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--- version:Introduced+++ version:(document, no version)@@ -1,3120 +1,23 @@-LEGISLATURE OF NEBRASKA-ONE HUNDRED NINTH LEGISLATURE-FIRST SESSION-LEGISLATIVE BILL 650+One Hundred Ninth Legislature - First Session - 2025+Introducer's Statement of Intent+LB650-Introduced by von Gillern, 4; at the request of the Governor.-Read first time January 22, 2025+Chairperson: Senator R. Brad von GillernCommittee: Revenue-A BILL FOR AN ACT relating to revenue and taxation; to amend section1-13-3106, Reissue Revised Statutes of Nebraska, and sections 77-908,2-77-2701.04, 77-2701.16, 77-2703, 77-2704.36, 77-2708, 77-2715.07,3-77-2716, 77-2717, 77-2733, 77-2734.03, 77-27,187.02, 77-27,188,4-77-27,241, 77-3109, 77-3110, 77-3111, 77-3120, 77-3125, 77-3126,5-77-3136, 77-3143, 77-3152, 77-3169, 77-3806, 77-4405, 77-6605,6-77-6607, 77-6610, 77-6919, and 77-7012, Revised Statutes Cumulative7-Supplement, 2024; to provide a sunset date for applications8-involving sports complexes and large public stadiums under the9-Sports Arena Facility Financing Assistance Act; to eliminate sales10-tax exemptions relating to towers used for furnishing Internet11-access services, net wrap, and twine; to change sales tax collection12-fees; to change provisions relating to nonresident income and a food13-donation tax credit; to change provisions relating to tax credits14-allowed under the Nebraska Advantage Rural Development Act, the15-Relocation Incentive Act, the Creating High Impact Economic Futures16-Act, the Cast and Crew Nebraska Act, the Nebraska Shortline Rail17-Modernization Act, the Nebraska Pregnancy Help Act, the Reverse18-Osmosis System Tax Credit Act, the Renewable Chemical Production Tax19-Credit Act, and the Nebraska Biodiesel Tax Credit Act; to provide20-and change sunset dates for the approval of applications under the21-Good Life Transformational Projects Act and the Urban Redevelopment22-Act; to eliminate the Sustainable Aviation Fuel Tax Credit Act and23-LB650-2025-LB650-2025--1--provisions relating to the appointment of purchasing agents; to1-harmonize provisions; to provide operative dates; to repeal the2-original sections; to outright repeal sections 77-2701.56,3-77-2706.02, 77-7017, 77-7018, 77-7019, 77-7020, 77-7021, and4-77-7022, Revised Statutes Cumulative Supplement, 2024; and to5-declare an emergency. 6-Be it enacted by the people of the State of Nebraska,7-LB650-2025-LB650-2025--2--Section 1. Section 13-3106, Reissue Revised Statutes of Nebraska, is1-amended to read: 2-13-3106 (1) After consideration of the application and the evidence,3-if the board finds that the project described in the application is4-eligible and that state assistance is in the best interest of the state,5-the application shall be approved, except that an approval of an6-application submitted because of the requirement in subdivision (1)(c) of7-section 13-3103 is a temporary approval. If the general obligation bond8-issue is subsequently approved by the voters of the political9-subdivision, the approval by the board becomes permanent. If the general10-obligation bond issue is not approved by such voters, the temporary11-approval shall become void. 12-(2) In determining whether state assistance is in the best interest13-of the state, the board shall consider the fiscal and economic capacity14-of the applicant to finance the local share of the project.15-(3) A majority of the board members constitutes a quorum for the16-purpose of conducting business. All actions of the board shall be by a17-majority vote of all the board members, one of whom must be the Governor.18-(4) The board shall not approve any application involving a sports19-complex or a large public stadium on or after the operative date of this20-section. 21-Sec. 2. Section 77-908, Revised Statutes Cumulative Supplement,22-2024, is amended to read: 23-77-908 Every insurance company organized under the stock, mutual,24-assessment, or reciprocal plan, except fraternal benefit societies, which25-is transacting business in this state shall, on or before March 1 of each26-year, pay a tax to the director of one percent of the gross amount of27-direct writing premiums received by it during the preceding calendar year28-for business done in this state, except that (1) for group sickness and29-accident insurance the rate of such tax shall be five-tenths of one30-percent and (2) for property and casualty insurance, excluding individual31-LB650-2025-LB650-2025--3--sickness and accident insurance, the rate of such tax shall be one1-percent. A captive insurer authorized under the Captive Insurers Act that2-is transacting business in this state shall, on or before March 1 of each3-year, pay to the director a tax of one-fourth of one percent of the gross4-amount of direct writing premiums received by such insurer during the5-preceding