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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1244
Introduced by Murman, 38; at the request of the Governor.
Read first time January 21, 2026
Committee: Revenue
A BILL FOR AN ACT relating to revenue and taxation; to amend section1
77-2701.47, Reissue Revised Statutes of Nebraska, sections 77-382,2
77-2704.36, 77-2912, and 77-3005, Revised Statutes Cumulative3
Supplement, 2024, and sections 77-2701.16 and 77-2716, Revised4
Statutes Supplement, 2025; to eliminate certain sales and use tax5
exemptions and impose sales and use taxes on certain services; to6
change the Mechanical Amusement Device Tax Act and the Tax7
Expenditure Reporting Act as prescribed; to change provisions8
relating to the Nebraska Job Creation and Mainstreet Revitalization9
Act; to harmonize provisions; to provide an operative date; to10
repeal the original sections; to outright repeal sections11
77-2704.55, 77-2704.60, and 77-2704.67, Reissue Revised Statutes of12
Nebraska, and section 77-2704.66, Revised Statutes Cumulative13
Supplement, 2024; and to declare an emergency.14
Be it enacted by the people of the State of Nebraska,15
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Section 1. Section 77-382, Revised Statutes Cumulative Supplement,1
2024, is amended to read: 2
77-382 (1) The department shall prepare a tax expenditure report3
describing (a) the basic provisions of the Nebraska tax laws, (b) the4
actual or estimated revenue loss caused by the exemptions, deductions,5
exclusions, deferrals, credits, and preferential rates in effect on July6
1 of each year and allowed under Nebraska's tax structure and in the7
property tax, (c) the actual or estimated revenue loss caused by failure8
to impose sales and use tax on services purchased for nonbusiness use,9
and (d) the elements which make up the tax base for state and local10
income, including income, sales and use, property, and miscellaneous11
taxes. 12
(2) The department shall review the major tax exemptions for which13
state general funds are used to reduce the impact of revenue lost due to14
a tax expenditure. The report shall indicate an estimate of the amount of15
the reduction in revenue resulting from the operation of all tax16
expenditures. The report shall list each tax expenditure relating to17
sales and use tax under the following categories: 18
(a) Agriculture, which shall include a separate listing for the19
following items: Agricultural machinery; agricultural chemicals; seeds20
sold to commercial producers; water for irrigation and manufacturing;21
commercial artificial insemination; mineral oil as dust suppressant;22
animal specialty services and veterinary services performed on livestock23
as defined in section 54-183 grooming; oxygen for use in aquaculture;24
animal life whose products constitute food for human consumption; and25
grains; 26
(b) Business across state lines, which shall include a separate27
listing for the following items: Property shipped out-of-state;28
fabrication labor for items to be shipped out-of-state; property to be29
transported out-of-state; property purchased in other states to be used30
in Nebraska; aircraft delivery to an out-of-state resident or business;31
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state reciprocal agreements for industrial machinery; and property taxed1
in another state; 2
(c) Common carrier and logistics, which shall include a separate3
listing for the following items: Common Railroad rolling stock and repair4
parts and services; common or contract carriers and repair parts and5
services; common or contract carrier accessories ; and common or contract6
carrier safety equipment; 7
(d) Consumer goods, which shall include a separate listing for the8
following items: Motor vehicles and motorboat trade-ins; merchandise9
trade-ins; certain medical equipment and medicine; newspapers;10
laundromats; telefloral deliveries; motor vehicle discounts for the11
disabled; and political campaign fundraisers; 12
(e) Energy, which shall include a separate listing for the following13
items: Motor fuels; energy used in industry; energy used in agriculture;14
aviation fuel; and minerals, oil, and gas severed from real property;15
(f) Food, which shall include a separate listing for the following16
items: Food for home consumption; Supplemental Nutrition Assistance17
Program; school lunches; meals sold by hospitals; meals sold by18
institutions at a flat rate; food for the elderly, handicapped, and19
Supplemental Security Income recipients; and meals sold by churches;20
(g) General business, which shall include a separate listing for the21
following items: Component and ingredient parts; manufacturing machinery;22
containers; film rentals; molds and dies; syndicated programming;23
intercompany sales; intercompany leases; sale of a business or farm24
machinery; and transfer of property in a change of business ownership;25
(h) Lodging and shelter, which shall include a separate listing for26
the following item: Room rentals by certain institutions;27
(i) Miscellaneous, which shall include a separate listing for the28
following items: Cash discounts and coupons; separately stated finance29
charges; casual sales; lease-to-purchase agreements; and separately30
stated taxes; 31
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(j) Nonprofits, governments, and exempt entities, which shall1
include a separate listing for the following items: Purchases by2
political subdivisions of the state; purchases by churches and nonprofit3
colleges and medical facilities; purchasing agents for public real estate4
construction improvements; contractor as purchasing agent for public5
agencies; Nebraska lottery; admissions to school events; sales on Native6
American Indian reservations; school-supporting fundraisers; fine art7
purchases by a museum; purchases by the Nebraska State Fair Board;8
purchases by the Nebraska Investment Finance Authority and licensees of9
the State Racing and Gaming Commission; purchases by the United States10
Government; public records; and sales by religious organizations;11
(k) Recent sales tax expenditures, which shall include a separate12
listing for each sales tax expenditure created by statute or rule and13
regulation after July 19, 2012; 14
(l) Services purchased for nonbusiness use, which shall include a15
separate listing for each such service, including, but not limited to,16
the following items: Cleaning Motor vehicle cleaning, maintenance, and17
repair services; cleaning and repair of clothing; cleaning, maintenance,18
and repair of other tangible personal property; maintenance, painting,19
