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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 849
Introduced by Cavanaugh, J., 9.
Read first time January 08, 2026
Committee: Revenue
A BILL FOR AN ACT relating to revenue and taxation; to amend section1
77-2704.09, Reissue Revised Statutes of Nebraska; to provide an2
exemption from sales and use taxes for over-the-counter drugs; to3
provide an operative date; and to repeal the original section.4
Be it enacted by the people of the State of Nebraska,5
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Section 1. Section 77-2704.09, Reissue Revised Statutes of Nebraska,1
is amended to read: 2
77-2704.09 (1) Sales and use taxes shall not be imposed on the gross3
receipts from the sale, lease, or rental of and the storage, use, or4
other consumption in this state of (a) insulin, (b) mobility enhancing5
equipment and drugs , not including over-the-counter drugs, when sold for6
a patient's use under a prescription, (c) over-the-counter drugs, and (d)7
(c) the following when sold for a patient's use under a prescription and8
which are of the type eligible for coverage under the medical assistance9
program established pursuant to the Medical Assistance Act: Durable10
medical equipment; home medical supplies; prosthetic devices; oxygen; and11
oxygen equipment. 12
(2) For purposes of this section: 13
(a) Drug means a compound, substance, preparation, and component of14
a compound, substance, or preparation, other than food and food15
ingredients, dietary supplements, or alcoholic beverages:16
(i) Recognized in the official United States Pharmacopoeia, official17
Homeopathic Pharmacopoeia of the United States, or official National18
Formulary, and any supplement to any of them; 19
(ii) Intended for use in the diagnosis, cure, mitigation, treatment,20
or prevention of disease; or 21
(iii) Intended to affect the structure or any function of the body;22
(b) Durable medical equipment means equipment which can withstand23
repeated use, is primarily and customarily used to serve a medical24
purpose, generally is not useful to a person in the absence of illness or25
injury, is appropriate for use in the home, and is not worn in or on the26
body. Durable medical equipment includes repair and replacement parts for27
such equipment; 28
(c) Home medical supplies means supplies primarily and customarily29
used to serve a medical purpose which are appropriate for use in the home30
and are generally not useful to a person in the absence of illness or31
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injury; 1
(d) Mobility enhancing equipment means equipment which is primarily2
and customarily used to provide or increase the ability to move from one3
place to another, which is not generally used by persons with normal4
mobility, and which is appropriate for use either in a home or a motor5
vehicle. Mobility enhancing equipment includes repair and replacement6
parts for such equipment. Mobility enhancing equipment does not include7
any motor vehicle or equipment on a motor vehicle normally provided by a8
motor vehicle manufacturer; 9
(e) Over-the-counter drug means a drug that contains a label that10
identifies the product as a drug as required by 21 C.F.R. 201.66, as such11
regulation existed on January 1, 2026 2003. The over-the-counter drug12
label includes a drug facts panel or a statement of the active13
ingredients with a list of those ingredients contained in the compound,14
substance, or preparation; 15
(f) Oxygen equipment means oxygen cylinders, cylinder transport16
devices including sheaths and carts, cylinder studs and support devices,17
regulators, flowmeters, tank wrenches, oxygen concentrators, liquid18
oxygen base dispensers, liquid oxygen portable dispensers, oxygen tubing,19
nasal cannulas, face masks, oxygen humidifiers, and oxygen fittings and20
accessories; 21
(g) Prescription means an order, formula, or recipe issued in any22
form of oral, written, electronic, or other means of transmission by a23
duly licensed practitioner authorized under the Uniform Credentialing24
Act; and 25
(h) Prosthetic devices means a replacement, corrective, or26
supportive device worn on or in the body to artificially replace a27
missing portion of the body, prevent or correct physical deformity or28
malfunction, or support a weak or deformed portion of the body, and29
includes any supplies used with such device and repair and replacement30
parts. 31
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Sec. 2. This act becomes operative on October 1, 2026.1
Sec. 3. Original section 77-2704.09, Reissue Revised Statutes of2
Nebraska, is repealed. 3
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