calendar year for business transacted in the state. The taxable6-premiums shall include premiums paid on the lives of persons residing in7-this state and premiums paid for risks located in this state whether the8-insurance was written in this state or not, including that portion of a9-group premium paid which represents the premium for insurance on Nebraska10-residents or risks located in Nebraska included within the group when the11-number of lives in the group exceeds five hundred. The tax shall also12-apply to premiums received by domestic companies for insurance written on13-individuals residing outside this state or risks located outside this14-state if no comparable tax is paid by the direct writing domestic company15-to any other appropriate taxing authority. Companies whose scheme of16-operation contemplates the return of a portion of premiums to17-policyholders, without such policyholders being claimants under the terms18-of their policies, may deduct such return premiums or dividends from19-their gross premiums for the purpose of tax calculations. Any such20-insurance company shall receive a credit on the tax imposed as provided21-in the Creating High Impact Economic Futures Act, the Nebraska Job22-Creation and Mainstreet Revitalization Act, the New Markets Job Growth23-Investment Act, the Nebraska Higher Blend Tax Credit Act, the Relocation24-Incentive Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska25-Shortline Rail Modernization Act, and the Affordable Housing Tax Credit26-Act. 27-Sec. 3. Section 77-2701.04, Revised Statutes Cumulative Supplement,28-2024, is amended to read: 29-77-2701.04 For purposes of sections 77-2701.04 to 77-2713 and30-77-27,239, unless the context otherwise requires, the definitions found31-LB650-2025-LB650-2025--4--in sections 77-2701.05 to 77-2701.55 77-2701.56 shall be used.1-Sec. 4. Section 77-2701.16, Revised Statutes Cumulative Supplement,2-2024, is amended to read: 3-77-2701.16 (1) Gross receipts means the total amount of the sale or4-lease or rental price, as the case may be, of the retail sales of5-retailers. 6-(2) Gross receipts of every person engaged as a public utility7-specified in this subsection, as a community antenna television service8-operator, or as a satellite service operator or any person involved in9-connecting and installing services defined in subdivision (2)(a), (b), or10-(d) of this section means: 11-(a)(i) In the furnishing of telephone communication service, other12-than mobile telecommunications service as described in section13-77-2703.04, the gross income received from furnishing ancillary services,14-except for conference bridging services, and intrastate15-telecommunications services, except for value-added, nonvoice data16-service. 17-(ii) In the furnishing of mobile telecommunications service as18-described in section 77-2703.04, the gross income received from19-furnishing mobile telecommunications service that originates and20-terminates in the same state to a customer with a place of primary use in21-Nebraska; 22-(b) In the furnishing of telegraph service, the gross income23-received from the furnishing of intrastate telegraph services;24-(c)(i) In the furnishing of gas, sewer, water, and electricity25-service, other than electricity service to a customer-generator as26-defined in section 70-2002, the gross income received from the furnishing27-of such services upon billings or statements rendered to consumers for28-such utility services. 29-(ii) In the furnishing of electricity service to a customer-30-generator as defined in section 70-2002, the net energy use upon billings31-LB650-2025-LB650-2025--5--or statements rendered to customer-generators for such electricity1-service; 2-(d) In the furnishing of community antenna television service or3-satellite service, the gross income received from the furnishing of such4-community antenna television service as regulated under sections 18-22015-to 18-2205 or 23-383 to 23-388 or satellite service; and6-(e) The gross income received from the provision, installation,7-construction, servicing, or removal of property used in conjunction with8-the furnishing, installing, or connecting of any public utility services9-specified in subdivision (2)(a) or (b) of this section or community10-antenna television service or satellite service specified in subdivision11-(2)(d) of this section, except when acting as a subcontractor for a12-public utility, this subdivision does not apply to the gross income13-received by a contractor electing to be treated as a consumer of building14-materials under subdivision (2) or (3) of section 77-2701.10 for any such15-services performed on the customer's side of the utility demarcation16-point. This subdivision also does not apply to the : (i) The gross income17-received by a political subdivision of the state, an electric18-cooperative, or an