2017 Nebraska Legislative Changes

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.

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.

Homestead Exemption Act ( LB 20 — Operative January 1, 2018)

LB 20 removes the annual disability certification for veterans totally disabled by a nonservice connected accident or illness (currently, the Department’s category 2).

Nebraska Budget Act ( LB 217 — Operative August 24, 2017)

LB 217, Section 2, allows for the county assessor to certify the taxable real and personal property value to the governing body by mail (if requested), by electronic means, or by listing the certification on the county assessor's website.

Rent-restricted Housing ( LB 217 — Operative April 28, 2017)

LB 217, Section 5, requires owners of rent-restricted projects to file income and expense statements on a form prescribed by the Tax Commissioner by July 1 of each year, instead of October 1. The Tax Commissioner must distribute the income and expense statements to the county assessor where the rent-restricted housing projects are located on or before August 15 of each year.

Agricultural and Horticultural Land Classification ( LB 217 — Operative August 24, 2017)

LB 217, Section 6, requires that whether a parcel of land is primarily used for agricultural or horticultural purposes will be determined without regard to whether some or all of the parcel is platted and subdivided into separate lots or developed with certain improvements.

Tax Deed Notices ( LB 217 — Operative April 28, 2017)

LB 217, Sections 7, 8, and 9, authorize tax deed notices to be delivered by certified mail or designated delivery service.

Homestead Exemption Act ( LB 217 — Operative August 24, 2017 for Section 20; and January 1, 2018 for Section 21)

LB 217, Section 20, authorizes the delivery of homestead forms for prior-year applicants in the manner approved by the Tax Commissioner; and

Section 21 authorizes that interest does not accrue on property that has had its homestead exemption rejected or reduced until 30 days after certification by the county board of equalization.

Property Tax Credit ( LB 217 — Operative August 24, 2017)

LB 217, Section 22, requires an electronic statement from the county treasurer to the Property Tax Administrator upon the return of unused property tax credit funds.

Nebraska Advantage Act ( LB 217 — Operative August 24, 2017)

LB 217, Section 23, provides that the amount of value exempted, when using Nebraska net book value under the Nebraska Advantage Act is based on the year placed in service. It was previously based on year acquired.

Tax Equity and Educational Opportunities Support Act (TEEOSA) ( LB 217 — Operative August 24, 2017)

LB 217, Section 31, changes the due date for the School District Taxable Value Report from August 25 to August 20. It also changes the due date for any Amended School District Taxable Value Reports from September 30 to August 31.

County Industrial Sewer Construction Act  ( LB 253 — Operative August 24, 2017)

LB 253 authorizes intergovernmental service agreements under the County Industrial Sewer Construction Act and provides for a tax levy.

Special Assessment ( LB 317 — Operative August 24, 2017)

LB 317 provides that any time a special assessment in any city or village against any parcel of real property is found invalid, uncollectable, or void, because of any defect in the proceedings used to levy the special assessment, the mayor and city council (or chairperson and board of trustees) may relevy or reassess the special assessment without regard to whether the defects have been subsequently cured.

Planning Commission; Community Development Law; and Local Option Municipal Economic Development Act ( LB 383 — Operative August 24, 2017)

LB 383 provides that no member of either (1) a community redevelopment authority, or (2) a citizen advisory review committee may also be a member of a city planning commission.

Tax Equity and Educational Opportunities Support Act (TEEOSA) ( LB 409 — Operative May 11, 2017)

LB 409 restricts the base limitation for schools to 1.5% for fiscal years 2017-18 and 2018-19. It also provides that the local effort rate for those years is the maximum levy, less 2.97 cents.

Real Estate Transfer Statement ( LB 535 — Operative August 24, 2017)

LB 535 amends Neb. Rev. Stat. § 76-214 to provide that the Real Estate Transfer Statement, Form 521, is not required for oil, gas, or mineral leases. Instruments submitted for recording in the office of the register of deeds, with certain exceptions, may have a digital signature instead of an ink signature.

County Records ( LB 624 — Operative January 1, 2018)

LB 624 provides that the residential addresses of law enforcement officers will be withheld from the public if the law enforcement officer files an application with the county assessor. The application may be renewed every five years. However, the address will be provided if requested in writing.