The official site of the Nebraska Unicameral Legislature

LEGISLATIVE BILL 901
Approved by the Governor April 7, 2026

Introduced by Revenue Committee: von Gillern, 4, Chairperson; Bostar, 29;
Ibach, 44; Kauth, 31; Murman, 38.

A BILL FOR AN ACT relating to law; to amend sections 77-367, 77-377.01,
77-3,109, 77-3,118, 77-2704.46, 77-27,107, 77-27,235, and 77-5804, Reissue
Revised Statutes of Nebraska, sections 77-377.02, 77-382, 77-2704.12,
77-2717, 77-3003.01, 77-3003.02, 77-3004, 77-3006, 77-3012, and 77-6818,
Revised Statutes Cumulative Supplement, 2024, and sections 9-1,101,
71-812, 71-3801, 71-3809, 71-3810, 71-3812, 77-202, 77-3,110, 77-2715.07,
77-2734.03, 77-3003, 77-3003.03, and 77-5601, Revised Statutes Supplement,
2025; to adopt the Domestic Violence and Human Trafficking Service
Providers Tax Credit Act; to provide for the disclosure of certain
confidential information by the Department of Health and Human Services
and the Department of Revenue; to provide fees; to change provisions
relating to the Behavioral Health Services Fund; to provide an excise tax
and change provisions relating to adulterated kratom under the Kratom
Consumer Protection Act; to eliminate a property tax exemption; to change
the purposes of and money credited to the Department of Revenue
Enforcement Fund; to change and provide provisions relating to delinquent
taxes and the collection of delinquent taxes; to change provisions
relating to a report on tax expenditures; to change and eliminate certain
sales and use tax exemptions; to provide an income tax credit; to provide
for the registration of a claim for due and owing delinquent taxes as a
judgment; to eliminate a renewable energy tax credit as provided; to
change provisions relating to fees for manufacturer and distributor
licenses and cash devices, the advertisement and operation of mechanical
amusement devices and cash devices, and the amount and distribution of
taxes collected under the Mechanical Amusement Device Tax Act; to change
provisions relating to the use of funds; to change credits under the
Nebraska Advantage Research and Development Act; to redefine a term under
the ImagiNE Nebraska Act; to terminate the Department of Revenue
Miscellaneous Receipts Fund; to eliminate obsolete provisions; to
harmonize provisions; to provide operative dates; to repeal the original
sections; to outright repeal sections 77-2701.54, 77-2704.57, 77-2704.60,
77-2704.61, and 77-2704.62, Reissue Revised Statutes of Nebraska; and to
declare an emergency.
Be it enacted by the people of the State of Nebraska,
Section 1. Sections 1 to 4 of this act shall be known and may be cited as
the Domestic Violence and Human Trafficking Service Providers Tax Credit Act.
Sec. 2. (1) For taxable years beginning or deemed to begin on or after
January 1, 2027, under the Internal Revenue Code of 1986, as amended, there
shall be allowed refundable credits against the income tax imposed by the
Nebraska Revenue Act of 1967 as follows:
(a) Two hundred forty thousand dollars of tax credits to be distributed
equally among qualifying domestic violence and sexual assault programs run by
tribal governments;
(b) One hundred fifty thousand dollars of tax credits to be distributed to
a statewide coalition representing nonprofit organizations that have an
affiliation agreement with the Department of Health and Human Services to
provide services to victims of domestic abuse under the Protection from
Domestic Abuse Act;
(c) One million forty-four thousand dollars of tax credits to be
distributed equally to entities described in subdivisions (a) and (b) of this
subsection and any other nonprofit organizations that operate a shelter for
victims of domestic violence or human trafficking; and
(d) One million five hundred sixty-six thousand dollars of tax credits to
be distributed to entities described in subdivisions (a) and (b) of this
subsection and any other nonprofit organizations that operate a shelter for
victims of domestic violence or human trafficking as follows:
(i) One million two hundred fifty-two thousand eight hundred dollars of
tax credits to be distributed based on the population of the program or service
area as shown by the latest federal decennial census or as determined by the
department if such census data is not available; and
(ii) Three hundred thirteen thousand two hundred dollars of tax credits to
be distributed based on the square miles of the program or service area.
(2) The department shall distribute all of the credits allowed under the
Domestic Violence and Human Trafficking Service Providers Tax Credit Act each
calendar year.
(3) For purposes of this section:
(a) Department means the Department of Revenue;
(b) Nonprofit organization means an organization organized under section
501(c)(3) of the Internal Revenue Code of 1986, as amended; and
(c) Tribal has the same meaning as in section 71-914.02.
Sec. 3. A credit recipient may sell all or a portion of the tax credit
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received under section 2 of this act to another taxpayer. The purchasing
taxpayer must have received a transfer of the tax credit prior to the date a
tax return, or amended return, claiming the tax credit is filed. For any tax
year in which a credit is sold pursuant to this section, the credit recipient
selling the tax credit shall notify the Department of Revenue of the sale and
provide the tax identification number of the taxpayer purchasing the tax credit
at least thirty days prior to the taxpayer claiming the tax credit. The
notification shall be in the manner prescribed by the department.
Sec. 4. The Department of Revenue may adopt and promulgate rules and
regulations to carry out the Domestic Violence and Human Trafficking Service
Providers Tax Credit Act.
Sec. 5. (1) Beginning no later than October 31, 2026, the Department of
Health and Human Services and the Department of Revenue, for the purpose of the
proper administration of the laws administered by each agency, shall, upon
request, disclose confidential information about persons, businesses, and state
and local subdivisions to the other agency. The receiving agency shall not use
any confidential information obtained from the transmitting agency except for
purposes directly connected with the proper administration of the laws
administered by each agency.
(2) The disclosures allowed under this section may be made notwithstanding
any other provision of law of this state regarding disclosure of information by
either agency. Any information received by either agency under this section
shall be considered confidential as required by any applicable state laws or
rules and regulations which govern the transmitting agency's disclosure of the
information and any use of such information after such disclosure. Any
individual who discloses such information other than as specifically allowed by
this section or other laws of this state shall be subject to the penalties
normally imposed on individuals who improperly disclose such information.
Sec. 6. (1) The Department of Revenue shall add a collection fee in the
amount of twenty-five dollars or ten percent of the tax liability, whichever is
greater, to all delinquent tax claims regardless of whether the claim has been
assigned to a collection agency under sections 77-377.01 to 77-377.04. For
purposes of this subsection, delinquent tax claim has the same meaning as in
section 77-377.01.
(2) In addition to the collection fee in subsection (1) of this section,
the Department of Revenue shall add the actual costs incurred by the department
to collect delinquent taxes to the tax liability at the time such costs are
incurred.
(3) The Department of Revenue shall add an assessment fee in the amount of
twenty-five dollars or ten percent of the tax liability, whichever is greater,
to all assessments and notices of deficiency when issued. If the assessment or
notice of deficiency becomes due and owing, the assessment fee shall be
recalculated on the tax liability as of the date when the assessment or notice
of deficiency becomes due and owing.
(4)(a) The Tax Commissioner may require any person filing a petition for
redetermination of (i) a notice and demand for payment issued pursuant to
section 77-1783.01 or (ii) a notice of a deficiency determination issued
pursuant to the Nebraska Revenue Act of 1967, to remit a filing fee of forty
dollars to the Department of Revenue.
(b) A person may file an application with the Department of Revenue
claiming he or she is indigent. A person determined by the Department of
Revenue to be indigent shall not be required to remit the filing fee required
by this subsection. For purposes of this subdivision, indigent means the
inability to financially pursue the petition for redetermination without
prejudicing the person's ability to provide economic necessities for the person
or the person's family. In making its determination, the department shall
consider (i) the person's income, (ii) the availability of other resources to
the person including, but not limited to, real and personal property, bank
accounts, social security benefits, and unemployment or other benefits, (iii)
the person's normal living expenses, (iv) the person's outstanding debts, (v)
the number and age of the person's dependents, and (vi) other relevant
circumstances.
(5) All applications for a waiver of interest or penalty pursuant to the
statutory authority of the Tax Commissioner shall be submitted with a fee of
twenty-five dollars.
(6) All written requests for a certificate stating no tax is due which are
filed pursuant to section 77-2707 shall be submitted with a fee of twenty-five
dollars.
(7) The fees and costs collected by the Department of Revenue pursuant to
this section shall be remitted to the State Treasurer for credit to the
Department of Revenue Enforcement Fund.
(8) Beginning on January 1, 2027, and on January 1 of successive years,
the Department of Revenue shall increase the fees provided for in this section
by the percentage change, if any, as of August of the previous year over the
level as of August of the year preceding that year in the Consumer Price Index
for All Urban Consumers, Midwest Region, as published by the Bureau of Labor
Statistics of the United States Department of Labor.
Sec. 7. Section 9-1,101, Revised Statutes Supplement, 2025, is amended to
read:
9-1,101 (1) The Nebraska Bingo Act, the Nebraska County and City Lottery
Act, the Nebraska Lottery and Raffle Act, the Nebraska Pickle Card Lottery Act,
the Nebraska Small Lottery and Raffle Act, and section 9-701 shall be
administered and enforced by the Charitable Gaming Division of the Department
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of Revenue, which division is hereby created. The Department of Revenue shall
make annual reports to the Governor, Legislature, Auditor of Public Accounts,
and Attorney General on all tax revenue received, expenses incurred, and other
activities relating to the administration and enforcement of such acts. The
report submitted to the Legislature shall be submitted electronically.
(2) The Charitable Gaming Operations Fund is hereby created. Any money in
the fund available for investment shall be invested by the state investment
officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State
Funds Investment Act.
(3)(a) Forty percent of the taxes collected pursuant to sections 9-239,
9-344, 9-429, and 9-648 shall be available to the Charitable Gaming Division
for administering and enforcing the acts listed in subsection (1) of this
section and providing administrative support for the Nebraska Commission on
Problem Gambling. The remaining sixty percent shall be transferred to the
General Fund. Any portion of the forty percent not used by the division in the
administration and enforcement of such acts and section shall be distributed as
provided in this subsection.
(b) Beginning July 1, 2019, through June 30, 2026, on or before the last
day of the last month of each calendar quarter, the State Treasurer shall
transfer one hundred thousand dollars from the Charitable Gaming Operations
Fund to the Compulsive Gamblers Assistance Fund.
(c) Any money remaining in the Charitable Gaming Operations Fund after the
transfer pursuant to subdivision (b) of this subsection not used by the
Charitable Gaming Division in its administration and enforcement duties
pursuant to this section may be transferred to the General Fund and the
Compulsive Gamblers Assistance Fund at the direction of the Legislature.
(4) The Tax Commissioner shall employ investigators who shall be vested
with the authority and power of a law enforcement officer to carry out the laws
of this state administered by the Tax Commissioner or the Department of Revenue
and to enforce sections 28-1101 to 28-1117 relating to possession of a gambling
device. For purposes of enforcing sections 28-1101 to 28-1117, the authority of
the investigators shall be limited to investigating possession of a gambling
device, notifying local law enforcement authorities, and reporting suspected
violations to the county attorney for prosecution.
(5) The Charitable Gaming Division may charge a fee for publications and
listings it produces. The fee shall not exceed the cost of publication and
distribution of such items. The division may also charge a fee for making a
copy of any record in its possession equal to the actual cost per page. The
division shall remit the fees to the State Treasurer for credit to the
Charitable Gaming Operations Fund.
(6) The taxes collected and available to the Charitable Gaming Division
pursuant to section 77-3012 shall be used by the division for enforcement of
the Mechanical Amusement Device Tax Act and maintenance of the central server
established pursuant to section 77-3013.
(6) (7) For administrative purposes only, the Nebraska Commission on
Problem Gambling shall be located within the Charitable Gaming Division. The
division shall provide office space, furniture, equipment, and stationery and
other necessary supplies for the commission. Commission staff shall be
appointed, supervised, and terminated by the director of the Gamblers
Assistance Program pursuant to section 9-1004.
Sec. 8. Section 71-812, Revised Statutes Supplement, 2025, is amended to
read:
71-812 (1) The Behavioral Health Services Fund is created. The fund shall
be administered by the division and shall contain cash funds appropriated by
the Legislature or otherwise received by the department for the provision of
behavioral health services from any other public or private source and directed
by the Legislature for credit to the fund. Transfers may be made from the fund
to the General Fund at the direction of the Legislature.
(2) The Behavioral Health Services Fund shall be used to encourage and
facilitate the statewide development and provision of community-based
behavioral health services, including, but not limited to, (a) the provision of
grants, loans, and other assistance for such purpose and (b) reimbursement to
providers of such services.
(3)(a) Money transferred to the fund under section 76-903 shall be used
for housing-related assistance for very low-income adults with serious mental
illness or substance abuse disorder, except that if the division determines
that all housing-related assistance obligations under this subsection have been
fully satisfied, the division may distribute any excess, up to twenty percent
of such money, to regional behavioral health authorities for acquisition or
rehabilitation of housing to assist such persons. The division shall manage and
distribute such funds based upon a formula established by the division, in
consultation with regional behavioral health authorities and the department, in
a manner consistent with and reasonably calculated to promote the purposes of
the public behavioral health system enumerated in section 71-803. The division
shall contract with each regional behavioral health authority for the provision
of such assistance. Each regional behavioral health authority may contract with
qualifying public, private, or nonprofit entities for the provision of such
assistance.
(b) For purposes of this subsection:
(i) Adult with serious mental illness means a person eighteen years of age
or older who has, or at any time during the immediately preceding twelve months
has had, a diagnosable mental, behavioral, or emotional disorder of sufficient
duration to meet diagnostic criteria identified in the most recent edition of
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the Diagnostic and Statistical Manual of Mental Disorders and which has
resulted in functional impairment that substantially interferes with or limits
one or more major life functions. Serious mental illness does not include DSM V
codes, substance abuse disorders, or developmental disabilities unless such
conditions exist concurrently with a diagnosable serious mental illness;
(ii) Housing-related assistance includes rental payments, utility
payments, security and utility deposits, landlord risk mitigation payments, and
other related costs and payments;
(iii) Landlord risk mitigation payment means a payment provided to a
landlord who leases or rents property to a very low-income adult with serious
mental illness which may be used to pay for excessive damage to the rental
property, any lost rent, any legal fees incurred by the landlord in excess of
the security deposit, or any other expenses incurred by the landlord as a
result of leasing or renting the property to such individual; and
(iv) Very low-income means a household income of fifty percent or less of
the applicable median family income estimate as established by the United
States Department of Housing and Urban Development.