electric membership association for the lease or use19-of, or by a contractor for the construction of or services provided on,20-electric generation, transmission, distribution, or street lighting21-structures or facilities owned by a political subdivision of the state,22-an electric cooperative, or an electric membership association . ; or23-(ii) The gross income received for the lease or use of towers or24-other structures primarily used in conjunction with the furnishing of (A)25-Internet access services, (B) agricultural global positioning system26-locating services, or (C) over-the-air radio and television broadcasting27-licensed by the Federal Communications Commission, including antennas and28-studio transmitter link systems. For purposes of this subdivision, studio29-transmitter link system means a system which serves as a conduit to30-deliver audio from its origin in a studio to a broadcast transmitter.31-LB650-2025-LB650-2025--6--(3) Gross receipts of every person engaged in selling, leasing, or1-otherwise providing intellectual or entertainment property means:2-(a) In the furnishing of computer software, the gross income3-received, including the charges for coding, punching, or otherwise4-producing any computer software and the charges for the tapes, disks,5-punched cards, or other properties furnished by the seller; and6-(b) In the furnishing of videotapes, movie film, satellite7-programming, satellite programming service, and satellite television8-signal descrambling or decoding devices, the gross income received from9-the license, franchise, or other method establishing the charge.10-(4) Gross receipts for providing a service means:11-(a) The gross income received for building cleaning and maintenance,12-pest control, and security; 13-(b) The gross income received for motor vehicle washing, waxing,14-towing, and painting; 15-(c) The gross income received for computer software training;16-(d) The gross income received for installing and applying tangible17-personal property if the sale of the property is subject to tax. If any18-or all of the charge for installation is free to the customer and is paid19-by a third-party service provider to the installer, any tax due on that20-part of the activation commission, finder's fee, installation charge, or21-similar payment made by the third-party service provider shall be paid22-and remitted by the third-party service provider; 23-(e) The gross income received for services of recreational vehicle24-parks; 25-(f) The gross income received for labor for repair or maintenance26-services performed with regard to tangible personal property the sale of27-which would be subject to sales and use taxes, excluding motor vehicles,28-except as otherwise provided in section 77-2704.26 or 77-2704.50;29-(g) The gross income received for animal specialty services except30-(i) veterinary services, (ii) specialty services performed on livestock31-LB650-2025-LB650-2025--7--as defined in section 54-183, and (iii) animal grooming performed by a1-licensed veterinarian or a licensed veterinary technician in conjunction2-with medical treatment; and 3-(h) The gross income received for detective services.4-(5) Gross receipts includes the sale of admissions. When an5-admission to an activity or a membership constituting an admission is6-combined with the solicitation of a contribution, the portion or the7-amount charged representing the fair market price of the admission shall8-be considered a retail sale subject to the tax imposed by section9-77-2703. The organization conducting the activity shall determine the10-amount properly attributable to the purchase of the privilege, benefit,11-or other consideration in advance, and such amount shall be clearly12-indicated on any ticket, receipt, or other evidence issued in connection13-with the payment. 14-(6) Gross receipts includes the sale of live plants incorporated15-into real estate except when such incorporation is incidental to the16-transfer of an improvement upon real estate or the real estate.17-(7) Gross receipts includes the sale of any building materials18-annexed to real estate by a person electing to be taxed as a retailer19-pursuant to subdivision (1) of section 77-2701.10.20-(8) Gross receipts includes the sale of and recharge of prepaid21-calling service and prepaid wireless calling service.22-(9) Gross receipts includes the retail sale of digital audio works,23-digital audiovisual works, digital codes, and digital books delivered24-electronically if the products are taxable when delivered on tangible25-storage media. A sale includes the transfer of a permanent right of use,26-the transfer of a right of use that terminates on some condition, and the27-transfer of a right of use conditioned upon the receipt of continued28-payments. 