2015 Nebraska Legislative Changes
Income Tax
Interest on Refunds under the Renewable Energy Tax Credit and the Nebraska Historic Tax Credit (Nebraska Job Creation and Mainstreet Revitalization Act) (
LB 261 – Operative March 6, 2015)
Interest will not be paid on refunds made under either of these tax credit programs. This includes amended returns.
Achieving a Better Life Experience (ABLE) Accounts ( LB 591 – Operative May 28, 2015)
Individuals, corporations, or fiduciaries that make a contribution to an account as a participant under this Act and IRC § 529A to pay qualified expenses of a disabled person, may exclude from federal adjusted gross income or federal taxable income contributions to the account up to $5,000 for a married, filing separately return or $10,000 for any other return. The owner of the account may exclude any income earned by the account. If a participation agreement is cancelled, the amount refunded to the taxpayer is an adjustment increasing federal adjusted gross income (or federal taxable income for corporations and fiduciaries), up to the amount previously deducted. The State Treasurer has indicated that this program will not be available to taxpayers until at least tax year 2016.
Earned Income Tax Credit Affected by Net Operating Loss Carryovers ( LB 591 – Operative for taxable years beginning on or after January 1, 2015)
Persons otherwise eligible for the earned income tax credit will only be eligible for the credit if they would have been eligible for the federal earned income tax credit after adding back any net operating loss carryover deducted from federal adjusted gross income for the tax year.
Sales and Use Taxes
Sanitary Drainage Districts ( LB 52 – Operative October 1, 2015)
Sanitary drainage districts organized under Neb. Rev. Stat. §§ 31501 to 31553 are exempt from sales and use tax on their purchases.
Sales Tax on Remote Sales ( LB 200 – Operative August 30, 2015 – Terminates August 30, 2018)
If the U.S. Congress enacts a law expanding state authority to require collection of sales taxes from sellers without physical presence in the state, the Nebraska Department of Revenue will determine the additional amount collected during the first twelve months after Nebraska begins collecting this additional revenue; and certify the amount to the Governor, Legislature, and State Treasurer for credit to the Property Tax Credit Cash Fund.
Community-Based Energy Development (C-BED) Projects ( LB 412 – Operative August 30, 2015)
To be eligible for the sales and use tax exemption for sales tax paid in building a C-BED project, the county in which the project is located must have zoning regulations that require planning commission or county board approval for the project.
Purchases by Aquariums and Zoos ( LB 419 – Operative January 1, 2016)
Nationally accredited aquariums and zoos operated by public entities or nonprofits are exempt from sales tax on their purchases.
Admissions to Aquariums and Zoos ( LB 419 – Operative January 1, 2016)
Admissions to nationally accredited aquariums and zoos operated by public entities or nonprofits are exempt from sales tax. This exemption includes memberships to the aquariums or zoos. Other sales made by nationally accredited aquariums and zoos, like concessions, remain subject to sales tax.
Tax Incentives
Angel Investment Tax Credits Increased ( LB 156 – Operative May 28, 2015)
The maximum amount of Angel Investment Tax Credits that the Director of the Department of Economic Development can authorize was increased from $3 million to $4 million per calendar year. The reporting requirements were also clarified.
Livestock Modernization Tax Credits Increased ( LB 175 – Operative May 28, 2015)
Under the Nebraska Advantage Rural Development Act, livestock modernization projects were expanded to include dairy and egg production facilities. The maximum credit for a livestock modernization project was increased from $30,000 to $150,000, and the total credit pool authorized for all Nebraska Advantage Rural Development projects was increased from the previous $1 million limit. Under the bill, the total for all projects other than livestock modernization projects is limited to $1 million and the total for all livestock modernization projects is limited to $500,000 in calendar year 2016; $750,000 in calendar years 2017 and 2018; and $1 million in calendar year 2019 and thereafter.
Definition of Microbusiness Expanded ( LB 246 – Operative August 30, 2015)
The bill allows farm and ranch operations to be considered microbusinesses if the person actively engaged in the business has a net worth of up to $500,000, an increase from the previous limit of $350,000.
No Interest on Refunds under the Renewable Energy Tax Credit or the Nebraska Historic Tax Credit (Nebraska Job Creation and Mainstreet Revitalization Act) ( LB 261 – Operative March 6, 2015)
Interest will not be paid on refunds made under either of these tax credit programs. This includes amended returns.