and repair of real property; entertainment admissions; hair care and hair20
removal services personal care services; lawn care, gardening, and21
landscaping services; pet-related services; storage and moving services;22
household utilities; other personal services; taxi, limousine, and other23
transportation services; legal services; accounting services; veterinary24
services; other professional services; and other real estate services;25
and 26
(m) Telecommunications, which shall include a separate listing for27
the following items: Prepaid Telecommunications access charges; prepaid28
calling arrangements ; conference bridging services; and nonvoice data29
services. 30
(3) It is the intent of the Legislature that nothing in the Tax31
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Expenditure Reporting Act shall cause the valuation or assessment of any1
property exempt from taxation on the basis of its use exclusively for2
religious, educational, or charitable purposes. 3
Sec. 2. Section 77-2701.16, Revised Statutes Supplement, 2025, is4
amended to read: 5
77-2701.16 (1) Gross receipts means the total amount of the sale or6
lease or rental price, as the case may be, of the retail sales of7
retailers. 8
(2) Gross receipts of every person engaged as a public utility9
specified in this subsection, as a community antenna television service10
operator, or as a satellite service operator or any person involved in11
connecting and installing services defined in subdivision (2)(a), (b), or12
(d) of this section means: 13
(a)(i) In the furnishing of telephone communication service, other14
than mobile telecommunications service as described in section15
77-2703.04, the gross income received from furnishing ancillary services,16
except for conference bridging services, and intrastate17
telecommunications services, except for value-added, nonvoice data18
service. 19
(ii) In the furnishing of mobile telecommunications service as20
described in section 77-2703.04, the gross income received from21
furnishing mobile telecommunications service that originates and22
terminates in the same state to a customer with a place of primary use in23
Nebraska; 24
(b) In the furnishing of telegraph service, the gross income25
received from the furnishing of intrastate telegraph services;26
(c)(i) In the furnishing of gas, sewer, water, and electricity27
service, other than electricity service to a customer-generator as28
defined in section 70-2002, the gross income received from the furnishing29
of such services upon billings or statements rendered to consumers for30
such utility services. 31
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(ii) In the furnishing of electricity service to a customer-1
generator as defined in section 70-2002, the net energy use upon billings2
or statements rendered to customer-generators for such electricity3
service; 4
(d) In the furnishing of community antenna television service or5
satellite service, the gross income received from the furnishing of such6
community antenna television service as regulated under sections 18-22017
to 18-2205 or 23-383 to 23-388 or satellite service; and8
(e) The gross income received from the provision, installation,9
construction, servicing, or removal of property used in conjunction with10
the furnishing, installing, or connecting of any public utility services11
specified in subdivision (2)(a) or (b) of this section or community12
antenna television service or satellite service specified in subdivision13
(2)(d) of this section, except when acting as a subcontractor for a14
public utility, this subdivision does not apply to the gross income15
received by a contractor electing to be treated as a consumer of building16
materials under subdivision (2) or (3) of section 77-2701.10 for any such17
services performed on the customer's side of the utility demarcation18
point. This subdivision also does not apply to: 19
(i) The gross income received by a political subdivision of the20
state, an electric cooperative, or an electric membership association for21
the lease or use of, or by a contractor for the construction of or22
services provided on, electric generation, transmission, distribution, or23
street lighting structures or facilities owned by a political subdivision24
of the state, an electric cooperative, or an electric membership25
association; or 26
(ii) The gross income received for the lease or use of towers or27
other structures and equipment, including antennas and studio transmitter28
link systems, primarily used in conjunction with the furnishing of (A)29
Internet access services, (B) agricultural global positioning system30
locating services, or (C) over-the-air radio and television broadcasting31
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via radio and television broadcast stations licensed by the Federal1
Communications Commission. For purposes of this subdivision, studio2
transmitter link system means a radiofrequency apparatus which serves as3
a conduit to deliver station programming content from its origin in a4
studio to a broadcast transmitter and antenna. 5
(3) Gross receipts of every person engaged in selling, leasing, or6
otherwise providing intellectual or entertainment property means:7
(a) In the furnishing of computer software, the gross income8
received, including the charges for coding, punching, or otherwise9
producing any computer software and the charges for the tapes, disks,10
punched cards, or other properties furnished by the seller; and11
(b) In the furnishing of videotapes, movie film, satellite12
programming, satellite programming service, and satellite television13
signal descrambling or decoding devices, the gross income received from14
the license, franchise, or other method establishing the charge.15
(4) Gross receipts for providing a service means:16
(a) The gross income received for building cleaning and maintenance,17
pest control, and security; 18
(b) The gross income received for motor vehicle washing, waxing,19
towing, and painting; 20
(c) The gross income received for computer software training;21
(d) The gross income received for installing and applying tangible22
personal property if the sale of the property is subject to tax. If any23
or all of the charge for installation is free to the customer and is paid24
by a third-party service provider to the installer, any tax due on that25
part of the activation commission, finder's fee, installation charge, or26
similar payment made by the third-party service provider shall be paid27
and remitted by the third-party service provider; 28
(e) The gross income received for services of recreational vehicle29
parks; 30