29-(10) Gross receipts includes any receipts from sales of tangible30-personal property made over a multivendor marketplace platform that acts31-LB650-2025-LB650-2025--8--as the intermediary by facilitating sales between a seller and the1-purchaser and that, either directly or indirectly through agreements or2-arrangements with third parties, collects payment from the purchaser and3-transmits payment to the seller. 4-(11) Gross receipts does not include: 5-(a) The amount of any rebate granted by a motor vehicle or motorboat6-manufacturer or dealer at the time of sale of the motor vehicle or7-motorboat, which rebate functions as a discount from the sales price of8-the motor vehicle or motorboat; or 9-(b) The price of property or services returned or rejected by10-customers when the full sales price is refunded either in cash or credit.11-Sec. 5. Section 77-2703, Revised Statutes Cumulative Supplement,12-2024, is amended to read: 13-77-2703 (1) There is hereby imposed a tax at the rate provided in14-section 77-2701.02 upon the gross receipts from all sales of tangible15-personal property sold at retail in this state; the gross receipts of16-every person engaged as a public utility, as a community antenna17-television service operator, or as a satellite service operator, any18-person involved in the connecting and installing of the services defined19-in subdivision (2)(a), (b), (d), or (e) of section 77-2701.16, or every20-person engaged as a retailer of intellectual or entertainment properties21-referred to in subsection (3) of section 77-2701.16; the gross receipts22-from the sale of admissions in this state; the gross receipts from the23-sale of warranties, guarantees, service agreements, or maintenance24-agreements when the items covered are subject to tax under this section;25-beginning January 1, 2008, the gross receipts from the sale of bundled26-transactions when one or more of the products included in the bundle are27-taxable; the gross receipts from the provision of services defined in28-subsection (4) of section 77-2701.16; and the gross receipts from the29-sale of products delivered electronically as described in subsection (9)30-of section 77-2701.16. Except as provided in section 77-2701.03, when31-LB650-2025-LB650-2025--9--there is a sale, the tax shall be imposed at the rate in effect at the1-time the gross receipts are realized under the accounting basis used by2-the retailer to maintain his or her books and records.3-(a) The tax imposed by this section shall be collected by the4-retailer from the consumer. It shall constitute a part of the purchase5-price and until collected shall be a debt from the consumer to the6-retailer and shall be recoverable at law in the same manner as other7-debts. The tax required to be collected by the retailer from the consumer8-constitutes a debt owed by the retailer to this state.9-(b) It is unlawful for any retailer to advertise, hold out, or state10-to the public or to any customer, directly or indirectly, that the tax or11-part thereof will be assumed or absorbed by the retailer, that it will12-not be added to the selling, renting, or leasing price of the property13-sold, rented, or leased, or that, if added, it or any part thereof will14-be refunded. The provisions of this subdivision shall not apply to a15-public utility. 16-(c) The tax required to be collected by the retailer from the17-purchaser, unless otherwise provided by statute or by rule and regulation18-of the Tax Commissioner, shall be displayed separately from the list19-price, the price advertised in the premises, the marked price, or other20-price on the sales check or other proof of sales, rentals, or leases.21-(d) For the purpose of more efficiently securing the payment,22-collection, and accounting for the sales tax and for the convenience of23-the retailer in collecting the sales tax, it shall be the duty of the Tax24-Commissioner to provide a schedule or schedules of the amounts to be25-collected from the consumer or user to effectuate the computation and26-collection of the tax imposed by the Nebraska Revenue Act of 1967. Such27-schedule or schedules shall provide that the tax shall be collected from28-the consumer or user uniformly on sales according to brackets based on29-sales prices of the item or items. Retailers may compute the tax due on30-any transaction on an item or an invoice basis. The rounding rule31-LB650-2025-LB650-2025--10--provided in section 77-3,117 applies. 1-(e) The use of tokens or stamps for the purpose of collecting or2-enforcing the collection of the taxes imposed in the Nebraska Revenue Act3-of 1967 or for any other purpose in connection with such taxes is4-prohibited. 