(4) Money transferred to the fund under section 77-3012 shall be allocated
to the behavioral health authority of the behavioral health region in which the
cash device is located.
(5) (4) Any money in the fund available for investment shall be invested
by the state investment officer pursuant to the Nebraska Capital Expansion Act
and the Nebraska State Funds Investment Act.
Sec. 9. Section 71-3801, Revised Statutes Supplement, 2025, is amended to
read:
71-3801 Sections 71-3801 to 71-3815 and section 10 of this act shall be
known and may be cited as the Kratom Consumer Protection Act.
Sec. 10. (1) Beginning January 1, 2027, an excise tax shall be levied on
the retail sale of kratom products to consumers. The tax shall be at a rate of
ten percent of the retail purchase price.
(2) The excise tax imposed by this section shall be in addition to all
other occupation, privilege, sales, or use taxes imposed by this state or by
any political subdivision of the state.
(3) Each retailer of kratom products shall maintain complete and accurate
electronic records of sales of kratom products, in the manner prescribed by the
Department of Revenue. Each such retailer shall provide such records to the
department upon request.
(4)(a) Each retailer of kratom products shall file a return with the
department by the twentieth day of the month following the month reported and
with the report shall remit the amount of excise tax due.
(b) The return, which shall be upon forms prescribed and furnished by the
department, shall contain, among other things, the total amount of kratom
products sold or transferred during the preceding month and the amount of tax
due thereon.
(c) The department may require retailers to file tax returns
electronically and to remit payments due by electronic funds transfers.
(5) The department shall collect the excise tax and shall account for and
remit to the State Treasurer at least once each month all money collected
pursuant to such tax for credit to the General Fund.
Sec. 11. Section 71-3809, Revised Statutes Supplement, 2025, is amended to
read:
71-3809 (1) No person shall sell, offer for sale, provide, or distribute
an adulterated kratom product in the State of Nebraska.
(2) A product shall be deemed adulterated if:
(a) It contains any kratom alkaloid or metabolite, including 7-
hydroxymitragynine, and does not meet the definition of a kratom product under
section 71-3802; or
(b) The kratom product is combined with a dangerous nonkratom substance
that contains a poisonous or otherwise deleterious nonkratom ingredient,
including, but not limited to, any substance listed as a controlled substance
under the laws of this state or federal law.
(3) If the department has a reasonable belief that Upon receipt of
evidence that suggests a product may be an adulterated kratom product, the
department may require the person selling, providing, or distributing the
product to obtain an independent third-party test of the product by a
laboratory of the department's choosing. A person shall not sell, provide, or
distribute any product undergoing such testing until the test results verify
that such product is not adulterated.
Sec. 12. Section 71-3810, Revised Statutes Supplement, 2025, is amended to
read:
71-3810 (1) Any processor or retailer that violates any section of the
Kratom Consumer Protection Act, including those related to the application or
registration, or any of the rules and regulations adopted and promulgated by
the department that apply to processors or kratom products shall be subject to
the penalties provided in this section.
(2) For the first violation, the department shall impose a civil penalty
of up to one thousand dollars. For the second violation, the department shall
impose a civil penalty of up to five thousand dollars. For a third violation
and any subsequent violations, the department shall impose a civil penalty of
at least five thousand dollars and no more than twenty thousand dollars and, if
the violator is a processor, the department shall prohibit the sale of any
kratom products of such processor within the State of Nebraska for a period of
three years.
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(3) If a processor violates the Kratom Consumer Protection Act by selling,
offering for sale, providing, or distributing an adulterated kratom product in
the State of Nebraska, the department shall remove any product found to be
adulterated from the list of registered kratom products on the department's
website.
(4) (3) For any processor or retailer that has no violation for a period
of four consecutive years, a new violation shall be treated as a first
violation.
(5) (4) No determination that a violation has occurred shall be made until
notice has been given and a hearing has been held by the Tax Commissioner as
provided in section 71-3811 if requested by the processor or retailer.
(6) (5) A retailer shall not be found to be in violation of the Kratom
Consumer Protection Act if it is shown by a preponderance of the evidence that
the retailer relied in good faith upon the representation of a processor that a
product is not an adulterated kratom product as defined in section 71-3809 or
otherwise conformed to the act.
Sec. 13. Section 71-3812, Revised Statutes Supplement, 2025, is amended to
read:
71-3812 (1) The Attorney General shall have authority to enforce the
Kratom Consumer Protection Act pursuant to the Consumer Protection Act and the
Uniform Deceptive Trade Practices Act. This section shall not be construed to
allow for a private right of action under the Kratom Consumer Protection Act
even though such action is authorized under the Consumer Protection Act and the
Uniform Deceptive Trade Practices Act.
(2) If a kratom product is found to be adulterated under section 71-3809
with ingredients not reflected on the label of the product, such violation of
the Kratom Consumer Protection Act is also prima facie evidence of a violation
of the Consumer Protection Act.
Sec. 14. Section 77-202, Revised Statutes Supplement, 2025, is amended to
read:
77-202 (1) The following property shall be exempt from property taxes:
(a) Property of the state and its governmental subdivisions to the extent
used or being developed for use by the state or governmental subdivision for a
public purpose. For purposes of this subdivision:
(i) Property of the state and its governmental subdivisions means (A)
property held in fee title by the state or a governmental subdivision or (B)
property beneficially owned by the state or a governmental subdivision in that
it is used for a public purpose and is being acquired under a lease-purchase
agreement, financing lease, or other instrument which provides for transfer of
legal title to the property to the state or a governmental subdivision upon
payment of all amounts due thereunder. If the property to be beneficially owned
by a governmental subdivision has a total acquisition cost that exceeds the
threshold amount or will be used as the site of a public building with a total
estimated construction cost that exceeds the threshold amount, then such
property shall qualify for an exemption under this section only if the question
of acquiring such property or constructing such public building has been
submitted at a primary, general, or special election held within the
governmental subdivision and has been approved by the voters of the
governmental subdivision. For purposes of this subdivision, threshold amount
means the greater of fifty thousand dollars or six-tenths of one percent of the
total actual value of real and personal property of the governmental
subdivision that will beneficially own the property as of the end of the
governmental subdivision's prior fiscal year; and
(ii) Public purpose means use of the property (A) to provide public
services with or without cost to the recipient, including the general operation
of government, public education, public safety, transportation, public works,
civil and criminal justice, public health and welfare, developments by a public
housing authority, parks, culture, recreation, community development, and
cemetery purposes, or (B) to carry out the duties and responsibilities
conferred by law with or without consideration. Public purpose does not include
leasing of property to a private party unless the lease of the property is at
fair market value for a public purpose. Leases of property by a public housing
authority to low-income individuals as a place of residence are for the
authority's public purpose;
(b) Unleased property of the state or its governmental subdivisions which
is not being used or developed for use for a public purpose but upon which a
payment in lieu of taxes is paid for public safety, rescue, and emergency
services and road or street construction or maintenance services to all
governmental units providing such services to the property. Except as provided
in Article VIII, section 11, of the Constitution of Nebraska, the payment in
lieu of taxes shall be based on the proportionate share of the cost of
providing public safety, rescue, or emergency services and road or street
construction or maintenance services unless a general policy is adopted by the
governing body of the governmental subdivision providing such services which
provides for a different method of determining the amount of the payment in
lieu of taxes. The governing body may adopt a general policy by ordinance or
resolution for determining the amount of payment in lieu of taxes by majority
vote after a hearing on the ordinance or resolution. Such ordinance or
resolution shall nevertheless result in an equitable contribution for the cost
of providing such services to the exempt property;
(c) Property owned by and used exclusively for agricultural and
horticultural societies;
(d)(i) Property owned by educational, religious, charitable, or cemetery
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organizations, or any organization for the exclusive benefit of any such
educational, religious, charitable, or cemetery organization, and used
exclusively for educational, religious, charitable, or cemetery purposes, when
such property is not (A) owned or used for financial gain or profit to either
the owner or user, (B) used for the sale of alcoholic liquors for more than
twenty hours per week, or (C) owned or used by an organization which
discriminates in membership or employment based on race, color, or national
origin.
(ii) For purposes of subdivision (1)(d) of this section:
(A) Educational organization means (I) an institution operated exclusively
for the purpose of offering regular courses with systematic instruction in
academic, vocational, or technical subjects or assisting students through
services relating to the origination, processing, or guarantying of federally
reinsured student loans for higher education, (II) a museum or historical
society operated exclusively for the benefit and education of the public, or
(III) a nonprofit organization that owns or operates a child care facility; and
(B) Charitable organization includes (I) an organization operated
exclusively for the purpose of the mental, social, or physical benefit of the
public or an indefinite number of persons and (II) a fraternal benefit society
organized and licensed under sections 44-1072 to 44-10,109.
(iii) The property tax exemption authorized in subdivision (1)(d)(i) of
this section shall apply to any for-profit skilled nursing facility, for-profit
nursing facility, or for-profit assisted-living facility that provides housing
for medicaid beneficiaries, except that the exemption amount for such property
shall be a percentage of the property taxes that would otherwise be due. Such
percentage shall be equal to the average percentage of occupied beds in the
facility provided to medicaid beneficiaries over the most recent three-year
period. This subdivision shall not be construed to modify, limit, or reduce any
property tax exemption provided to a nonprofit skilled nursing facility,
nonprofit nursing facility, or nonprofit assisted-living facility pursuant to
subdivision (1)(d)(i) of this section. For purposes of this subdivision,
skilled nursing facility has the same meaning as in section 71-429, nursing
facility has the same meaning as in section 71-424, and assisted-living
facility has the same meaning as in section 71-5903.
(iv) The property tax exemption authorized in subdivision (1)(d)(i) of
this section shall apply to a building that (A) is owned by a charitable
organization, (B) is made available to students in attendance at an educational
institution, and (C) is recognized by such educational institution as approved
student housing, except that the exemption shall only apply to the commons area
of such building, including any common rooms and cooking and eating facilities;
(e) Household goods and personal effects not owned or used for financial
gain or profit to either the owner or user; and
(f) A portion of the property owned by a taxpayer as provided in the
Recreational Trail Easement Property Tax Exemption Act.
(2) The increased value of land by reason of shade and ornamental trees
planted along the highway shall not be taken into account in the valuation of
land.
(3) Tangible personal property which is not depreciable tangible personal
property as defined in section 77-119 shall be exempt from property tax.
(4) Motor vehicles, trailers, and semitrailers required to be registered
for operation on the highways of this state shall be exempt from payment of
property taxes.
(5) Business and agricultural inventory shall be exempt from the personal
property tax. For purposes of this subsection, business inventory includes
personal property owned for purposes of leasing or renting such property to
others for financial gain only if the personal property is of a type which in
the ordinary course of business is leased or rented thirty days or less and may
be returned at the option of the lessee or renter at any time and the personal
property is of a type which would be considered household goods or personal
effects if owned by an individual. All other personal property owned for
purposes of leasing or renting such property to others for financial gain shall
not be considered business inventory.
(6) Any personal property exempt pursuant to subsection (2) of section
77-4105 or section 77-5209.02 shall be exempt from the personal property tax.
(7) Livestock shall be exempt from the personal property tax.
(8) Any personal property exempt pursuant to the Nebraska Advantage Act or
the ImagiNE Nebraska Act shall be exempt from the personal property tax.
(9) Any depreciable tangible personal property used directly in the
generation of electricity using wind as the fuel source shall be exempt from
the property tax levied on depreciable tangible personal property. Any
depreciable tangible personal property used directly in the generation of
electricity using solar, biomass, or landfill gas as the fuel source shall be
exempt from the property tax levied on depreciable tangible personal property
if such depreciable tangible personal property was installed on or after
January 1, 2016, and has a nameplate capacity of one hundred kilowatts or more.
Depreciable tangible personal property used directly in the generation of
electricity using wind, solar, biomass, or landfill gas as the fuel source
includes, but is not limited to, wind turbines, rotors and blades, towers,
solar panels, trackers, generating equipment, transmission components,
substations, supporting structures or racks, inverters, and other system
components such as wiring, control systems, switchgears, and generator step-up
transformers.
(10) Any tangible personal property that is acquired by a person operating
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a data center located in this state, that is assembled, engineered, processed,
fabricated, manufactured into, attached to, or incorporated into other tangible
personal property, both in component form or that of an assembled product, for
the purpose of subsequent use at a physical location outside this state by the
person operating a data center shall be exempt from the personal property tax.
Such exemption extends to keeping, retaining, or exercising any right or power
over tangible personal property in this state for the purpose of subsequently
transporting it outside this state for use thereafter outside this state. For
purposes of this subsection, data center means computers, supporting equipment,
and other organized assembly of hardware or software that are designed to
centralize the storage, management, or dissemination of data and information,
environmentally controlled structures or facilities or interrelated structures
or facilities that provide the infrastructure for housing the equipment, such
as raised flooring, electricity supply, communication and data lines, Internet
access, cooling, security, and fire suppression, and any building housing the
foregoing.
(10) (11) For tax years prior to tax year 2020, each person who owns
property required to be reported to the county assessor under section 77-1201
shall be allowed an exemption amount as provided in the Personal Property Tax
Relief Act. For tax years prior to tax year 2020, each person who owns property
required to be valued by the state as provided in section 77-601, 77-682,
77-801, or 77-1248 shall be allowed a compensating exemption factor as provided
in the Personal Property Tax Relief Act.