(f) The gross income received for labor for repair or maintenance31
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services performed with regard to tangible personal property the sale of1
which would be subject to sales and use taxes, excluding motor vehicles,2
except as otherwise provided in section 77-2704.26 or 77-2704.50;3
(g) The gross income received for animal specialty services and4
animal grooming services except (i) veterinary services and , (ii)5
specialty services or animal grooming services performed on livestock as6
defined in section 54-183 , and (iii) animal grooming performed by a7
licensed veterinarian or a licensed veterinary technician in conjunction8
with medical treatment; and 9
(h) The gross income received for detective services; .10
(i) The gross income received for bail bonding services;11
(j) The gross income received for providing chartered flights;12
(k) The gross income received for check and debt collection13
services; 14
(l) The gross income received for the cleaning of clothing,15
excluding any amounts exempt pursuant to section 77-2704.14;16
(m) The gross income received for conference bridging services;17
(n) The gross income received for providing credit information;18
(o) The gross income received for data processing services;19
(p) The gross income received for dating services;20
(q) The gross income received for services provided by employment21
agencies; 22
(r) The gross income received for financial reporting services;23
(s) The gross income received for fishing and hunting guide24
services; 25
(t) The gross income received for interior design and decorating26
services; 27
(u) The gross income received for interstate telephone and telegraph28
services; 29
(v) The gross income received for investment advising services;30
(w) The gross income received for labor to repair intrastate and31
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interstate vessels and railroad rolling stock; 1
(x) The gross income received for land surveying services;2
(y) The gross income received for loan broker fees;3
(z) The gross income received for lobbying and consulting services;4
(aa) The gross income received for local passenger transportation by5
chartered road vehicles, including limousines and similar luxury6
vehicles; 7
(bb) The gross income received for local taxi services;8
(cc) The gross income received for mainframe computer access and9
processing services; 10
(dd) The gross income received for motor vehicle cleaning and repair11
services; 12
(ee) The gross income received for nail care services, except for13
any such services that are part of a course of medical treatment and are14
provided by or under the care or supervision of a licensed health care15
practitioner or in a licensed health care facility;16
(ff) The gross income received for personal instruction services for17
dance, golf, or tennis; 18
(gg) The gross income received for public relations and management19
consulting services; 20
(hh) The gross income received from purchases by licensees of the21
State Racing and Gaming Commission; 22
(ii) The gross income received for real estate management fees;23
(jj) The gross income received for secretarial and court reporting24
services; 25
(kk) The gross income received for seismograph and geophysical26
services; 27
(ll) The gross income received for shoeshine services;28
(mm) The gross income received for sightseeing services by ground29
vehicles; 30
(nn) The gross income received for skin care services, except for31
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any such services that are part of a course of medical treatment and are1
provided by or under the care or supervision of a licensed health care2
practitioner or in a licensed health care facility;3
(oo) The gross income received for social escort services;4
(pp) The gross income from storage and moving services;5
(qq) The gross income received for tattoo and body modification6
services, except for any such services that are part of a course of7
medical treatment and are provided by or under the care or supervision of8
a licensed health care practitioner or in a licensed health care9
facility; 10
(rr) The gross income received for telefloral delivery services11
defined as amounts received by florists in this state who make deliveries12
in this state pursuant to instructions received from florists in other13
states; 14
(ss) The gross income received for telemarketing services;15
(tt) The gross income received for telephone answering services;16
(uu) The gross income received for test laboratory services, except17
for medical test laboratory services; 18
(vv) The gross income received for tour operator services;19
(ww) The gross income received for travel agency services;20
(xx) The gross income received for water well drilling services;21
(yy) The gross income received for wedding planning services; and22
(zz) The gross income received for weight loss services, except for23
any such services that are part of a course of medical treatment and are24
provided by or under the care or supervision of a licensed health care25
practitioner or in a licensed health care facility.26
(5) Gross receipts includes the sale of admissions. When an27
admission to an activity or a membership constituting an admission is28
combined with the solicitation of a contribution, the portion or the29
amount charged representing the fair market price of the admission shall30
be considered a retail sale subject to the tax imposed by section31
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77-2703. The organization conducting the activity shall determine the1
amount properly attributable to the purchase of the privilege, benefit,2
or other consideration in advance, and such amount shall be clearly3
indicated on any ticket, receipt, or other evidence issued in connection4
with the payment. 5
(6) Gross receipts includes the sale of live plants incorporated6
into real estate except when such incorporation is incidental to the7
transfer of an improvement upon real estate or the real estate.8
(7) Gross receipts includes the sale of any building materials9
annexed to real estate by a person electing to be taxed as a retailer10
pursuant to subdivision (1) of section 77-2701.10.11
(8) Gross receipts includes the sale of and recharge of prepaid12
calling service and prepaid wireless calling service.13
(9) Gross receipts includes the retail sale of digital audio works,14
digital audiovisual works, digital codes, and digital books delivered15
electronically if the products are taxable when delivered on tangible16
storage media. A sale includes the transfer of a permanent right of use,17