5-(f) For the purpose of the proper administration of the provisions6-of the Nebraska Revenue Act of 1967 and to prevent evasion of the retail7-sales tax, it shall be presumed that all gross receipts are subject to8-the tax until the contrary is established. The burden of proving that a9-sale of property is not a sale at retail is upon the person who makes the10-sale unless he or she takes from the purchaser (i) a resale certificate11-to the effect that the property is purchased for the purpose of12-reselling, leasing, or renting it, (ii) an exemption certificate pursuant13-to subsection (7) of section 77-2705, or (iii) a direct payment permit14-pursuant to sections 77-2705.01 to 77-2705.03. Receipt of a resale15-certificate, exemption certificate, or direct payment permit shall be16-conclusive proof for the seller that the sale was made for resale or was17-exempt or that the tax will be paid directly to the state.18-(g) In the rental or lease of automobiles, trucks, trailers,19-semitrailers, and truck-tractors as defined in the Motor Vehicle20-Registration Act, the tax shall be collected by the lessor on the rental21-or lease price, except as otherwise provided within this section.22-(h) In the rental or lease of automobiles, trucks, trailers,23-semitrailers, and truck-tractors as defined in the act, for periods of24-one year or more, the lessor may elect not to collect and remit the sales25-tax on the gross receipts and instead pay a sales tax on the cost of such26-vehicle. If such election is made, it shall be made pursuant to the27-following conditions: 28-(i) Notice of the desire to make such election shall be filed with29-the Tax Commissioner and shall not become effective until the Tax30-Commissioner is satisfied that the taxpayer has complied with all31-LB650-2025-LB650-2025--11--conditions of this subsection and all rules and regulations of the Tax1-Commissioner; 2-(ii) Such election when made shall continue in force and effect for3-a period of not less than two years and thereafter until such time as the4-lessor elects to terminate the election; 5-(iii) When such election is made, it shall apply to all vehicles of6-the lessor rented or leased for periods of one year or more except7-vehicles to be leased to common or contract carriers who provide to the8-lessor a valid common or contract carrier exemption certificate. If the9-lessor rents or leases other vehicles for periods of less than one year,10-such lessor shall maintain his or her books and records and his or her11-accounting procedure as the Tax Commissioner prescribes; and12-(iv) The Tax Commissioner by rule and regulation shall prescribe the13-contents and form of the notice of election, a procedure for the14-determination of the tax base of vehicles which are under an existing15-lease at the time such election becomes effective, the method and manner16-for terminating such election, and such other rules and regulations as17-may be necessary for the proper administration of this subdivision.18-(i) The tax imposed by this section on the sales of motor vehicles,19-semitrailers, and trailers as defined in sections 60-339, 60-348, and20-60-354 shall be the liability of the purchaser and, with the exception of21-motor vehicles, semitrailers, and trailers registered pursuant to section22-60-3,198, the tax shall be collected by the county treasurer as provided23-in the Motor Vehicle Registration Act or by an approved licensed dealer24-participating in the electronic dealer services system pursuant to25-section 60-1507 at the time the purchaser makes application for the26-registration of the motor vehicle, semitrailer, or trailer for operation27-upon the highways of this state. The tax imposed by this section on motor28-vehicles, semitrailers, and trailers registered pursuant to section29-60-3,198 shall be collected by the Department of Motor Vehicles at the30-time the purchaser makes application for the registration of the motor31-LB650-2025-LB650-2025--12--vehicle, semitrailer, or trailer for operation upon the highways of this1-state. At the time of the sale of any motor vehicle, semitrailer, or2-trailer, the seller shall (i) state on the sales invoice the dollar3-amount of the tax imposed under this section and (ii) furnish to the4-purchaser a certified statement of the transaction, in such form as the5-Tax Commissioner prescribes, setting forth as a minimum the total sales6-price, the allowance for any trade-in, and the difference between the7-two. The sales tax due shall be computed on the difference between the8-total sales price and the allowance for any trade-in as disclosed by such9-certified statement. Any seller who willfully understates the amount upon10-which the sales tax is due shall be subject to a penalty of one thousand11-dollars. A copy of such certified statement shall also be furnished to12-the Tax Commissioner. Any seller who fails or refuses to furnish such13-certified statement shall be guilty of a misdemeanor and shall, upon14-conviction thereof, be punished by a fine of not less than twenty-five15-dollars nor more than one hundred dollars. If the