Sunsets for Tax Incentive Programs ( LB 538 – Operative August 30, 2015)
This bill changed or established sunset dates for several tax incentive programs as follows:
Tax Incentive LB 538 Sunset Previous Sunset Beginning Farmer Tax Credit Dec. 31, 2019 None Nebraska Advantage Act Tier 1 Dec. 31, 2017 Dec. 31, 2017 (no change) Tier 2 Dec. 31, 2017 None Tier 3 Dec. 31, 2017 Dec. 31, 2017 (no change) Tier 4 Dec. 31, 2017 None Tier 5 Dec. 31, 2017 None Tier 6 Dec. 31, 2017 None Nebraska Advantage Microenterprise Tax Credit Act Dec. 31, 2019 Dec. 31, 2017 Nebraska Advantage Research & Development Act Dec. 31, 2019 Dec. 31, 2017 Nebraska Advantage Rural Development Act Dec. 31, 2019 None Nebraska Historic Tax Credit Dec. 31, 2019 Dec. 31, 2018 New Markets Tax Credit Dec. 31, 2019 None
New Markets Tax Credit ( LB 559 – Operative May 28, 2015)
A new markets tax credit used to offset insurance premium tax is considered a payment of insurance premium tax. Consequently, this amount is also allowed as a credit against an insurance company's corporation income tax.
Lottery/Charitable Gaming/Athletic Commission
Allow Financial Institutions to Conduct Gift Enterprises ( LB 160 – Operative August 30, 2015)
The bill allows banks, savings banks, building and loan associations, and savings and loan associations to conduct gift enterprises as a promotional activity.
Professional Wrestling ( LB 291 – Operative May 27, 2015)
Professional wrestling was removed from the jurisdiction of the Athletic Commission.
Distribution of Lottery Proceeds for Education ( LB 519 – Operative August 30, 2015)
This bill establishes the funding allocation for lottery proceeds transferred to the Nebraska Education Improvement Fund in fiscal years 2016–17 through 2020–21. Beginning July 1, 2016, after retaining 10% of the revenue in the fund, the remaining lottery proceeds for education will be allocated as follows:
- 62% to the Nebraska Opportunity Grant Fund;
- 17% to the state Board of Education for competitive innovation grants;
- 9% to the Community College Gap Assistance Program;
- 8% to the Excellence in Teaching Cash Fund;
- 3% to the Learning Innovation Grant Program; and
- 1% to the state Department of Education for the Expanded Learning Opportunity Grant Program Act.
Miscellaneous
Revenue Volatility Report ( LB 33 – Operative August 30, 2015)
The bill requires the Legislative Fiscal Office to prepare a report by November 15, 2016 and every two years thereafter that describes and estimates the volatility of all revenue streams that make up the state General Fund.
Restrict Transfers of Trust Property ( LB 72 – Operative August 30, 2015)
Trustees cannot transfer property under the terms of a trust until after any obligations under Medicaid estate recovery reimbursement have been satisfied. Also, petitions for determination of the inheritance tax must include notification to the Department of Health and Human Services if the decedent was over 55 years of age and resided in a health care institution.
Sports Arena Facilities Financing ( LB 170 – Operative August 30, 2015)
The bill addresses the turnback revenue certified and transferred quarterly under the Sports Arena Facility Financing Assistance Act. Not only will the 70% of amount transferred be appropriated to the municipality on a quarterly basis, but the remaining 30% will also be transferred to the Civic and Community Center Financing Fund quarterly.
Service of Summons for Garnishment on a Financial Institution ( LB 195 – Operative January 1, 2016)
A bank, savings bank, building and loan association, savings and loan association, or credit union with its main office in Nebraska may designate that main office as the proper address for service of summons for garnishment proceedings.
Generalize Information-sharing with Law Enforcement Authorities ( LB 261 – Operative March 6, 2015)
The Tax Commissioner is now allowed to share tax information with law enforcement or other taxing agencies regardless of tax program, unless disclosure is otherwise prohibited by law.
Nameplate Capacity Tax ( LB 424 – Operative January 1, 2016)
The Nameplate Capacity Tax is now applicable to solar, biomass, and landfill gas renewable energy projects installed after January 1, 2016 which have a nameplate capacity of 100 kilowatts or more. These projects are also exempt from personal property tax beginning January 1, 2016. Customergenerators will also pay the Nameplate Capacity Tax in lieu of personal property tax.
Motor Fuels Tax Rate Increased ( LB 610 – Operative August 30, 2015)
Beginning January 1, 2016 the fixed motor fuels tax will increase by 1½ cents per gallon. The fixed tax will increase an additional 1½ cents per gallon each following January 1 through 2019, for a total increase of 6 cents per gallon. One-half cent of each incremental increase is deposited in the Highway Cash Fund for use in funding state highway projects, and one cent is credited to the Highway Allocation Fund for distribution equally to cities and counties.