the transfer of a right of use that terminates on some condition, and the18
transfer of a right of use conditioned upon the receipt of continued19
payments. 20
(10) Gross receipts includes any receipts from sales of tangible21
personal property made over a multivendor marketplace platform that acts22
as the intermediary by facilitating sales between a seller and the23
purchaser and that, either directly or indirectly through agreements or24
arrangements with third parties, collects payment from the purchaser and25
transmits payment to the seller. 26
(11) Gross receipts does not include: 27
(a) The amount of any rebate granted by a motor vehicle or motorboat28
manufacturer or dealer at the time of sale of the motor vehicle or29
motorboat, which rebate functions as a discount from the sales price of30
the motor vehicle or motorboat; or 31
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(b) The price of property or services returned or rejected by1
customers when the full sales price is refunded either in cash or credit.2
Sec. 3. Section 77-2701.47, Reissue Revised Statutes of Nebraska, is3
amended to read: 4
77-2701.47 (1) Manufacturing machinery and equipment means any5
machinery or equipment purchased, leased, or rented by a person engaged6
in the business of manufacturing for use in manufacturing, including, but7
not limited to: 8
(a) Machinery or equipment for use in manufacturing to produce,9
fabricate, assemble, process, finish, refine, or package tangible10
personal property; 11
(b) Machinery or equipment for use in transporting, conveying,12
handling, or storing by the manufacturer the raw materials or components13
to be used in manufacturing or the products produced by the manufacturer;14
(c) Molds and dies and the materials necessary to create molds and15
dies for use in manufacturing that determine the physical characteristics16
of the finished product or its packaging material, whether or not such17
molds or dies are permanent or temporary in nature, and including any18
chemicals, solutions, or catalysts utilized in the mold or die process19
even if such items are consumed during the course of the mold or die20
process; 21
(c) (d) Machinery or equipment for use in manufacturing to maintain22
the integrity of the product or to maintain unique environmental23
conditions required for either the product or the machinery and equipment24
used in manufacturing by a manufacturer; 25
(d) (e) Testing equipment for use in manufacturing to measure the26
quality of the finished product; 27
(e) (f) Computers, software, and related peripheral equipment for28
use in manufacturing to guide, control, operate, or measure the29
manufacturing process; 30
(f) (g) Machinery or equipment for use in manufacturing to produce31
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steam, electricity, or chemical catalysts and solutions that are1
essential to the manufacturing process even if such produced items are2
consumed during the course of the manufacturing process or do not become3
necessary or integral parts of the finished product; and4
(g) (h) A repair or replacement part or accessory purchased for use5
in maintaining, repairing, or refurbishing machinery and equipment used6
in manufacturing. 7
(2) Manufacturing machinery and equipment does not include: Vehicles8
required to be registered for operation on the roads and highways of this9
state; hand tools; office equipment; and computers, software, and related10
peripheral equipment not used in guiding, controlling, operating, or11
measuring of the manufacturing process. Machinery or equipment does not12
need to come into direct physical contact with any of the raw materials,13
components, or products that are part of the manufacturing process to be14
considered manufacturing machinery or equipment. 15
Sec. 4. Section 77-2704.36, Revised Statutes Cumulative Supplement,16
2024, is amended to read: 17
77-2704.36 (1) Sales and use tax shall not be imposed on the gross18
receipts from the sale, lease, or rental of depreciable : (a) Depreciable19
agricultural machinery and equipment purchased, leased, or rented on or20
after January 1, 1993, for use in commercial agriculture. ; or21
(b) Net wrap, baling wire, and twine purchased for use in commercial22
agriculture. 23
(2) For purposes of this section: 24
(a) (a)(i) Agricultural machinery and equipment means tangible25
personal property that is used directly in (i) (A) cultivating or26
harvesting a crop, (ii) (B) raising or caring for animal life, (iii) (C)27
protecting the health and welfare of animal life, including fans,28
curtains, and climate control equipment within livestock buildings, or29
(iv) (D) collecting or processing an agricultural product on a farm or30
ranch, regardless of the degree of attachment to any real property; and31
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(b) (ii) Agricultural machinery and equipment includes, but is not1
limited to, header trailers, head haulers, header transports, and seed2
tender trailers and excludes any current tractor model as defined in3
section 2-2701.01 not permitted for sale in Nebraska pursuant to sections4
2-2701 to 2-2711. ; 5
(b) Baling wire means wire used in the baling of livestock feed or6
bedding; 7
(c) Net wrap means plastic wrap used in the baling of livestock feed8
or bedding; and 9
(d) Twine means a strong string of two or more strands twisted10
together used in the baling of livestock feed or bedding.11
Sec. 5. Section 77-2716, Revised Statutes Supplement, 2025, is12
amended to read: 13
77-2716 (1) The following adjustments to federal adjusted gross14
income or, for corporations and fiduciaries, federal taxable income shall15
be made for interest or dividends received: 16
(a)(i) There shall be subtracted interest or dividends received by17
the owner of obligations of the United States and its territories and18
possessions or of any authority, commission, or instrumentality of the19
United States to the extent includable in gross income for federal income20
tax purposes but exempt from state income taxes under the laws of the21
United States; and 22
(ii) There shall be subtracted interest received by the owner of23
obligations of the State of Nebraska or its political subdivisions or24
authorities which are Build America Bonds to the extent includable in25
gross income for federal income tax purposes; 26
(b) There shall be subtracted that portion of the total dividends27
and other income received from a regulated investment company which is28
attributable to obligations described in subdivision (a) of this29
subsection as reported to the recipient by the regulated investment30
company; 31