purchaser does not16-register such motor vehicle, semitrailer, or trailer for operation on the17-highways of this state within thirty days of the purchase thereof, the18-tax imposed by this section shall immediately thereafter be paid by the19-purchaser to the county treasurer or the Department of Motor Vehicles. If20-the tax is not paid on or before the thirtieth day after its purchase,21-the county treasurer or Department of Motor Vehicles shall also collect22-from the purchaser interest from the thirtieth day through the date of23-payment and sales tax penalties as provided in the Nebraska Revenue Act24-of 1967. The county treasurer or Department of Motor Vehicles shall25-report and remit the tax so collected to the Tax Commissioner by the26-fifteenth day of the following month. The county treasurer, for his or27-her collection fee, shall deduct and withhold, from all amounts required28-to be collected under this subsection, the collection fee permitted to be29-deducted by any retailer collecting the sales tax, all of which shall be30-deposited in the county general fund, plus an additional amount equal to31-LB650-2025-LB650-2025--13--one-half of one percent of all amounts in excess of six thousand dollars1-remitted each month. Prior to January 1, 2023, fifty percent of such2-additional amount shall be deposited in the county general fund and fifty3-percent of such additional amount shall be deposited in the county road4-fund. On and after January 1, 2023, seventy-five percent of such5-additional amount shall be deposited in the county general fund and6-twenty-five percent of such additional amount shall be deposited in the7-county road fund. In any county with a population of one hundred fifty8-thousand inhabitants or more, the county treasurer shall remit one dollar9-of his or her collection fee for each of the first five thousand motor10-vehicles, semitrailers, or trailers registered with such county treasurer11-on or after January 1, 2020, to the State Treasurer for credit to the12-Department of Revenue Enforcement Fund. The Department of Motor Vehicles,13-for its collection fee, shall deduct, withhold, and deposit in the Motor14-Carrier Division Cash Fund the collection fee permitted to be deducted by15-any retailer collecting the sales tax. The collection fee for the county16-treasurer or the Department of Motor Vehicles shall be forfeited if the17-county treasurer or department violates any rule or regulation pertaining18-to the collection of the use tax. 19-(j)(i) The tax imposed by this section on the sale of a motorboat as20-defined in section 37-1204 shall be the liability of the purchaser. The21-tax shall be collected by the county treasurer at the time the purchaser22-makes application for the registration of the motorboat. At the time of23-the sale of a motorboat, the seller shall (A) state on the sales invoice24-the dollar amount of the tax imposed under this section and (B) furnish25-to the purchaser a certified statement of the transaction, in such form26-as the Tax Commissioner prescribes, setting forth as a minimum the total27-sales price, the allowance for any trade-in, and the difference between28-the two. The sales tax due shall be computed on the difference between29-the total sales price and the allowance for any trade-in as disclosed by30-such certified statement. Any seller who willfully understates the amount31-LB650-2025-LB650-2025--14--upon which the sales tax is due shall be subject to a penalty of one1-thousand dollars. A copy of such certified statement shall also be2-furnished to the Tax Commissioner. Any seller who fails or refuses to3-furnish such certified statement shall be guilty of a misdemeanor and4-shall, upon conviction thereof, be punished by a fine of not less than5-twenty-five dollars nor more than one hundred dollars. If the purchaser6-does not register such motorboat within thirty days of the purchase7-thereof, the tax imposed by this section shall immediately thereafter be8-paid by the purchaser to the county treasurer. If the tax is not paid on9-or before the thirtieth day after its purchase, the county treasurer10-shall also collect from the purchaser interest from the thirtieth day11-through the date of payment and sales tax penalties as provided in the12-Nebraska Revenue Act of 1967. The county treasurer shall report and remit13-the tax so collected to the Tax Commissioner by the fifteenth day of the14-following month. The county treasurer, for his or her collection fee,15-shall deduct and withhold for the use of the county general fund, from16-all amounts required to be collected under this subsection, the17-collection fee permitted to be deducted by any retailer collecting the18-sales tax. The collection fee shall be forfeited if the county treasurer19-violates any rule or regulation pertaining to the collection of the use20-tax. 