. The property tax list prepared by the county assessor pursuant to Neb. Rev. Stat. § 77-1613 must now include the amount of property tax credits not reimbursed by the state. Property Tax Collection (LB 647 – Section 33 - Operative June 4, 2025):
LB 647 amends Neb. Rev. Stat. § 77-1701 so that the notice of taxes due does not have to indicate the levy rate and must include the amount of taxes due to fund any and all public safety services defined in Neb. Rev. Stat. § 13-320, regardless of whether such amount is taken as an exception to the political subdivision’s property tax request authority under the Property Tax Growth Limitation Act.

Property Tax Collection (LB 647 – Section 39 - Operative June 4, 2025):

Under LB 647, in determining the amount of the property tax credit due for each parcel under the School District Property Tax Relief Act, the county treasurer must use the school taxes levied in the current year rather than the prior year. It is also amended so that county treasurers may retain one percent of the amount disbursed to them by the state treasurer before disbursing the remainder to school districts.

Property Tax Request Act (LB 650 – Sections 14 and 15 - Operative June 4, 2025):

LB 650 Amends Neb. Rev. Stat § 77-1632 of the Property Tax Request Act by excluding community college’s from the political subdivisions required to follow the requirements under Neb. Rev. Stat. § 77-1633 for increasing property tax request by more than the allowable growth percentage. This includes the postcards required to be sent to all affected taxpayers.

Delinquent Property Tax Sales (LB 650 – Sections 9 and 16 through 35 - Operative June 4, 2025):

LB 650 makes the following changes to the county process for selling properties delinquent on property tax payments: 

• The county treasurer may designate someone to execute the sale of delinquent property and an auction may occur at a designated location rather than the treasurer’s office;
• The following fee changes are made:
  • The fee assessed by the treasurer for advertising property taxes due for delinquent property is increased from five to twenty dollars and it is the legislature's intent to examine the fee every five years beginning in 2030;
  • The fee charged to the property owner for the purchaser's notice is adjusted from the greater of 100 dollars or the actual costs to a flat rate of 150 dollars;
  • The county treasurer's fee for issuing a sale certificate is increased from 20 to 25 dollars;
  • The county treasurer may no longer charge a two dollar fee for a memorandum of redemption receipt;
  • Increases the maximum newspaper publication fee from 20 to 25 dollars;
  • The county treasurer may no longer charge a one dollar fee for service of notice;
• The requirements for the delinquent property purchase certificate are changed;
• Owners of delinquent property must now be given notice that fees may have been levied against the property, but notice may no longer be given by certified mail if property is determined to be vacant and abandoned;
• There are now alternative time periods for a land bank or purchaser to apply to the county treasurer for a tax deed or bring action to foreclose the lien on a property for the nonpayment of taxes depending on whether the property is considered vacant and abandoned and there are now guidelines for determining whether a property is vacant and abandoned; and
• The surplus calculation now equals the assessed value as of the date of the application of the tax deed.

School District Property Tax Relief Act (LB 650 – Sections 56 and 57 - Operative June 4, 2025):

LB 650 amends Neb. Rev. Stat. § 77-7304 by removing the specific amounts to be transferred to the School District Property Tax Credit Relief Fund in future tax years to similar amounts required to be transferred to the fund under Neb. Rev. Stat. § 77- 7305. It changes provisions under Neb. Rev. Stat. § 77-7305 to clarify the amounts to be transferred to the fund are “minimum” amounts and that any money transferred to the fund under Neb. Rev. Stat. § 77-4602 shall count toward that minimum amount.