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(c) There shall be added interest or dividends received by the owner1
of obligations of the District of Columbia, other states of the United2
States, or their political subdivisions, authorities, commissions, or3
instrumentalities to the extent excluded in the computation of gross4
income for federal income tax purposes except that such interest or5
dividends shall not be added if received by a corporation which is a6
regulated investment company; 7
(d) There shall be added that portion of the total dividends and8
other income received from a regulated investment company which is9
attributable to obligations described in subdivision (c) of this10
subsection and excluded for federal income tax purposes as reported to11
the recipient by the regulated investment company; and12
(e)(i) Any amount subtracted under this subsection shall be reduced13
by any interest on indebtedness incurred to carry the obligations or14
securities described in this subsection or the investment in the15
regulated investment company and by any expenses incurred in the16
production of interest or dividend income described in this subsection to17
the extent that such expenses, including amortizable bond premiums, are18
deductible in determining federal taxable income. 19
(ii) Any amount added under this subsection shall be reduced by any20
expenses incurred in the production of such income to the extent21
disallowed in the computation of federal taxable income.22
(2) There shall be allowed a net operating loss derived from or23
connected with Nebraska sources computed under rules and regulations24
adopted and promulgated by the Tax Commissioner consistent, to the extent25
possible under the Nebraska Revenue Act of 1967, with the laws of the26
United States. For a resident individual, estate, or trust, the net27
operating loss computed on the federal income tax return shall be28
adjusted by the modifications contained in this section. For a29
nonresident individual, estate, or trust or for a partial-year resident30
individual, the net operating loss computed on the federal return shall31
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be adjusted by the modifications contained in this section and any1
carryovers or carrybacks shall be limited to the portion of the loss2
derived from or connected with Nebraska sources. 3
(3) There shall be subtracted from federal adjusted gross income for4
all taxable years beginning on or after January 1, 1987, the amount of5
any state income tax refund to the extent such refund was deducted under6
the Internal Revenue Code, was not allowed in the computation of the tax7
due under the Nebraska Revenue Act of 1967, and is included in federal8
adjusted gross income. 9
(4) Federal adjusted gross income, or, for a fiduciary, federal10
taxable income shall be modified to exclude the portion of the income or11
loss received from a small business corporation with an election in12
effect under subchapter S of the Internal Revenue Code or from a limited13
liability company organized pursuant to the Nebraska Uniform Limited14
Liability Company Act that is not derived from or connected with Nebraska15
sources as determined in section 77-2734.01. 16
(5) There shall be subtracted from federal adjusted gross income or,17
for corporations and fiduciaries, federal taxable income dividends18
received or deemed to be received from corporations which are not subject19
to the Internal Revenue Code. 20
(6) There shall be subtracted from federal taxable income a portion21
of the income earned by a corporation subject to the Internal Revenue22
Code of 1986 that is actually taxed by a foreign country or one of its23
political subdivisions at a rate in excess of the maximum federal tax24
rate for corporations. The taxpayer may make the computation for each25
foreign country or for groups of foreign countries. The portion of the26
taxes that may be deducted shall be computed in the following manner:27
(a) The amount of federal taxable income from operations within a28
foreign taxing jurisdiction shall be reduced by the amount of taxes29
actually paid to the foreign jurisdiction that are not deductible solely30
because the foreign tax credit was elected on the federal income tax31
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return; 1
(b) The amount of after-tax income shall be divided by one minus the2
maximum tax rate for corporations in the Internal Revenue Code; and3
(c) The result of the calculation in subdivision (b) of this4
subsection shall be subtracted from the amount of federal taxable income5
used in subdivision (a) of this subsection. The result of such6
calculation, if greater than zero, shall be subtracted from federal7
taxable income. 8
(7) Federal adjusted gross income shall be modified to exclude any9
amount repaid by the taxpayer for which a reduction in federal tax is10
allowed under section 1341(a)(5) of the Internal Revenue Code.11
(8)(a) Federal adjusted gross income or, for corporations and12
fiduciaries, federal taxable income shall be reduced, to the extent13
included, by income from interest, earnings, and state contributions14
received from the Nebraska educational savings plan trust as provided in15
sections 77-1415 to 77-1430 and any account established under the16
achieving a better life experience program as provided in sections17
77-1401 to 77-1409. 18
(b) Federal adjusted gross income or, for corporations and19
fiduciaries, federal taxable income shall be reduced by any contributions20
as a participant in the Nebraska educational savings plan trust, any21
contributions to an account established under the achieving a better life22
experience program made for the benefit of a beneficiary as provided in23
sections 77-1401 to 77-1409, or any contributions to the Give to Enable24
Support Cash Fund as provided in the Give to Enable Support Act, to the25
extent not deducted for federal income tax purposes, but not to exceed26
five thousand dollars per married filing separate return or ten thousand27
dollars for any other return. With respect to a qualified rollover within28
the meaning of section 529 of the Internal Revenue Code from another29
state's plan, any interest, earnings, and state contributions received30
from the other state's educational savings plan which is qualified under31
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section 529 of the code shall qualify for the reduction provided in this1
subdivision. For contributions by a custodian of a custodial account2
including rollovers from another custodial account, the reduction shall3
only apply to funds added to the custodial account after January 1, 2014.4