21-(ii) In the rental or lease of motorboats, the tax shall be22-collected by the lessor on the rental or lease price.23-(k)(i) The tax imposed by this section on the sale of an all-terrain24-vehicle as defined in section 60-103 or a utility-type vehicle as defined25-in section 60-135.01 shall be the liability of the purchaser. The tax26-shall be collected by the county treasurer or by an approved licensed27-dealer participating in the electronic dealer services system pursuant to28-section 60-1507 at the time the purchaser makes application for the29-certificate of title for the all-terrain vehicle or utility-type vehicle.30-At the time of the sale of an all-terrain vehicle or a utility-type31-LB650-2025-LB650-2025--15--vehicle, the seller shall (A) state on the sales invoice the dollar1-amount of the tax imposed under this section and (B) furnish to the2-purchaser a certified statement of the transaction, in such form as the3-Tax Commissioner prescribes, setting forth as a minimum the total sales4-price, the allowance for any trade-in, and the difference between the5-two. The sales tax due shall be computed on the difference between the6-total sales price and the allowance for any trade-in as disclosed by such7-certified statement. Any seller who willfully understates the amount upon8-which the sales tax is due shall be subject to a penalty of one thousand9-dollars. A copy of such certified statement shall also be furnished to10-the Tax Commissioner. Any seller who fails or refuses to furnish such11-certified statement shall be guilty of a misdemeanor and shall, upon12-conviction thereof, be punished by a fine of not less than twenty-five13-dollars nor more than one hundred dollars. If the purchaser does not14-obtain a certificate of title for such all-terrain vehicle or utility-15-type vehicle within thirty days of the purchase thereof, the tax imposed16-by this section shall immediately thereafter be paid by the purchaser to17-the county treasurer. If the tax is not paid on or before the thirtieth18-day after its purchase, the county treasurer shall also collect from the19-purchaser interest from the thirtieth day through the date of payment and20-sales tax penalties as provided in the Nebraska Revenue Act of 1967. The21-county treasurer shall report and remit the tax so collected to the Tax22-Commissioner by the fifteenth day of the following month. The county23-treasurer, for his or her collection fee, shall deduct and withhold for24-the use of the county general fund, from all amounts required to be25-collected under this subsection, the collection fee permitted to be26-deducted by any retailer collecting the sales tax. The collection fee27-shall be forfeited if the county treasurer violates any rule or28-regulation pertaining to the collection of the use tax.29-(ii) In the rental or lease of an all-terrain vehicle or a utility-30-type vehicle, the tax shall be collected by the lessor on the rental or31-LB650-2025-LB650-2025--16--lease price. 1-(iii) County treasurers are appointed as sales and use tax2-collectors for all sales of all-terrain vehicles or utility-type vehicles3-made outside of this state to purchasers or users of all-terrain vehicles4-or utility-type vehicles which are required to have a certificate of5-title in this state. The county treasurer shall collect the applicable6-use tax from the purchaser of an all-terrain vehicle or a utility-type7-vehicle purchased outside of this state at the time application for a8-certificate of title is made. The full use tax on the purchase price9-shall be collected by the county treasurer if a sales or occupation tax10-was not paid by the purchaser in the state of purchase. If a sales or11-occupation tax was lawfully paid in the state of purchase at a rate less12-than the tax imposed in this state, use tax must be collected on the13-difference as a condition for obtaining a certificate of title in this14-state. 15-(l) The Tax Commissioner shall adopt and promulgate necessary rules16-and regulations for determining the amount subject to the taxes imposed17-by this section so as to insure that the full amount of any applicable18-tax is paid in cases in which a sale is made of which a part is subject19-to the taxes imposed by this section and a part of which is not so20-subject and a separate accounting is not practical or economical.21-(2) A use tax is hereby imposed on the storage, use, or other22-consumption in this state of property purchased, leased, or rented from23-any retailer and on any transaction the gross receipts of which are24-subject to tax under subsection (1) of this section on or after June 1,25-1967, for storage, use, or other consumption in this state at the rate26-set as provided in subsection (1) of this section on the sales price of27-the property or, in the case of leases or rentals, of the lease or rental28-prices. 