(11)(a) (12)(a) Broadband equipment shall be exempt from the personal
property tax if such broadband equipment is:
(i) Deployed in an area funded in whole or in part by funds from the
Broadband Equity, Access, and Deployment Program, authorized by the federal
Infrastructure Investment and Jobs Act, Public Law 117-58; or
(ii) Deployed in a qualified census tract located within the corporate
limits of a city of the metropolitan class and being utilized to provide end-
users with access to the Internet at speeds of at least one hundred megabits
per second for downloading and at least one hundred megabits per second for
uploading.
(b) An owner of broadband equipment seeking an exemption under this
section shall apply for an exemption to the county assessor on or before
December 31 of the year preceding the year for which the exemption is to begin.
If the broadband equipment meets the criteria described in this subsection, the
county assessor shall approve the application within thirty calendar days after
receiving the application. The application shall be on forms prescribed by the
Tax Commissioner.
(c) For purposes of this subsection:
(i) Broadband communications service means telecommunications service as
defined in section 86-121, video programming as defined in 47 U.S.C. 522, as
such section existed on January 1, 2024, or Internet access as defined in
section 1104 of the federal Internet Tax Freedom Act, Public Law 105-277;
(ii) Broadband equipment means machinery or equipment used to provide
broadband communications service and includes, but is not limited to, wires,
cables, fiber, conduits, antennas, poles, switches, routers, amplifiers,
rectifiers, repeaters, receivers, multiplexers, duplexers, transmitters,
circuit cards, insulating and protective materials and cases, power equipment,
backup power equipment, diagnostic equipment, storage devices, modems, and
other general central office or headend equipment, such as channel cards,
frames, and cabinets, or equipment used in successor technologies, including
items used to monitor, test, maintain, enable, or facilitate qualifying
equipment, machinery, software, ancillary components, appurtenances,
accessories, or other infrastructure that is used in whole or in part to
provide broadband communications service. Machinery or equipment used to
produce broadband communications service does not include personal consumer
electronics, including, but not limited to, smartphones, computers, and
tablets; and
(iii) Qualified census tract means a qualified census tract as defined in
26 U.S.C. 42(d)(5)(B)(ii)(I), as such section existed on January 1, 2024.
Sec. 15. Section 77-367, Reissue Revised Statutes of Nebraska, is amended
to read:
77-367 (1) The Department of Revenue may contract to procure products and
services to develop, deploy, or administer systems or programs which identify
nonfilers of returns, underreporters, or nonpayers of taxes administered by the
department or improper or fraudulent payments made through programs
administered by the department. The department shall enter into at least one
such contract by December 31, 2014, and such contract shall be for the purpose
of identifying nonfilers of returns with a tax liability in any amount or
underreporters or nonpayers of taxes with an outstanding tax liability of at
least five thousand dollars. Fees for services, reimbursements, costs incurred
by the department, or other remuneration may be funded from the amount of tax,
penalty, interest, or other recovery actually collected and shall be paid only
after the amount is collected. The Legislature intends to appropriate an amount
from the tax, penalty, interest, and other recovery actually collected, not to
exceed the amount collected, which is sufficient to pay for services,
reimbursements, costs incurred by the department, or other remuneration
pursuant to this section. Vendors entering into a contract with the department
pursuant to this section are subject to the requirements and penalties of the
confidentiality laws of this state regarding tax information.
(2) Ten percent of all proceeds received during each calendar year due to
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the contracts entered into pursuant to this section shall be deposited in the
Department of Revenue Enforcement Fund for purposes of identifying nonfilers,
underreporters, nonpayers, and improper or fraudulent payments.
(3) The Tax Commissioner shall submit electronically an annual report to
the Revenue Committee of the Legislature and Appropriations Committee of the
Legislature on the amount of dollars generated during the previous fiscal year
pursuant to this section.
Sec. 16. Section 77-377.01, Reissue Revised Statutes of Nebraska, is
amended to read:
77-377.01 The Tax Commissioner may, for the purposes of collecting
delinquent taxes due from a taxpayer and in addition to exercising those powers
in section 77-27,107, contract with any collection agency licensed pursuant to
the Collection Agency Act, within or without the state, for the collection of
such delinquent taxes, including penalties and interest thereon. Such
delinquent tax claims may be assigned to the collection agency, for the purpose
of litigation in the agency's name and at the agency's expense, as a means of
facilitating and expediting the collection process.
For purposes of this section, a delinquent tax claim shall be defined as a
tax liability that is due and owing for a period longer than six months and for
which the taxpayer has been mailed at least three notices requesting payment.
At least one notice shall include a statement that the matter of such
taxpayer's delinquency may be referred to a collection agency in the taxpayer's
home state.
Sec. 17. Section 77-377.02, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
77-377.02 (1) Fees for services, reimbursements, or other remuneration to
such collection agency shall be based on the amount of tax, penalty, and
interest actually collected and shall not be subject to the requirements of
section 73-203 or 73-204. Each contract entered into between the Tax
Commissioner and the collection agency shall provide for the payment of fees
for such services, reimbursements, or other remuneration not in excess of fifty
percent of the total amount of delinquent taxes, penalties, and interest
actually collected.
(2) If, at the time a delinquent tax claim is assigned to a collection
agency, any collection fees or costs were added to the tax liability pursuant
to subsections (1) and (2) of section 6 of this act, then a portion of such
fees and costs, up to fifty percent of the balance of the delinquent tax claim,
shall be added to the amount owed and collected from the taxpayer along with
the fees for the collection agency's services as provided in the contract. The
collection fees and costs added to the amount owed and collected from the
taxpayer pursuant to this subsection shall be remitted and deposited in the
same manner as the taxes being collected. For purposes of this subsection,
delinquent tax claim shall have the same meaning as in section 77-377.01.
(3) (2) All funds collected, less the fees for the collection agency's
services as provided in the contract, shall be remitted to the Tax Commissioner
within forty-five days from the date of collection from a taxpayer. Forms to be
used for such remittances shall be prescribed by the Tax Commissioner.
Sec. 18. Section 77-382, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-382 (1) The department shall prepare a tax expenditure report
describing (a) the basic provisions of the Nebraska tax laws, (b) the actual or
estimated revenue loss caused by the exemptions, deductions, exclusions,
deferrals, credits, and preferential rates in effect on July 1 of each year and
allowed under Nebraska's tax structure and in the property tax, (c) the actual
or estimated revenue loss caused by failure to impose sales and use tax on
services purchased for nonbusiness use, and (d) the elements which make up the
tax base for state and local income, including income, sales and use, property,
and miscellaneous taxes.
(2) The department shall review the major tax exemptions for which state
general funds are used to reduce the impact of revenue lost due to a tax
expenditure. The report shall indicate an estimate of the amount of the
reduction in revenue resulting from the operation of all tax expenditures. The
report shall list each tax expenditure relating to sales and use tax under the
following categories:
(a) Agriculture, which shall include a separate listing for the following
items: Agricultural machinery; agricultural chemicals; seeds sold to commercial
producers; water for irrigation and manufacturing; commercial artificial
insemination; mineral oil as dust suppressant; animal grooming; oxygen for use
in aquaculture; animal life whose products constitute food for human
consumption; and grains;
(b) Business across state lines, which shall include a separate listing
for the following items: Property shipped out-of-state; fabrication labor for
items to be shipped out-of-state; property to be transported out-of-state;
property purchased in other states to be used in Nebraska; aircraft delivery to
an out-of-state resident or business; state reciprocal agreements for
industrial machinery; and property taxed in another state;
(c) Common carrier and logistics, which shall include a separate listing
for the following items: Railroad rolling stock and repair parts and services;
common or contract carriers and repair parts and services; common or contract
carrier accessories; and common or contract carrier safety equipment;
(d) Consumer goods, which shall include a separate listing for the
following items: Motor vehicles and motorboat trade-ins; merchandise trade-ins;
certain medical equipment and medicine; newspapers; laundromats; telefloral
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deliveries; motor vehicle discounts for the disabled; and political campaign
fundraisers;
(e) Energy, which shall include a separate listing for the following
items: Motor fuels; energy used in industry; energy used in agriculture;
aviation fuel; and minerals, oil, and gas severed from real property;
(f) Food, which shall include a separate listing for the following items:
Food for home consumption; Supplemental Nutrition Assistance Program; school
lunches; meals sold by hospitals; meals sold by institutions at a flat rate;
food for the elderly, handicapped, and Supplemental Security Income recipients;
and meals sold by churches;
(g) General business, which shall include a separate listing for the
following items: Component and ingredient parts; manufacturing machinery;
containers; film rentals; molds and dies; syndicated programming; intercompany
sales; intercompany leases; sale of a business or farm machinery; and transfer
of property in a change of business ownership;
(h) Lodging and shelter, which shall include a separate listing for the
following item: Room rentals by certain institutions;
(i) Miscellaneous, which shall include a separate listing for the
following items: Cash discounts and coupons; separately stated finance charges;
casual sales; lease-to-purchase agreements; and separately stated taxes;
(j) Nonprofits, governments, and exempt entities, which shall include a
separate listing for the following items: Purchases by political subdivisions
of the state; purchases by churches and nonprofit colleges and medical
facilities; purchasing agents for public real estate construction improvements;
contractor as purchasing agent for public agencies; Nebraska lottery;
admissions to school events; sales on Native American Indian reservations;
school-supporting fundraisers; fine art purchases by a museum; purchases by the
Nebraska State Fair Board; purchases by the Nebraska Investment Finance
Authority and licensees of the State Racing and Gaming Commission; purchases by
the United States Government; public records; and sales by religious
organizations;
(k) Recent sales tax expenditures, which shall include a separate listing
for each sales tax expenditure created by statute or rule and regulation after
July 19, 2012;
(l) Services purchased for nonbusiness use, which shall include a separate
listing for each such service, including, but not limited to, the following
items: Motor vehicle cleaning, maintenance, and repair services; cleaning and
repair of clothing; cleaning, maintenance, and repair of other tangible
personal property; maintenance, painting, and repair of real property;
entertainment admissions; personal care services; lawn care, gardening, and
landscaping services; pet-related services; storage and moving services;
household utilities; other personal services; taxi, limousine, and other
transportation services; legal services; accounting services; other
professional services; and other real estate services; and
(m) Telecommunications, which shall include a separate listing for the
following items: Telecommunications access charges; prepaid calling
arrangements; conference bridging services; and nonvoice data services.
(3) It is the intent of the Legislature that nothing in the Tax
Expenditure Reporting Act shall cause the valuation or assessment of any
property exempt from taxation on the basis of its use exclusively for
religious, educational, or charitable purposes.
Sec. 19. Section 77-3,109, Reissue Revised Statutes of Nebraska, is
amended to read:
77-3,109 (1) The Department of Revenue may charge persons and state
agencies for the following publications of the Department of Revenue:
Department of Revenue Annual Report, Package XN, Department of Revenue Tax
Expenditure Report, and the Department of Revenue State Funds Booklet. The Tax
Commissioner shall set the price of such publications which shall be the cost
of production.
(2) The Department of Revenue shall remit all funds received under this
section to the State Treasurer for credit to the Department of Revenue
Enforcement Fund.
Sec. 20. Section 77-3,110, Revised Statutes Supplement, 2025, is amended
to read:
77-3,110 The (1) All funds received pursuant to sections 77-3,109 and
77-3,118 shall be remitted to the State Treasurer for credit to the Department
of Revenue Miscellaneous Receipts Fund which is hereby created. The fund
terminates on July 1, 2026, and the State Treasurer shall transfer any money in
the fund on such date to the Department of Revenue Enforcement Fund.
(2) All money in the Department of Revenue Miscellaneous Receipts Fund
shall be administered by the Department of Revenue and shall be used to defray
the cost of production of the publications listed in section 77-3,109 or of the
listings described in section 77-3,118 and to carry out any administrative
responsibilities of the department.
(3) Transfers may be made from the fund to the General Fund at the
direction of the Legislature. Any money in the Department of Revenue
Miscellaneous Receipts Fund available for investment shall be invested by the
state investment officer pursuant to the Nebraska Capital Expansion Act and the
Nebraska State Funds Investment Act.
Sec. 21. Section 77-3,118, Reissue Revised Statutes of Nebraska, is
amended to read:
77-3,118 (1) The Department of Revenue may charge persons and state
agencies for any listings made by the department of information that is not
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confidential. The Tax Commissioner shall set the price of such listings which
shall be the cost of production.
(2) The Department of Revenue shall remit all funds received under this
section to the State Treasurer for credit to the Department of Revenue
Enforcement Fund.
Sec. 22. Section 77-2704.12, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
77-2704.12 (1) Sales and use taxes shall not be imposed on the gross
receipts from the sale, lease, or rental of and the storage, use, or other
consumption in this state of purchases by (a) any nonprofit organization
created exclusively for religious purposes, (b) any nonprofit organization
providing services exclusively to the blind, (c) any nonprofit private
educational institution established under sections 79-1601 to 79-1607, (d) any
accredited, nonprofit, privately controlled college or university with its
primary campus physically located in Nebraska, (e) any nonprofit (i) hospital,
(ii) health clinic when one or more hospitals or the parent corporations of the
hospitals own or control the health clinic for the purpose of reducing the cost
of health services or when the health clinic receives federal funds through the
United States Public Health Service for the purpose of serving populations that
are medically underserved, (iii) skilled nursing facility, (iv) intermediate
care facility, (v) assisted-living facility, (vi) intermediate care facility
for persons with developmental disabilities, (vii) nursing facility, (viii)
home health agency, (ix) hospice or hospice service, (x) respite care service,
(xi) mental health substance use treatment center licensed under the Health
Care Facility Licensure Act, or (xii) center for independent living as defined
in 29 U.S.C. 796a, (f) any nonprofit licensed residential child-caring agency,
(g) any nonprofit licensed child-placing agency, (h) any nonprofit organization
certified by the Department of Health and Human Services to provide community-
based services for persons with developmental disabilities, or (i) any
nonprofit organization certified or contracted by a regional behavioral health
authority or the Division of Behavioral Health of the Department of Health and
Human Services to provide community-based mental health or substance use
services , or (j) any nonprofit organization for purchases of property that
will be transferred to an organization listed in subdivisions (a) through (i)
of this subsection until the property is transferred or the contract is
completed, provided that the nonprofit organization (i) acquires property that
will be transferred to an organization listed in subdivisions (a) through (i)
of this subsection or (ii) enters into a contract of construction, improvement,
or repair upon property annexed to real estate if the property will be
transferred to an organization listed in subdivisions (a) through (i) of this
subsection.