(c) For taxable years beginning or deemed to begin on or after5
January 1, 2021, under the Internal Revenue Code of 1986, as amended,6
federal adjusted gross income shall be reduced, to the extent included in7
the adjusted gross income of an individual, by the amount of any8
contribution made by the individual's employer into an account under the9
Nebraska educational savings plan trust owned by the individual, not to10
exceed five thousand dollars per married filing separate return or ten11
thousand dollars for any other return. 12
(d) Federal adjusted gross income or, for corporations and13
fiduciaries, federal taxable income shall be increased by:14
(i) The amount resulting from the cancellation of a participation15
agreement refunded to the taxpayer as a participant in the Nebraska16
educational savings plan trust to the extent previously deducted under17
subdivision (8)(b) of this section; and 18
(ii) The amount of any withdrawals by the owner of an account19
established under the achieving a better life experience program as20
provided in sections 77-1401 to 77-1409 for nonqualified expenses to the21
extent previously deducted under subdivision (8)(b) of this section.22
(9)(a) For income tax returns filed after September 10, 2001, for23
taxable years beginning or deemed to begin before January 1, 2006, under24
the Internal Revenue Code of 1986, as amended, federal adjusted gross25
income or, for corporations and fiduciaries, federal taxable income shall26
be increased by eighty-five percent of any amount of any federal bonus27
depreciation received under the federal Job Creation and Worker28
Assistance Act of 2002 or the federal Jobs and Growth Tax Act of 2003,29
under section 168(k) or section 1400L of the Internal Revenue Code of30
1986, as amended, for assets placed in service after September 10, 2001,31
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and before December 31, 2005. 1
(b) For a partnership, limited liability company, cooperative,2
including any cooperative exempt from income taxes under section 521 of3
the Internal Revenue Code of 1986, as amended, limited cooperative4
association, subchapter S corporation, or joint venture, the increase5
shall be distributed to the partners, members, shareholders, patrons, or6
beneficiaries in the same manner as income is distributed for use against7
their income tax liabilities. 8
(c) For a corporation with a unitary business having activity both9
inside and outside the state, the increase shall be apportioned to10
Nebraska in the same manner as income is apportioned to the state by11
section 77-2734.05. 12
(d) The amount of bonus depreciation added to federal adjusted gross13
income or, for corporations and fiduciaries, federal taxable income by14
this subsection shall be subtracted in a later taxable year. Twenty15
percent of the total amount of bonus depreciation added back by this16
subsection for tax years beginning or deemed to begin before January 1,17
2003, under the Internal Revenue Code of 1986, as amended, may be18
subtracted in the first taxable year beginning or deemed to begin on or19
after January 1, 2005, under the Internal Revenue Code of 1986, as20
amended, and twenty percent in each of the next four following taxable21
years. Twenty percent of the total amount of bonus depreciation added22
back by this subsection for tax years beginning or deemed to begin on or23
after January 1, 2003, may be subtracted in the first taxable year24
beginning or deemed to begin on or after January 1, 2006, under the25
Internal Revenue Code of 1986, as amended, and twenty percent in each of26
the next four following taxable years. 27
(10) For taxable years beginning or deemed to begin on or after28
January 1, 2003, and before January 1, 2006, under the Internal Revenue29
Code of 1986, as amended, federal adjusted gross income or, for30
corporations and fiduciaries, federal taxable income shall be increased31
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by the amount of any capital investment that is expensed under section1
179 of the Internal Revenue Code of 1986, as amended, that is in excess2
of twenty-five thousand dollars that is allowed under the federal Jobs3
and Growth Tax Act of 2003. Twenty percent of the total amount of4
expensing added back by this subsection for tax years beginning or deemed5
to begin on or after January 1, 2003, may be subtracted in the first6
taxable year beginning or deemed to begin on or after January 1, 2006,7
under the Internal Revenue Code of 1986, as amended, and twenty percent8
in each of the next four following tax years. 9
(11)(a) For taxable years beginning or deemed to begin before10
January 1, 2018, under the Internal Revenue Code of 1986, as amended,11
federal adjusted gross income shall be reduced by contributions, up to12
two thousand dollars per married filing jointly return or one thousand13
dollars for any other return, and any investment earnings made as a14
participant in the Nebraska long-term care savings plan under the Long-15
Term Care Savings Plan Act, to the extent not deducted for federal income16
tax purposes. 17
(b) For taxable years beginning or deemed to begin before January 1,18
2018, under the Internal Revenue Code of 1986, as amended, federal19
adjusted gross income shall be increased by the withdrawals made as a20
participant in the Nebraska long-term care savings plan under the act by21
a person who is not a qualified individual or for any reason other than22
transfer of funds to a spouse, long-term care expenses, long-term care23
insurance premiums, or death of the participant, including withdrawals24
made by reason of cancellation of the participation agreement, to the25
extent previously deducted as a contribution or as investment earnings.26
(12) There shall be added to federal adjusted gross income for27
individuals, estates, and trusts any amount taken as a credit for28
franchise tax paid by a financial institution under sections 77-3801 to29
77-3807 as allowed by subsection (5) of section 77-2715.07.30
(13)(a) For taxable years beginning or deemed to begin on or after31
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January 1, 2015, and before January 1, 2024, under the Internal Revenue1
Code of 1986, as amended, federal adjusted gross income shall be reduced2
by the amount received as benefits under the federal Social Security Act3
which are included in the federal adjusted gross income if:4
(i) For taxpayers filing a married filing joint return, federal5
adjusted gross income is fifty-eight thousand dollars or less; or6
(ii) For taxpayers filing any other return, federal adjusted gross7
income is forty-three thousand dollars or less. 8
