2013 Nebraska Legislative Changes
Income Tax
Internal Revenue Code Update (
LB 24 – Operative Date: March 8, 2013)
References to the federal Internal Revenue Code in Nebraska statutes refer to the federal Internal Revenue Code as it existed on March 7, 2013, except in the statutory provisions relating to individual and business income taxation.
Changes to the Nebraska College Savings Plan ( LB 296 – Operative Date: January 1, 2014)
Increase Contribution Limitations – The maximum contribution amounts to eligible Nebraska college savings plan accounts which may be excluded from Nebraska income tax were increased from $2,500 to $5,000 for a married, filing separately return, and from $5,000 to $10,000 for all other returns.
Contributions by Custodians – Contributions by a custodian of a minor's custodial account, who is also a parent or guardian of the minor, are eligible for the contribution deduction.
Qualified Rollovers from Another State – A qualified rollover from another state's plan, including any interest and earnings, can qualify for the contribution deduction.
Successor in Interest – If an account owner dies or becomes legally incapacitated without naming a successor account owner, the account beneficiary becomes the account owner.
Elimination of the Alternative Minimum Tax ( LB 308 – Operative Date: January 1, 2014)
The alternative minimum tax was repealed for taxable years beginning on or after January 1, 2014, for Nebraska individuals and estates and trusts. The tax on premature or lump-sum distributions from qualified retirement plans is retained.
20-Year Net Operating Loss Carryforward ( LB 308 – Operative Date: January 1, 2014)
A net operating loss for a corporation may be carried forward to each of the 20 taxable years, following the year of loss, for net operating losses incurred in taxable years beginning on or after January 1, 2014. Previously, the carryforward period was five taxable years. The carryforward period for capital losses remains five taxable years following the year of the loss.
Special Capital Gains Exclusion ( LB 573 – Operative Date: January 1, 2014)
Individual participants in an employee stock ownership trust under IRC § 401(a), including an employee stock ownership plan (ESOP), are considered separate shareholders for purposes of the income tax exclusion set forth in Neb. Rev. Stat. § 77-2715.09.
Sales and Use Taxes
Net Metering of Electricity ( LB 90 – Operative Date: October 1, 2013)
A customer generator's electricity production will be netted against their electricity consumption for the purpose of determining the customer generator's sales tax liability. Previously, a customer generator's electricity sales to the utility and purchases from the utility were considered separate transactions and were not netted for purposes of sales tax.
Local Sales Tax ( LB 104 – Operative Date: June 6, 2013)
A city of the metropolitan class (i.e., Omaha) may not impose a local sales tax above 1.5%. A municipality other than a city of the metropolitan class may still impose a local sales tax of 1.75% or 2.0% if the rate increase is approved by at least 70% of the municipality’s governing board and by a vote of the voters residing in the municipality.
Sales Tax on Liquor Sales from Out-of-State Retailers ( LB 230 – Operative Date: September 6, 2013)
Any craft brewer, craft distillery, farm winery, or direct retailer shipping alcoholic beverages into Nebraska must obtain a shipper's license from the Nebraska Liquor Control Commission and use a common carrier approved by the Liquor Control Commission. There are a number of other restrictions on direct shipments, including volume limits and a requirement that a responsible adult accept receipt.
Shipping into Nebraska is deemed nexus for sales tax purposes and the shipper must collect and remit sales tax and obtain a Nebraska sales tax permit. A sales tax permit is obtained by filing a Nebraska Tax Application, Form 20, with the Nebraska Department of Revenue.
Tax Incentives
Renewable Energy Projects ( LB 104 – Operative Date: June 6, 2013)
A business that produces electricity for sale by using renewable energy resources may qualify for the Nebraska Advantage Act tax incentive benefits. A project may qualify under Tier 5 with a minimum investment in qualified property of $20 million and the maintenance of employment at the renewable energy project. A renewable energy project may also be included in a project for any other tier, by meeting the applicable investment and employment thresholds for that tier. Sources of renewable energy include, but are not limited to: wind, solar, geothermal, hydroelectric, biomass, and transmutation of elements.
Changes to the Nebraska Advantage Act ( LB 34 – Operative Date: September 6, 2013)
Salaried Employees – A salaried employee is deemed to have been paid for 40 hours per week during the pay period.
Definition of Taxpayer – A taxpayer is any person or entity subject to sales and use tax and subject to income tax withholding, but does not include a political subdivision.
Definition of Year – A year is defined as a calendar year. Previously, a year was defined as the taxable year of the taxpayer.
Definition of Year and Credit Usage – With the change of a year to a calendar year, credits may be used beginning with the taxable year which includes December 31 of the year the required minimum levels were reached. The last year for which credits may be used is the taxable year which includes December 31 of the last year of the carryover period.
180-Day Application Review – The Tax Commissioner must approve or deny an application under the Nebraska Advantage Act within 180 days of receiving the application. The 180 days does not include days the Tax Commissioner is waiting on a response from the applicant.
180-Day Notice of an Agreement – The Tax Commissioner must mail an agreement to a taxpayer within 180 days after approval of an application. The 180 days does not include days the Tax Commissioner is waiting on a response from the applicant.
Confidentiality of Transferred Projects – The Department may disclose information to a project-acquiring taxpayer about the project and prior benefits to the extent that it is reasonably necessary for the acquiring-taxpayer to determine the future incentives and liabilities of the project.
Change to the Annual Report – The Department is no longer required to annually report on the total number of employees employed in the state on the last day of the calendar quarter prior to the application date, or the total number of employees employed in the state on subsequent reporting.
Annual Tax Incentive Report ( LB 612 – Operative Date: April 25, 2013)
The Department must annually appear before the Appropriations and Revenue Committees by September 1 to present the Tax Incentive Report.
Lottery/Charitable Gaming/Athletic Commission
Nebraska Commission on Problem Gambling ( LB 6 – Operative Date: July 1, 2013)
The Nebraska Commission on Problem Gambling (Commission) and Gamblers Assistance Program was created. The Commission, located in the Charitable Gaming Division of the Nebraska Department of Revenue, is composed of a nine-member board appointed by the Governor. The State Committee on Problem Gambling was terminated.
Athletic Advisory Committee ( LB 78 – Operative Date: September 6, 2013)
The Athletic Advisory Committee will be eliminated.
Miscellaneous
New Rules and Regulations ( LB 242 – Operative Date: September 6, 2013)
When legislation specifically requires a state agency to adopt regulations, a state agency must promulgate the rules and regulations that are required to implement the legislation within three years after the legislation was enacted. A state agency may not enforce any rule or regulation or proposed rule or regulation unless the rule, regulation, or proposed rule or regulation has been approved by the Governor and filed with the Secretary of State after a hearing pursuant to Neb. Rev. Stat. § 84-907.
Public Records Requests ( LB 363 – Operative Date: September 6, 2013)
The fee that is charged by a state agency to fulfill a public records disclosure request may include technology costs and may include personnel costs only to the extent the time spent exceeds four hours, not counting the time of any agency attorneys reviewing whether the request can be fulfilled. An estimate of the costs to fulfill the request must be provided to the requester within four business days after the request. A requester has 10 business days to accept the fee estimate provided by a state agency or reject or amend a record request to reduce the costs associated with the request.
Tax Expenditure Report ( LB 612 – Operative Date: April 25, 2013)
The Department must appear before the Appropriations and Revenue Committees by December 1 of every even-numbered year to present the Tax Expenditure Report.
Tax Burden Study ( LB 612 – Operative Date: April 25, 2013)
The due date of the Tax Burden Study was changed from December of of every odd-numbered year to November 1 of every odd-numbered year.