(2) Any organization listed in subsection (1) of this section shall apply
for an exemption on forms provided by the Tax Commissioner. The application
shall be approved and a numbered certificate of exemption received by the
applicant organization in order to be exempt from the sales and use tax.
(3) The appointment of purchasing agents shall be recognized for the
purpose of altering the status of the construction contractor as the ultimate
consumer of building materials which are physically annexed to the structure
and which subsequently belong to the owner of the organization or institution.
The appointment of purchasing agents shall be in writing and occur prior to
having any building materials annexed to real estate in the construction,
improvement, or repair. The contractor who has been appointed as a purchasing
agent may apply for a refund of or use as a credit against a future use tax
liability the tax paid on inventory items annexed to real estate in the
construction, improvement, or repair of a project for a licensed not-for-profit
institution.
(4) Any organization listed in subsection (1) of this section which enters
into a contract of construction, improvement, or repair upon property annexed
to real estate without first issuing a purchasing agent authorization to a
contractor or repairperson prior to the building materials being annexed to
real estate in the project may apply to the Tax Commissioner for a refund of
any sales and use tax paid by the contractor or repairperson on the building
materials physically annexed to real estate in the construction, improvement,
or repair.
(5) Any person purchasing, storing, using, or otherwise consuming building
materials in the performance of any construction, improvement, or repair by or
for any institution enumerated in subsection (1) of this section which is
licensed upon completion although not licensed at the time of construction or
improvement, which building materials are annexed to real estate and which
subsequently belong to the owner of the institution, shall pay any applicable
sales or use tax thereon. Upon becoming licensed and receiving a numbered
certificate of exemption, the institution organized not for profit shall be
entitled to a refund of the amount of taxes so paid in the performance of such
construction, improvement, or repair and shall submit whatever evidence is
required by the Tax Commissioner sufficient to establish the total sales and
use tax paid upon the building materials physically annexed to real estate in
the construction, improvement, or repair.
Sec. 23. Section 77-2704.46, Reissue Revised Statutes of Nebraska, is
amended to read:
77-2704.46 Sales and use taxes shall not be imposed on the gross receipts
from the sale, lease, or rental of and the storage, use, or other consumption
in this state of:
(1) Any form of animal life of a kind the products of which ordinarily
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constitute food for human consumption. Animal life includes live poultry ,
other species of game birds subject to permit and regulation by the Game and
Parks Commission, and livestock on the hoof when sales are made by the grower,
producer, feeder, or any person engaged in the business of bartering, buying,
or selling live poultry , other species of game birds subject to permit and
regulation by the Game and Parks Commission, or livestock on the hoof;
(2) Seeds and annual plants, the products of which ordinarily constitute
food for human consumption and which seeds and annual plants are sold to
commercial producers of such products, and seed legumes, seed grasses, and seed
grains when sold to be used exclusively for agricultural purposes;
(3) Agricultural chemicals, adjuvants, surfactants, bonding agents, clays,
oils, and any other additives or compatibility agents for use in commercial
agriculture and applied to land or crops and sold in any tax period that has
not been closed by the applicable statute of limitations. Agricultural
chemicals does not mean chemicals, adjuvants, surfactants, bonding agents,
clays, oils, and any other additives or compatibility agents applied to
harvested grains stored in commercial elevators; or
(4) Oxygen for use in aquaculture as defined in section 2-3804.01.
Sec. 24. Section 77-2715.07, Revised Statutes Supplement, 2025, is amended
to read:
77-2715.07 (1) There shall be allowed to qualified resident individuals as
a nonrefundable credit against the income tax imposed by the Nebraska Revenue
Act of 1967:
(a) A credit equal to the federal credit allowed under section 22 of the
Internal Revenue Code; and
(b) A credit for taxes paid to another state as provided in section
77-2730.
(2) There shall be allowed to qualified resident individuals against the
income tax imposed by the Nebraska Revenue Act of 1967:
(a) For returns filed reporting federal adjusted gross incomes of greater
than twenty-nine thousand dollars, a nonrefundable credit equal to twenty-five
percent of the federal credit allowed under section 21 of the Internal Revenue
Code of 1986, as amended, except that for taxable years beginning or deemed to
begin on or after January 1, 2015, such nonrefundable credit shall be allowed
only if the individual would have received the federal credit allowed under
section 21 of the code after adding back in any carryforward of a net operating
loss that was deducted pursuant to such section in determining eligibility for
the federal credit;
(b) For returns filed reporting federal adjusted gross income of twenty-
nine thousand dollars or less, a refundable credit equal to a percentage of the
federal credit allowable under section 21 of the Internal Revenue Code of 1986,
as amended, whether or not the federal credit was limited by the federal tax
liability. The percentage of the federal credit shall be one hundred percent
for incomes not greater than twenty-two thousand dollars, and the percentage
shall be reduced by ten percent for each one thousand dollars, or fraction
thereof, by which the reported federal adjusted gross income exceeds twenty-two
thousand dollars, except that for taxable years beginning or deemed to begin on
or after January 1, 2015, such refundable credit shall be allowed only if the
individual would have received the federal credit allowed under section 21 of
the code after adding back in any carryforward of a net operating loss that was
deducted pursuant to such section in determining eligibility for the federal
credit;
(c) A refundable credit as provided in section 77-5209.01 for individuals
who qualify for an income tax credit as a qualified beginning farmer or
livestock producer under the Beginning Farmer Tax Credit Act for all taxable
years beginning or deemed to begin on or after January 1, 2006, under the
Internal Revenue Code of 1986, as amended;
(d) A refundable credit for individuals who qualify for an income tax
credit under the Adoption Tax Credit Act, the Angel Investment Tax Credit Act,
the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska Advantage
Research and Development Act, the Reverse Osmosis System Tax Credit Act, or the
Volunteer Emergency Responders Incentive Act;
(e) A refundable credit equal to ten percent of the federal credit allowed
under section 32 of the Internal Revenue Code of 1986, as amended, except that
for taxable years beginning or deemed to begin on or after January 1, 2015,
such refundable credit shall be allowed only if the individual would have
received the federal credit allowed under section 32 of the code after adding
back in any carryforward of a net operating loss that was deducted pursuant to
such section in determining eligibility for the federal credit; and
(f) A refundable credit as provided in section 77-7203 for individuals who
qualify for an income tax credit under the Child Care Tax Credit Act for all
taxable years beginning or deemed to begin on or after January 1, 2024, under
the Internal Revenue Code of 1986, as amended.
(3) There shall be allowed to all individuals as a nonrefundable credit
against the income tax imposed by the Nebraska Revenue Act of 1967:
(a) A credit for personal exemptions allowed under section 77-2716.01;
(b) A credit for (i) contributions to programs or projects certified for
tax credit status as provided in the Creating High Impact Economic Futures Act
and (ii) contributions to certified community betterment programs as provided
in the Community Development Assistance Act. Each partner, each shareholder of
an electing subchapter S corporation, each beneficiary of an estate or trust,
or each member of a limited liability company shall report his or her share of
the credit in the same manner and proportion as he or she reports the
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partnership, subchapter S corporation, estate, trust, or limited liability
company income;
(c) A credit for investment in a biodiesel facility as provided in section
77-27,236;
(d) A credit as provided in the New Markets Job Growth Investment Act;
(e) A credit as provided in the Nebraska Job Creation and Mainstreet
Revitalization Act;
(f) A credit to employers as provided in sections 77-27,238 and 77-27,240;
(g) A credit as provided in the Affordable Housing Tax Credit Act;
(h) A credit to grocery store retailers, restaurants, and agricultural
producers as provided in section 77-27,241;
(i) A credit as provided in the Sustainable Aviation Fuel Tax Credit Act;
(j) A credit as provided in the Nebraska Shortline Rail Modernization Act;
(k) A credit as provided in the Nebraska Pregnancy Help Act; and
(l) A credit as provided in the Caregiver Tax Credit Act.
(4) There shall be allowed as a credit against the income tax imposed by
the Nebraska Revenue Act of 1967:
(a) A credit to all resident estates and trusts for taxes paid to another
state as provided in section 77-2730;
(b) A credit to all estates and trusts for (i) contributions to programs
or projects certified for tax credit status as provided in the Creating High
Impact Economic Futures Act and (ii) contributions to certified community
betterment programs as provided in the Community Development Assistance Act;
and
(c) A refundable credit for individuals who qualify for an income tax
credit as an owner of agricultural assets under the Beginning Farmer Tax Credit
Act for all taxable years beginning or deemed to begin on or after January 1,
2009, under the Internal Revenue Code of 1986, as amended. The credit allowed
for each partner, shareholder, member, or beneficiary of a partnership,
corporation, limited liability company, or estate or trust qualifying for an
income tax credit as an owner of agricultural assets under the Beginning Farmer
Tax Credit Act shall be equal to the partner's, shareholder's, member's, or
beneficiary's portion of the amount of tax credit distributed pursuant to
subsection (6) of section 77-5211.
(5)(a) For all taxable years beginning on or after January 1, 2007, and
before January 1, 2009, under the Internal Revenue Code of 1986, as amended,
there shall be allowed to each partner, shareholder, member, or beneficiary of
a partnership, subchapter S corporation, limited liability company, or estate
or trust a nonrefundable credit against the income tax imposed by the Nebraska
Revenue Act of 1967 equal to fifty percent of the partner's, shareholder's,
member's, or beneficiary's portion of the amount of franchise tax paid to the
state under sections 77-3801 to 77-3807 by a financial institution.
(b) For all taxable years beginning on or after January 1, 2009, under the
Internal Revenue Code of 1986, as amended, there shall be allowed to each
partner, shareholder, member, or beneficiary of a partnership, subchapter S
corporation, limited liability company, or estate or trust a nonrefundable
credit against the income tax imposed by the Nebraska Revenue Act of 1967 equal
to the partner's, shareholder's, member's, or beneficiary's portion of the
amount of franchise tax paid to the state under sections 77-3801 to 77-3807 by
a financial institution.
(c) Each partner, shareholder, member, or beneficiary shall report his or
her share of the credit in the same manner and proportion as he or she reports
the partnership, subchapter S corporation, limited liability company, or estate
or trust income. If any partner, shareholder, member, or beneficiary cannot
fully utilize the credit for that year, the credit may not be carried forward
or back.
(6) There shall be allowed to all individuals nonrefundable credits
against the income tax imposed by the Nebraska Revenue Act of 1967 as provided
in section 77-3604 and refundable credits against the income tax imposed by the
Nebraska Revenue Act of 1967 as provided in section 77-3605.
(7)(a) For taxable years beginning or deemed to begin on or after January
1, 2020, and before January 1, 2032, under the Internal Revenue Code of 1986,
as amended, a nonrefundable credit against the income tax imposed by the
Nebraska Revenue Act of 1967 in the amount of five thousand dollars shall be
allowed to any individual who purchases a residence during the taxable year if
such residence:
(i) Is located within an area that has been declared an extremely blighted
area under section 18-2101.02;
(ii) Is the individual's primary residence; and
(iii) Was not purchased from a family member of the individual or a family
member of the individual's spouse.
(b) The credit provided in this subsection shall be claimed for the
taxable year in which the residence is purchased. If the individual cannot
fully utilize the credit for such year, the credit may be carried forward to
subsequent taxable years until fully utilized.
(c) No more than one credit may be claimed under this subsection with
respect to a single residence.
(d) The credit provided in this subsection shall be subject to recapture
by the Department of Revenue if the individual claiming the credit sells or
otherwise transfers the residence or quits using the residence as his or her
primary residence within five years after the end of the taxable year in which
the credit was claimed.
(e) For purposes of this subsection, family member means an individual's
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spouse, child, parent, brother, sister, grandchild, or grandparent, whether by
blood, marriage, or adoption.
(8) There shall be allowed to all individuals refundable credits against
the income tax imposed by the Nebraska Revenue Act of 1967 as provided in the
Cast and Crew Nebraska Act, the Domestic Violence and Human Trafficking Service
Providers Tax Credit Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska
Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the
Relocation Incentive Act, and the Renewable Chemical Production Tax Credit Act.
(9)(a) For taxable years beginning or deemed to begin on or after January
1, 2022, under the Internal Revenue Code of 1986, as amended, a refundable
credit against the income tax imposed by the Nebraska Revenue Act of 1967 shall
be allowed to the parent of a stillborn child if:
(i) A fetal death certificate is filed pursuant to subsection (1) of
section 71-606 for such child;
(ii) Such child had advanced to at least the twentieth week of gestation;
and
(iii) Such child would have been a dependent of the individual claiming
the credit.
(b) The amount of the credit shall be two thousand dollars.
(c) The credit shall be allowed for the taxable year in which the
stillbirth occurred.
(10) There shall be allowed to all individuals nonrefundable credits
against the income tax imposed by the Nebraska Revenue Act of 1967 as provided
in section 77-7204.
(11) There shall be allowed to all individuals refundable credits against
the income tax imposed by the Nebraska Revenue Act of 1967 as provided in
section 77-3157 and nonrefundable credits against the income tax imposed by the
Nebraska Revenue Act of 1967 as provided in sections 77-3156, 77-3158, and
77-3159.
Sec. 25. Section 77-2717, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-2717 (1)(a)(i) For taxable years beginning or deemed to begin before
January 1, 2014, the tax imposed on all resident estates and trusts shall be a
percentage of the federal taxable income of such estates and trusts as modified
in section 77-2716, plus a percentage of the federal alternative minimum tax
and the federal tax on premature or lump-sum distributions from qualified
retirement plans. The additional taxes shall be recomputed by (A) substituting
Nebraska taxable income for federal taxable income, (B) calculating what the
federal alternative minimum tax would be on Nebraska taxable income and
adjusting such calculations for any items which are reflected differently in
the determination of federal taxable income, and (C) applying Nebraska rates to
the result. The federal credit for prior year minimum tax, after the
recomputations required by the Nebraska Revenue Act of 1967, and the credits
provided in the Nebraska Advantage Microenterprise Tax Credit Act and the
Nebraska Advantage Research and Development Act shall be allowed as a reduction
in the income tax due. A refundable income tax credit shall be allowed for all
resident estates and trusts under the Angel Investment Tax Credit Act, the
Nebraska Advantage Microenterprise Tax Credit Act, and the Nebraska Advantage
Research and Development Act. A nonrefundable income tax credit shall be
allowed for all resident estates and trusts as provided in the New Markets Job
Growth Investment Act.