(b) For taxable years beginning or deemed to begin on or after9
January 1, 2020, and before January 1, 2024, under the Internal Revenue10
Code of 1986, as amended, the Tax Commissioner shall adjust the dollar11
amounts provided in subdivisions (13)(a)(i) and (ii) of this section by12
the same percentage used to adjust individual income tax brackets under13
subsection (3) of section 77-2715.03. 14
(c) For taxable years beginning or deemed to begin on or after15
January 1, 2021, and before January 1, 2024, under the Internal Revenue16
Code of 1986, as amended, a taxpayer may claim the reduction to federal17
adjusted gross income allowed under this subsection or the reduction to18
federal adjusted gross income allowed under subsection (14) of this19
section, whichever provides the greater reduction.20
(14)(a) For taxable years beginning or deemed to begin on or after21
January 1, 2021, under the Internal Revenue Code of 1986, as amended,22
federal adjusted gross income shall be reduced by a percentage of the23
social security benefits that are received and included in federal24
adjusted gross income. The pertinent percentage shall be:25
(i) Five percent for taxable years beginning or deemed to begin on26
or after January 1, 2021, and before January 1, 2022, under the Internal27
Revenue Code of 1986, as amended; 28
(ii) Forty percent for taxable years beginning or deemed to begin on29
or after January 1, 2022, and before January 1, 2023, under the Internal30
Revenue Code of 1986, as amended; 31
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(iii) Sixty percent for taxable years beginning or deemed to begin1
on or after January 1, 2023, and before January 1, 2024, under the2
Internal Revenue Code of 1986, as amended; and 3
(iv) One hundred percent for taxable years beginning or deemed to4
begin on or after January 1, 2024, under the Internal Revenue Code of5
1986, as amended. 6
(b) For purposes of this subsection, social security benefits means7
benefits received under the federal Social Security Act.8
(c) For taxable years beginning or deemed to begin on or after9
January 1, 2021, and before January 1, 2024, under the Internal Revenue10
Code of 1986, as amended, a taxpayer may claim the reduction to federal11
adjusted gross income allowed under this subsection or the reduction to12
federal adjusted gross income allowed under subsection (13) of this13
section, whichever provides the greater reduction.14
(15)(a) For taxable years beginning or deemed to begin on or after15
January 1, 2015, and before January 1, 2022, under the Internal Revenue16
Code of 1986, as amended, an individual may make a one-time election17
within two calendar years after the date of his or her retirement from18
the military to exclude income received as a military retirement benefit19
by the individual to the extent included in federal adjusted gross income20
and as provided in this subdivision. The individual may elect to exclude21
forty percent of his or her military retirement benefit income for seven22
consecutive taxable years beginning with the year in which the election23
is made or may elect to exclude fifteen percent of his or her military24
retirement benefit income for all taxable years beginning with the year25
in which he or she turns sixty-seven years of age.26
(b) For taxable years beginning or deemed to begin on or after27
January 1, 2022, under the Internal Revenue Code of 1986, as amended, an28
individual may exclude one hundred percent of the military retirement29
benefit income received by such individual to the extent included in30
federal adjusted gross income. 31
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(c) For purposes of this subsection, military retirement benefit1
means retirement benefits that are periodic payments attributable to2
service in the uniformed services of the United States for personal3
services performed by an individual prior to his or her retirement. The4
term includes retirement benefits described in this subdivision that are5
reported to the individual on either: 6
(i) An Internal Revenue Service Form 1099-R received from the United7
States Department of Defense; or 8
(ii) An Internal Revenue Service Form 1099-R received from the9
United States Office of Personnel Management. 10
(16) For taxable years beginning or deemed to begin on or after11
January 1, 2021, under the Internal Revenue Code of 1986, as amended,12
federal adjusted gross income shall be reduced by the amount received as13
a Segal AmeriCorps Education Award, to the extent such amount is included14
in federal adjusted gross income. 15
(17) For taxable years beginning or deemed to begin on or after16
January 1, 2022, under the Internal Revenue Code of 1986, as amended,17
federal adjusted gross income shall be reduced by the amount received by18
or on behalf of a firefighter for cancer benefits under the Firefighter19
Cancer Benefits Act to the extent included in federal adjusted gross20
income. 21
(18) There shall be subtracted from the federal adjusted gross22
income of individuals any amount received by the individual as student23
loan repayment assistance under the Teach in Nebraska Today Act, to the24
extent such amount is included in federal adjusted gross income.25
(19) For taxable years beginning or deemed to begin on or after26
January 1, 2023, under the Internal Revenue Code of 1986, as amended, a27
retired individual who was employed full time as a firefighter or28
certified law enforcement officer for at least twenty years and who is at29
least sixty years of age as of the end of the taxable year may reduce his30
or her federal adjusted gross income by the amount of health insurance31
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premiums paid by such individual during the taxable year, to the extent1
such premiums were not already deducted in determining the individual's2
federal adjusted gross income. 3
(20) For taxable years beginning or deemed to begin on or after4
January 1, 2024, under the Internal Revenue Code of 1986, as amended, an5
individual may reduce his or her federal adjusted gross income by the6
amounts received as annuities under the Civil Service Retirement System7
which were earned for being employed by the federal government, to the8
extent such amounts are included in federal adjusted gross income.9
(21) For taxable years beginning or deemed to begin on or after10
January 1, 2025, under the Internal Revenue Code of 1986, as amended, an11
individual who is a member of the Nebraska National Guard may exclude one12
hundred percent of the income received from any of the following sources13
to the extent such income is included in the individual's federal14
