Nebraska2026Did Not Pass
LB1037
LB1037: Rules for Tobacco Tax Refunds and Tribal Negotiations
Last scannedAug 25, 2026, 3:18 AM
In one sentence
This bill sets rules for getting refunds on tobacco taxes paid in exempt sales and requires the Governor to negotiate with federally recognized tribes about collecting these taxes.
What it does
- Allows people who paid tax on cigarettes sold in exempt transactions, such as those to tribal members on Indian country or federal installations, to apply for a refund from the Tax Commissioner.
- Permits the Tax Commissioner and an Indian tribe to agree on a specific formula for calculating refunds instead of processing individual applications.
- Requires the Governor or their representative to negotiate in good faith with federally recognized tribes about collecting tobacco taxes if the tribe requests it in writing.
- Sets rules that negotiations must start within 60 days, happen at least once every 90 days while active, and cannot be stopped just because a tribe regulates cannabis.
- Mandates that any agreement between the state and a tribe includes details on tax collection, how money is split, dispute resolution, auditing, and sovereign immunity waivers.
Who it affects
- Federally recognized Indian tribes within Nebraska
- The Governor of Nebraska or their designated representative
- The Tax Commissioner
- People who buy cigarettes in exempt transactions on tribal land
Limits and unknowns
- The bill text provided ends abruptly in Section 3, so the full details regarding tribal stamps are not visible.
- While negotiations must happen in good faith, the Governor has the choice whether or not to sign a final agreement.
Plain language
Terms to know
- Exempt transaction
- A sale where state tax does not apply, such as cigarette sales to tribal members on Indian country or sales on federal installations.
- Indian country
- Land owned by a federally recognized Indian tribe within the state of Nebraska.
Official record
Sources
Official summary
Change provisions relating to negotiations and agreements between the Governor and federally recognized Indian Tribes relating to the collection and dissemination of any cigarette tax or certain other tobacco products tax collected on sales of such products made or sold on a federal recognized Indian tribe’s Indian country
Official activity
Bill history
- Indefinitely postponed