(ii) For taxable years beginning or deemed to begin on or after January 1,
2014, the tax imposed on all resident estates and trusts shall be a percentage
of the federal taxable income of such estates and trusts as modified in section
77-2716, plus a percentage of the federal tax on premature or lump-sum
distributions from qualified retirement plans. The additional taxes shall be
recomputed by substituting Nebraska taxable income for federal taxable income
and applying Nebraska rates to the result. The credits provided in the Nebraska
Advantage Microenterprise Tax Credit Act and the Nebraska Advantage Research
and Development Act shall be allowed as a reduction in the income tax due. A
refundable income tax credit shall be allowed for all resident estates and
trusts under the Angel Investment Tax Credit Act, the Cast and Crew Nebraska
Act, the Domestic Violence and Human Trafficking Service Providers Tax Credit
Act, the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska
Advantage Research and Development Act, the Nebraska Biodiesel Tax Credit Act,
the Nebraska Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive
Act, the Relocation Incentive Act, and the Renewable Chemical Production Tax
Credit Act. A nonrefundable income tax credit shall be allowed for all resident
estates and trusts as provided in the Nebraska Job Creation and Mainstreet
Revitalization Act, the New Markets Job Growth Investment Act, the School
Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable Housing
Tax Credit Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska
Shortline Rail Modernization Act, the Nebraska Pregnancy Help Act, the
Individuals with Intellectual and Developmental Disabilities Support Act, and
sections 77-27,238, 77-27,240, and 77-27,241.
(b) The tax imposed on all nonresident estates and trusts shall be the
portion of the tax imposed on resident estates and trusts which is attributable
to the income derived from sources within this state. The tax which is
attributable to income derived from sources within this state shall be
determined by multiplying the liability to this state for a resident estate or
trust with the same total income by a fraction, the numerator of which is the
nonresident estate's or trust's Nebraska income as determined by sections
77-2724 and 77-2725 and the denominator of which is its total federal income
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after first adjusting each by the amounts provided in section 77-2716. The
federal credit for prior year minimum tax, after the recomputations required by
the Nebraska Revenue Act of 1967, reduced by the percentage of the total income
which is attributable to income from sources outside this state, and the
credits provided in the Nebraska Advantage Microenterprise Tax Credit Act and
the Nebraska Advantage Research and Development Act shall be allowed as a
reduction in the income tax due. A refundable income tax credit shall be
allowed for all nonresident estates and trusts under the Angel Investment Tax
Credit Act, the Cast and Crew Nebraska Act, the Domestic Violence and Human
Trafficking Service Providers Tax Credit Act, the Nebraska Advantage
Microenterprise Tax Credit Act, the Nebraska Advantage Research and Development
Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska Higher Blend Tax
Credit Act, the Nebraska Property Tax Incentive Act, the Relocation Incentive
Act, and the Renewable Chemical Production Tax Credit Act. A nonrefundable
income tax credit shall be allowed for all nonresident estates and trusts as
provided in the Nebraska Job Creation and Mainstreet Revitalization Act, the
New Markets Job Growth Investment Act, the School Readiness Tax Credit Act, the
Child Care Tax Credit Act, the Affordable Housing Tax Credit Act, the
Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline Rail
Modernization Act, the Nebraska Pregnancy Help Act, the Individuals with
Intellectual and Developmental Disabilities Support Act, and sections
77-27,238, 77-27,240, and 77-27,241.
(2) In all instances wherein a fiduciary income tax return is required
under the provisions of the Internal Revenue Code, a Nebraska fiduciary return
shall be filed, except that a fiduciary return shall not be required to be
filed regarding a simple trust if all of the trust's beneficiaries are
residents of the State of Nebraska, all of the trust's income is derived from
sources in this state, and the trust has no federal tax liability. The
fiduciary shall be responsible for making the return for the estate or trust
for which he or she acts, whether the income be taxable to the estate or trust
or to the beneficiaries thereof. The fiduciary shall include in the return a
statement of each beneficiary's distributive share of net income when such
income is taxable to such beneficiaries.
(3) The beneficiaries of such estate or trust who are residents of this
state shall include in their income their proportionate share of such estate's
or trust's federal income and shall reduce their Nebraska tax liability by
their proportionate share of the credits as provided in the Angel Investment
Tax Credit Act, the Nebraska Advantage Microenterprise Tax Credit Act, the
Nebraska Advantage Research and Development Act, the Nebraska Job Creation and
Mainstreet Revitalization Act, the New Markets Job Growth Investment Act, the
School Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable
Housing Tax Credit Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska
Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the
Relocation Incentive Act, the Renewable Chemical Production Tax Credit Act, the
Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline Rail
Modernization Act, the Cast and Crew Nebraska Act, the Nebraska Pregnancy Help
Act, the Individuals with Intellectual and Developmental Disabilities Support
Act, the Domestic Violence and Human Trafficking Service Providers Tax Credit
Act, and sections 77-27,238, 77-27,240, and 77-27,241. There shall be allowed
to a beneficiary a refundable income tax credit under the Beginning Farmer Tax
Credit Act for all taxable years beginning or deemed to begin on or after
January 1, 2001, under the Internal Revenue Code of 1986, as amended.
(4) If any beneficiary of such estate or trust is a nonresident during any
part of the estate's or trust's taxable year, he or she shall file a Nebraska
income tax return which shall include (a) in Nebraska adjusted gross income
that portion of the estate's or trust's Nebraska income, as determined under
sections 77-2724 and 77-2725, allocable to his or her interest in the estate or
trust and (b) a reduction of the Nebraska tax liability by his or her
proportionate share of the credits as provided in the Angel Investment Tax
Credit Act, the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska
Advantage Research and Development Act, the Nebraska Job Creation and
Mainstreet Revitalization Act, the New Markets Job Growth Investment Act, the
School Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable
Housing Tax Credit Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska
Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the
Relocation Incentive Act, the Renewable Chemical Production Tax Credit Act, the
Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline Rail
Modernization Act, the Cast and Crew Nebraska Act, the Nebraska Pregnancy Help
Act, the Individuals with Intellectual and Developmental Disabilities Support
Act, the Domestic Violence and Human Trafficking Service Providers Tax Credit
Act, and sections 77-27,238, 77-27,240, and 77-27,241 and shall execute and
forward to the fiduciary, on or before the original due date of the Nebraska
fiduciary return, an agreement which states that he or she will file a Nebraska
income tax return and pay income tax on all income derived from or connected
with sources in this state, and such agreement shall be attached to the
Nebraska fiduciary return for such taxable year.
(5) In the absence of the nonresident beneficiary's executed agreement
being attached to the Nebraska fiduciary return, the estate or trust shall
remit a portion of such beneficiary's income which was derived from or
attributable to Nebraska sources with its Nebraska return for the taxable year.
For taxable years beginning or deemed to begin before January 1, 2013, the
amount of remittance, in such instance, shall be the highest individual income
tax rate determined under section 77-2715.02 multiplied by the nonresident
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beneficiary's share of the estate or trust income which was derived from or
attributable to sources within this state. For taxable years beginning or
deemed to begin on or after January 1, 2013, the amount of remittance, in such
instance, shall be the highest individual income tax rate determined under
section 77-2715.03 multiplied by the nonresident beneficiary's share of the
estate or trust income which was derived from or attributable to sources within
this state. The amount remitted shall be allowed as a credit against the
Nebraska income tax liability of the beneficiary.
(6) The Tax Commissioner may allow a nonresident beneficiary to not file a
Nebraska income tax return if the nonresident beneficiary's only source of
Nebraska income was his or her share of the estate's or trust's income which
was derived from or attributable to sources within this state, the nonresident
did not file an agreement to file a Nebraska income tax return, and the estate
or trust has remitted the amount required by subsection (5) of this section on
behalf of such nonresident beneficiary. The amount remitted shall be retained
in satisfaction of the Nebraska income tax liability of the nonresident
beneficiary.
(7) For purposes of this section, unless the context otherwise requires,
simple trust shall mean any trust instrument which (a) requires that all income
shall be distributed currently to the beneficiaries, (b) does not allow amounts
to be paid, permanently set aside, or used in the tax year for charitable
purposes, and (c) does not distribute amounts allocated in the corpus of the
trust. Any trust which does not qualify as a simple trust shall be deemed a
complex trust.
(8) For purposes of this section, any beneficiary of an estate or trust
that is a grantor trust of a nonresident shall be disregarded and this section
shall apply as though the nonresident grantor was the beneficiary.
Sec. 26. Section 77-2734.03, Revised Statutes Supplement, 2025, is amended
to read:
77-2734.03 (1)(a) For taxable years commencing prior to January 1, 1997,
any (i) insurer paying a tax on premiums and assessments pursuant to section
77-908 or 81-523, (ii) electric cooperative organized under the Joint Public
Power Authority Act, or (iii) credit union shall be credited, in the
computation of the tax due under the Nebraska Revenue Act of 1967, with the
amount paid during the taxable year as taxes on such premiums and assessments
and taxes in lieu of intangible tax.
(b) For taxable years commencing on or after January 1, 1997, any insurer
paying a tax on premiums and assessments pursuant to section 77-908 or 81-523,
any electric cooperative organized under the Joint Public Power Authority Act,
or any credit union shall be credited, in the computation of the tax due under
the Nebraska Revenue Act of 1967, with the amount paid during the taxable year
as (i) taxes on such premiums and assessments included as Nebraska premiums and
assessments under section 77-2734.05 and (ii) taxes in lieu of intangible tax.
(c) For taxable years commencing or deemed to commence prior to, on, or
after January 1, 1998, any insurer paying a tax on premiums and assessments
pursuant to section 77-908 or 81-523 shall be credited, in the computation of
the tax due under the Nebraska Revenue Act of 1967, with the amount paid during
the taxable year as assessments allowed as an offset against premium and
related retaliatory tax liability pursuant to section 44-4233.
(2) There shall be allowed to corporate taxpayers a tax credit for (a)
contributions to programs or projects certified for tax credit status as
provided in the Creating High Impact Economic Futures Act and (b) contributions
to certified community betterment programs as provided in the Community
Development Assistance Act.
(3) There shall be allowed to corporate taxpayers a refundable income tax
credit under the Beginning Farmer Tax Credit Act for all taxable years
beginning or deemed to begin on or after January 1, 2001, under the Internal
Revenue Code of 1986, as amended.
(4) The changes made to this section by Laws 2004, LB 983, apply to motor
fuels purchased during any tax year ending or deemed to end on or after January
1, 2005, under the Internal Revenue Code of 1986, as amended.
(5) There shall be allowed to corporate taxpayers refundable income tax
credits under the Nebraska Advantage Microenterprise Tax Credit Act, the Cast
and Crew Nebraska Act, the Domestic Violence and Human Trafficking Service
Providers Tax Credit Act, the Nebraska Advantage Research and Development Act,
the Nebraska Biodiesel Tax Credit Act, the Nebraska Higher Blend Tax Credit
Act, the Nebraska Property Tax Incentive Act, the Relocation Incentive Act, and
the Renewable Chemical Production Tax Credit Act.
(6) There shall be allowed to corporate taxpayers a nonrefundable income
tax credit for investment in a biodiesel facility as provided in section
77-27,236.
(7) There shall be allowed to corporate taxpayers a nonrefundable income
tax credit as provided in the Nebraska Job Creation and Mainstreet
Revitalization Act, the New Markets Job Growth Investment Act, the School
Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable Housing
Tax Credit Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska
Shortline Rail Modernization Act, the Nebraska Pregnancy Help Act, the
Individuals with Intellectual and Developmental Disabilities Support Act, and
sections 77-27,238, 77-27,240, and 77-27,241.
Sec. 27. Section 77-27,107, Reissue Revised Statutes of Nebraska, is
amended to read:
77-27,107 (1) When notice and demand for the payment of income tax is
given to a taxpayer and it appears to the Tax Commissioner that it is not
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practicable to locate property of the taxpayer sufficient in amount to cover
the amount of tax due, he or she shall send a copy of the notice provided for
in the Uniform State Tax Lien Registration and Enforcement Act to the taxpayer
at his or her last-known address together with a notice that such notice has
been filed with the appropriate filing officer. Thereafter, the Tax
Commissioner may authorize the institution of any action or proceeding to
collect or enforce such claim in any place and by any procedure that a civil
judgment of a court of record of this state could be collected or enforced.
(2) The Tax Commissioner may register a claim for any delinquent taxes due
and owing as a judgment in the office of the clerk of the district court of
Lancaster County in the same manner as a foreign judgment is filed under the
Nebraska Uniform Enforcement of Foreign Judgments Act.
(3) The Tax Commissioner may also in his or her discretion designate
agents or retain counsel for the purpose of collecting any income taxes due
under the Nebraska Revenue Act of 1967. He or she may fix the compensation of
such agents and counsel to be paid out of money appropriated or otherwise
lawfully available for payment thereof and he or she may require of them bonds
or other security for the faithful performance of their duties.
(4) The Tax Commissioner may enter into agreements with the tax
departments of other states and the District of Columbia for the collection of
income taxes from persons found in those jurisdictions who are delinquent in
the payment of income taxes imposed under such act.