adjusted gross income: 15
(a) Serving in a 32 U.S.C. duty status such as members attending16
drills, annual training, and military schools and members who are serving17
in a 32 U.S.C. active guard reserve or active duty for operational18
support duty status; 19
(b) Employment as a 32 U.S.C. federal dual-status technician with20
the Nebraska National Guard; or 21
(c) Serving in a state active duty status. 22
(22)(a) For taxable years beginning or deemed to begin on or after23
January 1, 2024, under the Internal Revenue Code of 1986, as amended, an24
individual may reduce his or her federal adjusted gross income by the25
amount of interest and principal balance of medical debt discharged under26
the Medical Debt Relief Act, to the extent included in such individual's27
federal adjusted gross income. 28
(b) For taxable years beginning or deemed to begin on or after29
January 1, 2024, under the Internal Revenue Code of 1986, as amended,30
federal adjusted gross income or, for corporations and fiduciaries,31
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federal taxable income shall be reduced by the amount of contributions1
made to the Medical Debt Relief Fund, to the extent not deducted for2
federal income tax purposes. 3
(23) For taxable years beginning or deemed to begin on or after4
January 1, 2025, under the Internal Revenue Code of 1986, as amended, an5
individual who is a qualifying employee as defined in section 77-3108 may6
reduce his or her federal adjusted gross income by the amount allowed7
under section 77-3111. 8
(24) For taxable years beginning or deemed to begin on or after9
January 1, 2026, under the Internal Revenue Code of 1986, as amended,10
federal adjusted gross income or, for corporations and fiduciaries,11
federal taxable income shall be reduced by the amounts allowed to be12
deducted pursuant to section 77-27,242. 13
(25) There shall be added to federal adjusted gross income or, for14
corporations and fiduciaries, federal taxable income for all taxable15
years beginning on or after January 1, 2025, the amount of any net16
capital loss that is derived from the sale or exchange of gold or silver17
bullion to the extent such loss is included in federal adjusted gross18
income except that such loss shall not be added if the loss is derived19
from the sale of bullion as a taxable distribution from any retirement20
plan account that holds gold or silver bullion. For the purposes of this21
subsection, bullion means coins, bars, ingots, notes, leaf, foil, film,22
or commemorative medallions of gold, silver, platinum, or palladium, or a23
combination of these, for which the value depends primarily on its24
content and not the form has the same meaning as in section 77-2704.66.25
(26) There shall be subtracted from federal adjusted gross income26
or, for corporations and fiduciaries, federal taxable income for all27
taxable years beginning on or after January 1, 2025, the amount of any28
net capital gain that is derived from the sale or exchange of gold or29
silver bullion to the extent such gain is included in federal adjusted30
gross income except that such gain shall not be subtracted if the gain is31
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derived from the sale of bullion as a taxable distribution from any1
retirement plan account that holds gold or silver bullion. For the2
purposes of this subsection, bullion means coins, bars, ingots, notes,3
leaf, foil, film, or commemorative medallions of gold, silver, platinum,4
or palladium, or a combination of these, for which the value depends5
primarily on its content and not the form has the same meaning as in6
section 77-2704.66. 7
Sec. 6. Section 77-2912, Revised Statutes Cumulative Supplement,8
2024, is amended to read: 9
77-2912 There shall be no new applications filed under the Nebraska10
Job Creation and Mainstreet Revitalization Act after June 30, 202611
December 31, 2030. All applications and all credits pending or approved12
before such date shall continue in full force and effect, except that no13
credits shall be allocated under section 77-2905, issued under section14
77-2906, or used on any tax return or similar filing after December 31,15
2035. 16
Sec. 7. Section 77-3005, Revised Statutes Cumulative Supplement,17
2024, is amended to read: 18
77-3005 (1) The occupation tax levied and imposed by the Mechanical19
Amusement Device Tax Act shall be in addition to any and all taxes or20
fees, of any form whatsoever, now imposed by the State of Nebraska upon21
the business of operating or distributing mechanical amusement devices,22
including sales and use tax on the gross receipts from the operation of23
mechanical amusement devices except that payment of the tax and license24
fees due and owing on or before the licensing date of each year shall25
exempt any such mechanical amusement device from the application of the26
sales tax which would or could otherwise be imposed under the Nebraska27
Revenue Act of 1967. Nonpayment of the taxes or fees due and owing on or28
before the licensing date of each year shall render the exemption29
provided by this section inapplicable, and the particular mechanical30
amusement devices shall then be subject to all the provisions of the31
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Nebraska Revenue Act of 1967, including the penalty provisions pertaining1
to the distributor or operator of such mechanical amusement devices.2
(2) No political subdivision of the State of Nebraska shall levy or3
impose any tax on mechanical amusement devices in addition to the taxes4
imposed by the Mechanical Amusement Device Tax Act , except for local5
option sales and use taxes. 6
Sec. 8. Sections 6 and 9 of this act become operative on June 30,7
2026. Sections 1, 2, 3, 4, 5, 7, 10, and 11 of this act become operative8
on October 1, 2026. The other sections of this act become operative on9
their effective date. 10
Sec. 9. Original section 77-2912, Revised Statutes Cumulative11
Supplement, 2024, is repealed. 12
Sec. 10. Original section 77-2701.47, Reissue Revised Statutes of13
Nebraska, sections 77-382, 77-2704.36, and 77-3005, Revised Statutes14
Cumulative Supplement, 2024, and sections 77-2701.16 and 77-2716, Revised15
Statutes Supplement, 2025, are repealed. 16
Sec. 11. The following sections are outright repealed: Sections17
77-2704.55, 77-2704.60, and 77-2704.67, Reissue Revised Statutes of18
Nebraska, and section 77-2704.66, Revised Statutes Cumulative Supplement,19
2024. 20
Sec. 12. Since an emergency exists, this act takes effect when21
passed and approved according to law. 22
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