Sec. 28. Section 77-27,235, Reissue Revised Statutes of Nebraska, is
amended to read:
77-27,235 (1) Beginning on or after July 14, 2006, and before July 1,
2026, any Any producer of electricity generated by a new renewable electric
generation facility shall earn a renewable energy tax credit. For electricity
generated on or after July 14, 2006, and before October 1, 2007, the credit
shall be .075 cent for each kilowatt-hour of electricity generated by a new
renewable electric generation facility. For electricity generated on or after
October 1, 2007, and before January 1, 2010, the credit shall be .1 cent for
each kilowatt-hour of electricity generated by a new renewable electric
generation facility. For electricity generated on or after January 1, 2010, and
before January 1, 2013, the credit shall be .075 cent per kilowatt-hour for
electricity generated by a new renewable electric generation facility. For
electricity generated on or after January 1, 2013, and before July 1, 2026, the
credit shall be .05 cent per kilowatt-hour for electricity generated by a new
renewable electric generation facility. The credit may be earned for production
of electricity for ten years after the date that the facility is placed in
operation on or after July 14, 2006.
(2) For purposes of this section:
(a) Electricity generated by a new renewable electric generation facility
means electricity that is exclusively produced by a new renewable electric
generation facility;
(b) Eligible renewable resources means wind, moving water, solar,
geothermal, fuel cell, methane gas, or photovoltaic technology; and
(c) New renewable electric generation facility means an electrical
generating facility located in this state that is first placed into service on
or after July 14, 2006, which utilizes eligible renewable resources as its fuel
source.
(3) The credit allowed under this section may be used to reduce the
producer's Nebraska income tax liability or to obtain a refund of state sales
and use taxes paid by the producer of electricity generated by a new renewable
electric generation facility. A claim to use the credit for refund of the state
sales and use taxes paid, either directly or indirectly, by the producer may be
filed quarterly for electricity generated during the previous quarter by the
twentieth day of the month following the end of the calendar quarter. The
credit may be used to obtain a refund of state sales and use taxes paid during
the quarter immediately preceding the quarter in which the claim for refund is
made, except that the amount refunded under this subsection shall not exceed
the amount of the state sales and use taxes paid during the quarter.
(4) The Department of Revenue may adopt and promulgate rules and
regulations to permit verification of the validity and timeliness of any
renewable energy tax credit claimed.
(5) The total amount of renewable energy tax credits that may be used by
all taxpayers shall be limited to fifty thousand dollars without further
authorization from the Legislature.
(6) The credit allowed under this section may not be claimed by a producer
who received a sales tax exemption under section 77-2704.57 , as such section
existed on June 30, 2026, for the new renewable electric generation facility.
(7) Interest shall not be allowed on any refund paid under this section.
Sec. 29. Section 77-3003, Revised Statutes Supplement, 2025, is amended to
read:
77-3003 (1) Any distributor shall be required to procure a biennial
license from the Tax Commissioner permitting him or her to place and either
directly or indirectly control or manage a mechanical amusement device within
the State of Nebraska. The Tax Commissioner, upon the application of any
person, may issue a license, subject to the same limitations as an operator's
license under section 77-3002. If the applicant is an individual, the
application shall include the applicant's social security number.
(2)(a) Except for an applicant that holds a liquor license under the
Nebraska Liquor Control Act, an applicant for or person holding a license as a
distributor of a cash device shall be subject to a background check at any time
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by the department including fingerprinting and a check of his or her criminal
history record information maintained by the Identification Division of the
Federal Bureau of Investigation through the Nebraska State Patrol for the
purpose of determining whether the Department of Revenue has a basis to deny
the license application or to suspend, cancel, revoke, or terminate the
person's license. Each applicant for or person holding a license pursuant to
this section shall also submit a personal history report to the department on a
form provided by the department and may be subject to a background
investigation, an inspection of the applicant's or licensee's facilities, or
both. An applicant or licensee shall pay the costs associated with the
background check along with any required fees as determined by the department.
(b) The Tax Commissioner has the authority to deny any application for a
license as a distributor of a cash device for cause. Cause for denial of a
license application includes instances in which the applicant individually, or
in the case of a business entity, any officer, director, employee, or limited
liability company member of the applicant or licensee other than an employee
whose duties are purely ministerial in nature:
(i) Violated the provisions, requirements, conditions, limitations, or
duties imposed by the Mechanical Amusement Device Tax Act or any rules or
regulations adopted and promulgated pursuant to the act;
(ii) Knowingly caused, aided, abetted, or conspired with another to cause
any person to violate any of the provisions of the act or any rules or
regulations adopted and promulgated pursuant to the act;
(iii) Obtained a license or permit under the act by fraud,
misrepresentation, or concealment;
(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded
guilty or nolo contendere to any offense or crime, whether a felony or a
misdemeanor, involving any gambling activity or fraud, theft, willful failure
to make required payments or reports, or filing false reports with a
governmental agency at any level;
(v) Denied the department or its authorized representatives, including
authorized law enforcement agencies, access to any place where activity
required to be licensed under the act is being conducted or failed to produce
for inspection or audit any book, record, document, or item required by law,
rule, or regulation;
(vi) Made a misrepresentation of or failed to disclose a material fact to
the department;
(vii) Failed to prove by clear and convincing evidence such applicant's
qualifications to be licensed in accordance with the act;
(viii) Failed to pay any taxes and additions to taxes, including penalties
and interest required by the act or any other taxes imposed pursuant to the
Nebraska Revenue Act of 1967; or
(ix) Has been cited for a violation of the Nebraska Liquor Control Act and
had a liquor license suspended, canceled, or revoked by the Nebraska Liquor
Control Commission for illegal gambling activities on or about the premises
licensed by the commission pursuant to the Nebraska Liquor Control Act or the
rules and regulations adopted and promulgated pursuant to such act.
(c) No renewal of a license issued pursuant to this section shall be
issued when the applicant for renewal would not be eligible for a license upon
a first application.
(3) Beginning January 1, 2025, the biennial license for a distributor of a
cash device shall be accompanied by a fee of two hundred dollars per cash
device up to a maximum of ten thousand dollars. The Department of Revenue shall
remit all license fees collected by the department pursuant to this section to
the State Treasurer for credit to the Department of Revenue Enforcement Fund.
(4) The Tax Commissioner has the authority to suspend or revoke the
license of any distributor that is in violation of the Mechanical Amusement
Device Tax Act.
(5) Beginning on the implementation date designated by the Tax
Commissioner pursuant to subsection (2) of section 9-1312, prior to the
winnings payment of any cash device winnings as defined in section 9-1303, a
distributor of a cash device shall check the collection system to determine if
the winner has a debt or an outstanding state liability as required by the
Gambling Winnings Setoff for Outstanding Debt Act. If such distributor
determines that the winner is subject to the collection system, the distributor
shall deduct the amount of debt and outstanding state liability identified in
the collection system from the winnings payment and shall remit the net
winnings payment of cash device winnings, if any, to the winner and the amount
deducted to the Department of Revenue to be credited against such debt or
outstanding state liability as provided in section 9-1306.
Sec. 30. Section 77-3003.01, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
77-3003.01 (1)(a) The Tax Commissioner or his or her agents or employees,
at the direction of the Tax Commissioner, or any peace officer of this state
may seize, without a warrant, any mechanical amusement device if there is cause
to believe such mechanical amusement device is not in compliance with the
Mechanical Amusement Device Tax Act or any rules and regulations adopted and
promulgated under the act or if the department determines the response to a
request for information is materially deficient without good cause. In addition
to seizure, any person placing in service or operating a cash device
constituting an illegal game of chance or an unlicensed cash device of any kind
within this state shall be subject to a penalty of up to one thousand dollars
for each day of such operation. The Tax Commissioner has the authority to
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suspend or revoke the license of any operator, manufacturer, or distributor of
a cash device that is in violation of this section.
(b) For purposes of this subsection, a mechanical amusement device is
subject to seizure and penalties as if it were a game of chance if:
(i) The mechanical amusement device is a cash device; and
(ii) The mechanical amusement device does not bear an unexpired decal as
required under the Mechanical Amusement Device Tax Act.
(c) This section does not apply to any device (i) used in any bingo,
lottery by the sale of pickle cards, or other lottery, raffle, or gift
enterprise conducted in accordance with the Nebraska Bingo Act, Nebraska County
and City Lottery Act, Nebraska Lottery and Raffle Act, Nebraska Pickle Card
Lottery Act, Nebraska Small Lottery and Raffle Act, State Lottery Act, or
section 9-701, (ii) used for a prize contest as defined in section 28-1101,
(iii) specifically authorized by the laws of this state, or (iv) regulated
under the Nebraska Racetrack Gaming Act.
(2) To receive a determination from the department that a cash device is
in compliance with the Mechanical Amusement Device Tax Act and any rules and
regulations adopted and promulgated under the act, a manufacturer or
distributor of the device shall:
(a) Submit an application to the Tax Commissioner containing information
regarding the device's location, software, Internet connectivity, and
configuration as may be required by the Tax Commissioner;
(b)(i) (b) Submit an application fee as provided in subdivision (b)(ii) of
this subsection. of five hundred dollars;
(ii) The application fee shall be:
(A) Five hundred dollars prior to January 1, 2027; and
(B) Six hundred fifty dollars beginning January 1, 2027;
(c) Provide a specimen of the proposed cash device;
(d) Provide all supporting evidence, including a report by an independent
testing laboratory certified by the Tax Commissioner, to the Tax Commissioner
indicating that, under all configurations, settings, and modes of operation,
operation of the cash device constitutes a game of skill and not a game of
chance and the use, operation, sale, or manufacture of the cash device would
not constitute a violation of section 28-1107; and
(e) Provide an affidavit from the manufacturer or distributor affirming
that no functional changes in hardware or software will be made to the approved
cash device without further approval from the Tax Commissioner.
(3) The Tax Commissioner shall issue a response in writing to the
applicant within forty-five days after the applicant has completed and
submitted all application requirements. The Tax Commissioner's response shall
state the reason for any denial or the reasons a determination cannot be made.
(4)(a) A cash device shall not be considered a game of skill if one or
more of the following apply:
(i) The ability of any player to succeed at the game played on the cash
device is impacted by the number or ratio of prior wins to prior losses of
players playing such cash device;
(ii) The ability of the player to succeed at the game played on the cash
device is impacted by the ability of any person to set a specified win-loss
ratio for the cash device or by the cash device having a predetermined win-loss
percentage;
(iii) The outcome of the game played on the cash device can be controlled
by a source other than any player playing the cash device;
(iv) The success of any player is or may be determined by a chance event
which cannot be altered by player action;
(v) There is no possibility for the player to win every game played on the
cash device or there are unwinnable games or game modes on the cash device;
(vi) The ability of any player to succeed at the game played on the cash
device requires the exercise of skill that no reasonable player could exercise;
or
(vii) The primary determination of the prize amount is determined by the
presentation or generation of a particular puzzle or group of symbols dealt to
the player and the player does not have control over the puzzle or group of
symbols presented.
(b) For purposes of this subsection, reasonable player means a player with
an average level of intelligence, physical and mental skills, reaction time,
and dexterity.
(5) The department or any court considering whether a gambling device is a
game of skill may consider:
(a) The results of an analysis by the independent testing laboratory
certified by the Tax Commissioner to evaluate the reaction time required for a
player of a particular game on such cash device to perform the tasks required
by the game to win; or
(b) The results of an analysis by the independent testing laboratory
certified by the Tax Commissioner to evaluate factors set forth by the Tax
Commissioner, other than reaction time, required for the player of a particular
game on such cash device to perform the tasks required by the game to win.
(6) Factors which are not sufficient indications of a skill-based game
include, but are not limited to:
(a) Whether a comprehensive list of prizes or outcomes is offered to the
player or whether all outcomes are drawn from a finite pool of predetermined
outcomes or starting positions;
(b) Whether a player can increase his or her chance of winning based on
knowledge of probabilities in general or the probabilities of any particular
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prize or outcome in a game or on a cash device;
(c) Whether a player can simply choose not to play before committing money
or credits; or
(d) A game task consisting solely of moving a symbol up or down, replacing
one symbol with another, or any similar action, with or without a timer.
(7) Upon approval of an application based on a determination that the
mechanical amusement device is a game of skill and not a game of chance, the
Tax Commissioner shall issue a mechanical amusement device decal for the device
as configured and as provided in subsection (8) of this section. No mechanical
amusement device decal shall be issued for any cash device unless the
department has determined that (a) such cash device is a game of skill and not
a game of chance and that the manufacture, sale, transport, placement,
possession, or operation of such cash device does not constitute a violation of
section 28-1107 and (b) the appearance of such cash device does not violate
subsection (9) of this section. If the Tax Commissioner does not approve the
application for the cash device, the application shall be denied and the
operator shall have the opportunity for an administrative hearing before the
Tax Commissioner at which evidence may be presented on the issue of whether the
cash device is specifically authorized by law and is not a gambling device as
defined in section 28-1101. After such hearing, the Tax Commissioner shall
enter a final decision approving or denying the application. The Tax
Commissioner's final decision may be appealed, and the appeal shall be in
accordance with the Administrative Procedure Act.
(8)(a) Upon approval of a specimen of a cash device as a game of skill
under this section, the department may issue a mechanical amusement device
decal for each such cash device:
(i) If certified by the manufacturer to be functionally identical in both
hardware and software configurations to the specimen provided to the
department; and
(ii) If the application fee described in subdivision (2)(b) of this
section and the annual decal fee described in subdivision (c) of this
subsection have been paid.
(b)(i) In order for a distributor or operator of a cash device to place a
cash device into operation at a retail establishment, other than a retail
establishment owned or operated by a fraternal benefit society organized and
licensed under sections 44-1072 to 44-10,109 or a recognized veterans
organization as defined in section 80-401.01, such retail establishment shall
generate at least sixty percent of the gross operating revenue of such retail
establishment from sources other than the total gross operating revenue of any
cash devices located within the retail establishment.
(ii) The number of cash devices permitted at any retail establishment
shall not exceed the lesser of either:
(A) Except for a fraternal benefit society organized and licensed under
sections 44-1072 to 44-10,109 or a recognized veterans organization as defined
in section 80-401.01, the number of cash devices it takes to generate forty
percent of the gross operating revenue of the retail establishment; or
(B) Five Four cash devices or four cash devices for an establishment
located in a qualified census tract, except that an establishment with over
four thousand square feet may have one cash device for each one thousand square
feet, up to a maximum of fifteen cash devices.
(c)(i) (c) The distributor or operator of a cash device shall pay an
annual decal fee as provided in subdivision (c)(ii) of this subsection of two
hundred fifty dollars to the department for each cash device in operation in
Nebraska. The decal issued under this section shall be distinct from other
decals issued by the department for mechanical amusement devices that are not
required to be evaluated under this section. Regardless of the issuance of a
decal by the department, no cash device shall be considered in compliance if it
does not bear an unexpired decal in a conspicuous place.
(ii) For each cash device in operation in Nebraska the annual decal fee
shall be:
(A) Two hundred fifty dollars prior to January 1, 2027; and
(B) Three hundred fifty dollars beginning January 1, 2027.
(d)(i) A decal issued under this subsection shall be replaced by the
department without the payment of an additional fee under the following
circumstances:
(A) If the decal is damaged through no fault of the distributor or
operator; or
(B) If the cabinet on the cash device is destroyed beyond repair through
no fault of the distributor or operator.
(ii) A replacement decal is not required (A) if the internal components of
the cash device require replacement due to failure or damage and the
replacement of such components does not change the approved cash device
software currently on the device or (B) when cash device software is updated to
improve security or resolve issues or defects.
(iii) Any replacement decal will be valid for the same time period as the
decal that was first issued.
(9)(a) An operator, distributor, or manufacturer of a cash device shall
not market, advertise, promote, or make available any cash device in this state
if the device or its container, packaging, or advertising materials:
(i) Depict a cartoon-like or fictional character primarily used to appeal
to minors; or
(ii) Imitate or mimic the trademark, trade dress, branding, or packaging
of products primarily marketed to minors.
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(b)(i) No person shall place or permit exterior advertising for a cash
device on or about any premises where such device is located except as provided
in this section.
(ii) Each premises where a cash device is located may display not more
than three exterior signs advertising the availability of a cash device
available for play at such location. Any such sign shall:
(A) Not exceed eleven inches in height and seventeen inches in width; and
(B) Be permanently affixed to the exterior of the building that contains a
cash device.
(iii) No exterior banner, flag, window wraps, digital display, vehicle
wrap, or other exterior advertising media shall be used to advertise a cash
device other than the signs permitted pursuant to subdivision (9)(b)(ii) of
this section.
(10) (9) The application process described in this section shall not be
construed to limit further investigation by the department or the issuance of
further regulations to promote compliance after the application process is
completed. At any point after a determination of skill by the department, the
department may request from the manufacturer, distributor, or operator
information about any cash device in operation in this state, including, but
not limited to, information regarding currently operable source code, changes
to software or hardware, and communications from or to the device over the
Internet. A manufacturer, distributor, or operator that receives a request
shall respond with all responsive information in its possession or control
within fifteen business days.
(11) (10) If a manufacturer or distributor receives a determination from
the department that a cash device is not in compliance with the Mechanical
Amusement Device Tax Act, such manufacturer or distributor shall have thirty
days after the issuance of that determination to (a) provide proof of
correction and compliance or (b) remove any such cash device from operation in
Nebraska.
(12) (11) Application fees collected under subsection (2) of this section
and annual decal fees collected under subsection (8) of this section shall be
remitted to the State Treasurer for credit to the Department of Revenue
Enforcement Fund.
Sec. 31. Section 77-3003.02, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
77-3003.02 (1) No cash device shall be operated using a credit card,
charge card, or debit card.
(2) No person under twenty-one years of age shall play or participate in
any way in the operation of a cash device. No distributor, operator, or
employee or agent of any distributor or operator shall knowingly permit any
individual under twenty-one years of age to play or participate in any way in
the operation of a cash device. The distributor, operator, or employee or agent
shall verify the age of any individual requesting to play a cash device and
shall comply with subsection (3) of this section.
(3) Beginning August 1, 2026, an operator of a cash device shall not make
such device available for play at a retail establishment unless an attendant is
physically present on the premises of such retail establishment and capable of
actively supervising play of such cash device. An attendant shall be considered
to be actively supervising play of such cash device if the attendant:
(a) Visually confirms the age of the player; and
(b) Continuously monitors the area in which a cash device is located and
intervenes to prevent play of a cash device by any person under twenty-one
years of age.
(4) (2) No distributor or operator shall charge a fee or require a
gratuity in return for the payment of any prize money won by a player of a cash
device.
(5) (3) The Tax Commissioner has the authority to suspend or revoke the
license of any distributor or operator of a cash device for a violation of this
section.
(6) (4) The department shall adopt and promulgate rules and regulations
for the implementation and enforcement of this section as long as such rules
and regulations do not restrict how a cash device manufacturer, distributor, or
operator markets or advertises the existence of a cash device, unless the
advertiser or marketer of a cash device is willfully conflating the cash device
play with casino-style gambling or slot machine wagering.
Sec. 32. Section 77-3003.03, Revised Statutes Supplement, 2025, is amended
to read:
77-3003.03 (1) A manufacturer of a cash device shall be required to
procure a biennial license from the Tax Commissioner permitting such
manufacturer to place any cash devices in the State of Nebraska for sale,
lease, or distribution through a third party. The Tax Commissioner, upon the
application of any person, may issue a license subject to the same limitations
as an operator's license under section 77-3002. If the applicant is an
individual, the application shall include the applicant's social security
number. The license fee for a manufacturer of a cash device shall be ten
thousand dollars. The Department of Revenue shall remit all license fees
collected by the department pursuant to this section to the State Treasurer for
credit to the Department of Revenue Enforcement Fund.
(2)(a) Each applicant for or person holding a license as a manufacturer of
a cash device shall be subject to a background check at any time by the
department including fingerprinting and a check of his or her criminal history
record information maintained by the Identification Division of the Federal
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Bureau of Investigation through the Nebraska State Patrol for the purpose of
determining whether the Department of Revenue has a basis to deny the license
application or to suspend, cancel, revoke, or terminate the person's license.
Each applicant for or person holding a license pursuant to this section shall
also submit a personal history report to the department on a form provided by
the department and may be subject to a background investigation, an inspection
of the applicant's or licensee's facilities, or both. An applicant or licensee
shall pay the costs associated with the background check and any required fees
as determined by the department.
(b) The Tax Commissioner has the authority to deny a license for a
manufacturer of a cash device for cause. Cause for denial of a license
application includes instances in which the applicant individually, or in the
case of a business entity, any officer, director, employee, or limited
liability company member of the applicant or licensee other than an employee
whose duties are purely ministerial in nature:
(i) Violated the provisions, requirements, conditions, limitations, or
duties imposed by the Mechanical Amusement Device Tax Act or any rules or
regulations adopted and promulgated pursuant to the act;
(ii) Knowingly caused, aided, abetted, or conspired with another to cause
any person to violate any of the provisions of the act or any rules or
regulations adopted and promulgated pursuant to the act;
(iii) Obtained a license or permit under the act by fraud,
misrepresentation, or concealment;
(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded
guilty or nolo contendere to any offense or crime, whether a felony or a
misdemeanor, involving any gambling activity or fraud, theft, willful failure
to make required payments or reports, or filing false reports with a
governmental agency at any level;
(v) Denied the department or its authorized representatives, including
authorized law enforcement agencies, access to any place where activity
required to be licensed under the act is being conducted or failed to produce
for inspection or audit any book, record, document, or item required by law,
rule, or regulation;
(vi) Made a misrepresentation of or failed to disclose a material fact to
the department;
(vii) Failed to prove by clear and convincing evidence such applicant's
qualifications to be licensed in accordance with the act;
(viii) Failed to pay any taxes and additions to taxes, including penalties
and interest required by the act or any other taxes imposed pursuant to the
Nebraska Revenue Act of 1967; or
(ix) Has been cited for a violation of the Nebraska Liquor Control Act and
had a liquor license suspended, canceled, or revoked by the Nebraska Liquor
Control Commission for illegal gambling activities on or about the premises
licensed by the commission pursuant to the Nebraska Liquor Control Act or the
rules and regulations adopted and promulgated pursuant to such act.
(c) No renewal of a license pursuant to this section shall be issued when
the applicant for renewal would not be eligible for a license upon a first
application.
(3) The Tax Commissioner has the authority to suspend or revoke the
license of any manufacturer of a cash device that is in violation of the
Mechanical Amusement Device Tax Act.
Sec. 33. Section 77-3004, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-3004 (1) An occupation tax is hereby imposed and levied, in the amount
and in accordance with the terms and conditions stated in this section, upon
the business of operating mechanical amusement devices that are not cash
devices within the State of Nebraska for profit or gain either directly or
indirectly received. Every person who now or hereafter engages in the business
of operating such mechanical amusement devices that are not cash devices in the
State of Nebraska shall pay such occupation tax in the amount and manner
specified in this section.
(2) Any distributor or operator of a mechanical amusement device that is
not a cash device within the State of Nebraska shall pay an occupation tax for
each such mechanical amusement device which he or she places into operation
during all of the taxable year. The occupation tax shall be due and payable on
January 1 of each year on each mechanical amusement device that is not a cash
device in operation on that date, except that it shall be unlawful to pay any
such occupation tax unless the sales or use tax has been paid on such
mechanical amusement devices. For every mechanical amusement device that is not
a cash device put into operation on a date subsequent to January 1, and which
has not been included in computing the occupation tax imposed and levied by the
Mechanical Amusement Device Tax Act, the occupation tax shall be due and
payable therefor prior to the time the mechanical amusement device is placed in
operation. All occupation taxes collected pursuant to the act shall be remitted
to the State Treasurer for credit to the General Fund.
(3) The amount of the occupation tax for each mechanical amusement device
that is not a cash device shall be:
(a) Thirty-five thirty-five dollars for each mechanical amusement device
that is not a cash device for any period beginning on or after January 1, 2000,
and prior to January 1, 2027, except that for such mechanical amusement devices
placed in operation after July 1, and before January 1 of any such each year,
the occupation tax shall be twenty dollars for each mechanical amusement
device; and .
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(b) For calendar year 2027 and each calendar year thereafter, seventy
dollars.
(4) The occupation taxes collected pursuant to this section shall be
remitted to the State Treasurer for credit as follows:
(a) Twenty percent of such amount to the Department of Revenue Enforcement
Fund; and
(b) Eighty percent of such amount to the General Fund.
Sec. 34. Section 77-3006, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-3006 (1) The administration of the Mechanical Amusement Device Tax Act
is hereby vested in the Tax Commissioner subject to other provisions of law
relating to the Tax Commissioner. The Tax Commissioner may prescribe, adopt and
promulgate, and enforce rules and regulations relating to the administration
and enforcement of the act and may delegate authority to his or her
representatives to conduct hearings or perform any other duties imposed under
the act. The Tax Commissioner shall may adopt and promulgate rules and
regulations necessary to carry out section 77-3003.01. Such rules and
regulations shall include standards for determining when advertising or
packaging is used to appeal to minors or primarily marketed to minors.
(2) The department has the authority to review all documents between a
distributor, manufacturer, and operator regarding a cash device. Such documents
shall include, but not be limited to, any a contract, agreement, lease,
revenue-sharing agreement, profit-sharing document, annual report, tax filing,
or bill of sale.
(3) The department has the authority to approve all cash device locations
across the state. No cash device shall be moved from such cash device's
approved location without the prior approval of the department.
(4) The department shall establish retail establishment location standards
required for the placement of any cash device in this state.
(5) The following factors shall be considered for the issuance of a
license to operate a cash device at a particular retail establishment location:
(a) Whether there are physical walls separating a retail establishment
operating a cash device from other businesses located in the same building;
(b) Whether there are dedicated entrances and exits to the retail
establishment;
(c) Whether a separate sales tax permit has been obtained by the retail
establishment;
(d) Whether the retail establishment has separate points of sale;
(e) Whether the retail establishment has separate points of ticket
redemption;
(f) Whether there is diversity of merchandise for sale in the retail
establishment;
(g) Whether the retail establishment issues a receipt for sales;
(h) The number of dedicated employees on duty at the same time at the
retail establishment;
(i) The level of business activity being conducted in the retail
establishment;
(j) Whether the physical space for the retail establishment within the
building is contiguous to other businesses; and
(k) Whether there are distinct owners or officers of the retail
establishment within the shared building.
Sec. 35. Section 77-3012, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-3012 (1) Except as otherwise provided in subsection (5) of this
section, a tax is hereby imposed and levied, in the amount and in accordance
with this section, upon the net operating revenue of all cash devices operating
within the State of Nebraska for profit or gain either directly or indirectly
received. The tax shall be paid in the amount and manner specified in this
section.
(2) Except as otherwise provided in subsection (5) of this section,
beginning on and after July 1, 2025, any distributor of a cash device, and any
operator of a cash device if the operator is not subject to a revenue-sharing
or other agreement with a distributor who is paying the tax, shall pay a tax
for each cash device in operation each calendar quarter during the taxable
year. The tax shall be collected by the department and due and payable on
January 1, April 1, July 1, and October 1 of each year on each cash device in
operation during the preceding calendar quarter. For each cash device put into
operation on a date subsequent to a quarterly due date that has not been
included in computing the tax imposed and levied by the Mechanical Amusement
Device Tax Act, the tax shall be due and payable on the immediately succeeding
quarterly due date.
(3) The amount of the tax imposed and levied under this section shall be
ten five percent of the net operating revenue for each cash device. The
quarterly tax shall be submitted on a form prescribed by the Tax Commissioner
documenting the total gross and net operating revenue for that quarter.
(4) The Tax Commissioner shall remit the taxes collected pursuant to this
section to the State Treasurer for credit as follows:
(a) Nine and seventy-five hundredths Twenty percent to the Department of
Revenue Enforcement Charitable Gaming Operations Fund for enforcement of the
act and maintenance of the central server;
(b) Two and twenty-five hundredths one-half percent to the Compulsive
Gamblers Assistance Fund;
(c) Forty-six and seventy-five hundredths Two and one-half percent to the
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General Fund;
(d) Five Ten percent to the Nebraska Tourism Commission Promotional Cash
Fund;
(e) Twenty Forty percent to the Property Tax Credit Cash Fund; and
(f) Three and seventy-five hundredths percent to the Behavioral Health
Services Fund; and
(g) (f) The remaining twelve and one-half twenty-five percent to the
county treasurer of the county in which the cash device is located to be
distributed as follows: (i) If the cash device is located completely within an
unincorporated area of a county, the remaining twelve and one-half twenty-five
percent shall be distributed to the county in which the cash device is located,
or (ii) if the cash device is located within the limits of a city or village in
such county, one-half of the remaining twelve and one-half twenty-five percent
shall be distributed to such county and one-half of the remaining twelve and
one-half twenty-five percent shall be distributed to the city or village in
which such cash device is located.
(5) This section does not apply to cash devices operated by a fraternal
benefit society organized and licensed under sections 44-1072 to 44-10,109 or a
recognized veterans organization as defined in section 80-401.01.
Sec. 36. Section 77-5601, Revised Statutes Supplement, 2025, is amended to
read:
77-5601 (1) From August 1, 2004, through October 31, 2004, there shall be
conducted a tax amnesty program with regard to taxes due and owing that have
not been reported to the Department of Revenue. Any person applying for tax
amnesty shall pay all unreported taxes that were due on or before April 1,
2004. Any person that applies for tax amnesty and is accepted by the Tax
Commissioner shall have any penalties and interest waived on unreported and
delinquent taxes notwithstanding any other provisions of law to the contrary.
(2) To be eligible for the tax amnesty provided by this section, the
person shall apply for amnesty within the amnesty period, file a return for
each taxable period for which the amnesty is requested by December 31, 2004, if
no return has been filed, and pay in full all taxes for which amnesty is sought
with the return or within thirty days after the application if a return was
filed prior to the amnesty period. Tax amnesty shall not be available for any
person that is under civil or criminal audit, investigation, or prosecution for
unreported or delinquent taxes by this state or the United States Government on
or before April 16, 2004.
(3) The department shall not seek civil or criminal prosecution against
any person for any taxable period for which amnesty has been granted. The Tax
Commissioner shall develop forms for applying for the tax amnesty program,
develop procedures for qualification for tax amnesty, and conduct a public
awareness campaign publicizing the program.
(4) If a person elects to participate in the amnesty program, the election
shall constitute an express and irrevocable relinquishment of all
administrative and judicial rights to challenge the imposition of the tax or
its amount. Nothing in this section shall prohibit the department from
adjusting a return as a result of any state or federal audit.
(5)(a) Except for any local option sales tax collected and returned to the
appropriate municipality and any motor vehicle fuel, diesel fuel, and
compressed fuel taxes, which shall be deposited in the Highway Trust Fund or
Highway Allocation Fund as provided by law, no less than eighty percent of all
revenue received pursuant to the tax amnesty program shall be deposited in the
General Fund and ten percent, not to exceed five hundred thousand dollars,
shall be deposited in the Department of Revenue Enforcement Fund. Any amount
that would otherwise be deposited in the Department of Revenue Enforcement Fund
that is in excess of the five-hundred-thousand-dollar limitation shall be
deposited in the General Fund.
(b) For fiscal year 2005-06, all proceeds in the Department of Revenue
Enforcement Fund shall be appropriated to the department for purposes of
employing investigators, agents, and auditors and otherwise increasing
personnel for enforcement of the Nebraska Revenue Act of 1967.
(c) For fiscal years after fiscal year 2005-06, twenty percent of all
proceeds received during the previous calendar year due to the efforts of
auditors and investigators hired pursuant to subdivision (5)(b) of this
section, not to exceed seven hundred fifty thousand dollars, shall be deposited
in the Department of Revenue Enforcement Fund for purposes of employing
investigators and auditors or continuing such employment for purposes of
increasing enforcement of the act.
(d) Ten percent of all proceeds received during each calendar year due to
the contracts entered into pursuant to section 77-367 shall be deposited in the
Department of Revenue Enforcement Fund for purposes of identifying nonfilers of
returns, underreporters, nonpayers of taxes, and improper or fraudulent
payments.
(6)(a) The department shall prepare a report by April 1, 2005, and by
February 1 of each year thereafter detailing the results of the tax amnesty
program and the subsequent enforcement efforts. For the report due April 1,
2005, the report shall include (i) the amount of revenue obtained as a result
of the tax amnesty program broken down by tax program, (ii) the amount obtained
from instate taxpayers and from out-of-state taxpayers, and (iii) the amount
obtained from individual taxpayers and from business enterprises.
(b) For reports due in subsequent years, the report shall include (i) the
number of personnel hired for purposes of subdivision (5)(b) of this section
and their duties, (ii) a description of lists, software, programming, computer
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equipment, and other technological methods acquired and the purposes of each,
and (iii) the amount of new revenue obtained as a result of the new personnel
and acquisitions during the prior calendar year, broken down into the same
categories as described in subdivision (6)(a) of this section.
(7)(a) (7) The Department of Revenue Enforcement Fund is created. The
money in the fund shall be used by the Department of Revenue for the
administration and enforcement of any activity or function administered by the
Tax Commissioner.
(b) Transfers may be made from the Department of Revenue Enforcement Fund
to the General Fund at the direction of the Legislature. The Department of
Revenue Enforcement Fund may receive transfers from the Civic and Community
Center Financing Fund at the direction of the Legislature for the purpose of
administering the Sports Arena Facility Financing Assistance Act. The
Department of Revenue Enforcement Fund shall include any money credited to the
fund (a) under section 77-2703, and such money shall be used by the Department
of Revenue to defray the costs incurred to implement Laws 2019, LB237, (b)
under the Mechanical Amusement Device Tax Act, and such money shall be used by
the department to defray the costs incurred to implement and enforce Laws 2019,
LB538, and any rules and regulations adopted and promulgated to carry out Laws
2019, LB538, (c) under section 77-2906, and such money shall be used by the
Department of Revenue to defray the costs incurred to implement Laws 2020,
LB310, (d) under the Kratom Consumer Protection Act, and such money shall be
used by the Department of Revenue to defray the costs incurred to administer
the act, and (e) under section 77-3,124.
(c) Any money in the Department of Revenue Enforcement Fund available for
investment shall be invested by the state investment officer pursuant to the
Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.
Beginning October 1, 2024, any investment earnings from investment of money in
the fund shall be credited to the General Fund.
(8) For purposes of this section, taxes mean any taxes collected by the
department, including, but not limited to state and local sales and use taxes,
individual and corporate income taxes, financial institutions deposit taxes,
motor vehicle fuel, diesel fuel, and compressed fuel taxes, cigarette taxes,
transfer taxes, and charitable gaming taxes.
Sec. 37. Section 77-5804, Reissue Revised Statutes of Nebraska, is amended
to read:
77-5804 (1) The credit allowed under section 77-5803 may be used (a) to
obtain a refund of state sales and use taxes paid or (b) , may be used against
the income tax liability of the taxpayer . , or may be used as a refundable
credit claimed on an income tax return of the taxpayer. The return need not
reflect any income tax liability owed by the taxpayer.
(2) A claim for the credit may be filed quarterly for refund of the state
sales and use taxes paid, either directly or indirectly, after the filing of
the income tax return for the tax year in which the credit was first allowed.
(3) The credit may be used to obtain a refund of state sales and use taxes
paid before the end of the tax year for which the credit was allowed, except
that the amount refunded under this subsection shall not exceed the amount of
the state sales and use taxes paid, either directly or indirectly, by the
taxpayer on the qualifying expenditures.
(4) Credits distributed to a partner, limited liability company member,
shareholder, or beneficiary may be used against the income tax liability of the
partner, member, shareholder, or beneficiary receiving the credits.
(5) Interest shall not be allowed on any taxes refunded under the Nebraska
Advantage Research and Development Act.
Sec. 38. Section 77-6818, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
77-6818 (1) Qualified location means a location at which the majority of
the business activities conducted are within one or more of the following NAICS
codes or the following descriptions:
(a) Manufacturing - 31, 32, or 33, including pre-production services;
(b) Testing Laboratories - 541380;
(c) Rail Transportation - 482;
(d) Truck Transportation - 484;
(e) Insurance Carriers - 5241;
(f) Wired Telecommunications Carriers - 517311;
(g) Wireless Telecommunications Carriers (except Satellite) - 517312;
(h) Telemarketing Bureaus and Other Contact Centers - 561422;
(i) Data Processing, Hosting, and Related Services - 518210;
(j) Computer Facilities Management Services - 541513;
(k) Warehousing and Storage - 4931;
(l) The administrative management of the taxpayer's activities, including
headquarter facilities relating to such activities, or the administrative
management of any of the activities of any business entity or entities in which
the taxpayer or a group of its owners hold any direct or indirect ownership
interest of at least ten percent, including headquarter facilities relating to
such activities;
(m) Logistics Facilities - Portions of NAICS 488210, 488310, and 488490
dealing with independently operated trucking terminals, independently operated
railroad and railway terminals, and waterfront terminal and port facility
operations;
(n) Services provided on aircraft brought into this state by an individual
who is a resident of another state or any other person who has a business
location in another state when the aircraft is not to be registered or based in
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this state and will not remain in this state more than ten days after the
service is completed;
(o) The conducting of research, development, or testing, or any
combination thereof, for scientific, agricultural, animal husbandry, food
product, industrial, or technology purposes;
(p) The production of electricity by using one or more sources of
renewable energy to produce electricity for sale. For purposes of this
subdivision, sources of renewable energy includes, but is not limited to, wind,
solar, energy storage, geothermal, hydroelectric, biomass, nuclear, and
transmutation of elements;
(q) Computer Systems Design and Related Services - 5415;
(r) The performance of financial services. For purposes of this
subdivision, financial services includes only financial services provided by
any financial institution subject to tax under Chapter 77, article 38, or any
person or entity licensed by the Department of Banking and Finance or the
federal Securities and Exchange Commission;
(s) Postharvest Crop Activities (except Cotton Ginning) - 115114; or
(t) The processing of tangible personal property. For purposes of this
subdivision, processing means to subject to a particular method, system, or
technique of preparation, handling, or other treatment designed to prepare
tangible personal property for market, manufacture, or other commercial use
which does not result in the transformation of such property into a
substantially different character. ; or
(u) Waste Treatment and Disposal - 5622.
(2)(a) Qualified location also includes any other business location if at
least seventy-five percent of the revenue derived at the location is from sales
to customers who are not related persons which are delivered or provided from
the qualified location to a location that is not within Nebraska according to
the sourcing rules in subsections (2) and (3) of section 77-2734.14.
Intermediate sales to related persons are included as sales to customers
delivered or provided to a location outside Nebraska if the related person
delivers or provides the goods or services to a location outside Nebraska. Even
if a location meets the seventy-five percent requirement of this subdivision,
such location shall not constitute a qualified location under this subdivision
if the majority of the business activities conducted at such location are
within any of the following NAICS codes or any combination thereof:
(i) Agriculture, Forestry, Fishing and Hunting - 11, excluding NAICS code
115114;
(ii) Transportation and Warehousing - 48-49;
(iii) Information - 51;
(iv) Utilities - 22;
(v) Mining, Quarrying, and Oil and Gas Extraction - 21;
(vi) Public Administration - 92; or
(vii) Construction - 23.
(b) The director may adopt and promulgate rules and regulations
establishing an alternative method in circumstances in which subdivision (2)(a)
of this section does not accurately reflect the out-of-state sales taking place
at locations within Nebraska for a particular industry.
(3) The determination of the majority of the business activities shall be
made based on the number of employees working in the respective business
activities. The director may adopt and promulgate rules and regulations
establishing an alternative method in circumstances in which other factors
provide a better reflection of business activities.
(4) The delineation of the types of business activities which enable a
location to constitute a qualified location is based on the state's intention
to attract certain types of business activities and to responsibly accomplish
the purposes of the ImagiNE Nebraska Act by directing the state's incentive
capabilities towards business activities which, due to their national nature,
could locate outside of Nebraska and which therefore would, through the use of
incentives, be motivated to locate in Nebraska. By listing specific types of
business activities in subsection (1) of this section, the state has determined
such business activities by their nature meet these objectives. By specifying
the national nature of a taxpayer's revenue in subsection (2) of this section,
the state has determined that certain other types of business activities can
meet these objectives.
Sec. 39. Sections 5, 6, 7, 15, 16, 17, 18, 19, 20, 21, 22, 23, 27, 28,
36, 37, 38, 40, and 43 of this act become operative on July 1, 2026. Sections
1, 2, 3, 4, 14, 24, 25, 26, and 41 of this act become operative on January 1,
2027. Sections 8, 9, 10, 11, 12, 13, 29, 30, 31, 32, 33, 34, 35, and 42 of this
act become operative three calendar months after the adjournment of this
legislative session. The other sections of this act become operative on their
effective date.
Sec. 40. Original sections 77-367, 77-377.01, 77-3,109, 77-3,118,
77-2704.46, 77-27,107, 77-27,235, and 77-5804, Reissue Revised Statutes of
Nebraska, sections 77-377.02, 77-382, 77-2704.12, and 77-6818, Revised Statutes
Cumulative Supplement, 2024, and sections 9-1,101, 77-3,110, and 77-5601,
Revised Statutes Supplement, 2025, are repealed.
Sec. 41. Original section 77-2717, Revised Statutes Cumulative
Supplement, 2024, and sections 77-202, 77-2715.07, and 77-2734.03, Revised
Statutes Supplement, 2025, are repealed.
Sec. 42. Original sections 77-3003.01, 77-3003.02, 77-3004, 77-3006, and
77-3012, Revised Statutes Cumulative Supplement, 2024, and sections 71-812,
71-3801, 71-3809, 71-3810, 71-3812, 77-3003, and 77-3003.03, Revised Statutes
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Supplement, 2025, are repealed.
Sec. 43. The following sections are outright repealed: Sections
77-2701.54, 77-2704.57, 77-2704.60, 77-2704.61, and 77-2704.62, Reissue Revised
Statutes of Nebraska.
Sec. 44. Since an emergency exists, this act takes effect when passed and
approved according to law.
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