29-(a) Every person storing, using, or otherwise consuming in this30-state property purchased from a retailer or leased or rented from another31-LB650-2025-LB650-2025--17--person for such purpose shall be liable for the use tax at the rate in1-effect when his or her liability for the use tax becomes certain under2-the accounting basis used to maintain his or her books and records. His3-or her liability shall not be extinguished until the use tax has been4-paid to this state, except that a receipt from a retailer engaged in5-business in this state or from a retailer who is authorized by the Tax6-Commissioner, under such rules and regulations as he or she may7-prescribe, to collect the sales tax and who is, for the purposes of the8-Nebraska Revenue Act of 1967 relating to the sales tax, regarded as a9-retailer engaged in business in this state, which receipt is given to the10-purchaser pursuant to subdivision (b) of this subsection, shall be11-sufficient to relieve the purchaser from further liability for the tax to12-which the receipt refers. 13-(b) Every retailer engaged in business in this state and selling,14-leasing, or renting property for storage, use, or other consumption in15-this state shall, at the time of making any sale, collect any tax which16-may be due from the purchaser and shall give to the purchaser, upon17-request, a receipt therefor in the manner and form prescribed by the Tax18-Commissioner. 19-(c) The Tax Commissioner, in order to facilitate the proper20-administration of the use tax, may designate such person or persons as he21-or she may deem necessary to be use tax collectors and delegate to such22-persons such authority as is necessary to collect any use tax which is23-due and payable to the State of Nebraska. The Tax Commissioner may24-require of all persons so designated a surety bond in favor of the State25-of Nebraska to insure against any misappropriation of state funds so26-collected. The Tax Commissioner may require any tax official, city,27-county, or state, to collect the use tax on behalf of the state. All28-persons designated to or required to collect the use tax shall account29-for such collections in the manner prescribed by the Tax Commissioner.30-Nothing in this subdivision shall be so construed as to prevent the Tax31-LB650-2025-LB650-2025--18--Commissioner or his or her employees from collecting any use taxes due1-and payable to the State of Nebraska. 2-(d) All persons designated to collect the use tax and all persons3-required to collect the use tax shall forward the total of such4-collections to the Tax Commissioner at such time and in such manner as5-the Tax Commissioner may prescribe. Such collectors of the use tax shall6-deduct and withhold from the amount of taxes collected two and one-half7-three percent of the first three five thousand dollars remitted each8-month as reimbursement for the cost of collecting the tax. Any such9-deduction shall be forfeited to the State of Nebraska if such collector10-violates any rule, regulation, or directive of the Tax Commissioner.11-(e) For the purpose of the proper administration of the Nebraska12-Revenue Act of 1967 and to prevent evasion of the use tax, it shall be13-presumed that property sold, leased, or rented by any person for delivery14-in this state is sold, leased, or rented for storage, use, or other15-consumption in this state until the contrary is established. The burden16-of proving the contrary is upon the person who purchases, leases, or17-rents the property. 18-(f) For the purpose of the proper administration of the Nebraska19-Revenue Act of 1967 and to prevent evasion of the use tax, for the sale20-of property to an advertising agency which purchases the property as an21-agent for a disclosed or undisclosed principal, the advertising agency is22-and remains liable for the sales and use tax on the purchase the same as23-if the principal had made the purchase directly. 24-Sec. 6. Section 77-2704.36, Revised Statutes Cumulative Supplement,25-2024, is amended to read: 26-77-2704.36 (1) Sales and use tax shall not be imposed on the gross27-receipts from the sale, lease, or rental of: 28-(a) Depreciable agricultural machinery and equipment purchased,29-leased, or rented on or after January 1, 1993, for use in commercial30-agriculture; or 31-LB650-2025-LB650-2025--19--(b) Baling Net wrap, baling wire , and twine purchased for use in1-commercial agriculture. 2-(2) For purposes of this section: 3-(a)(i) Agricultural machinery and equipment means tangible personal4-property that is used directly in (A) cultivating or harvesting a crop,5-(B) raising or caring for animal life, (C) protecting the health and6-welfare of animal life, including fans, curtains, and climate control7-equipment within livestock buildings, or (D) collecting or processing an8-agricultural product on a farm or ranch, regardless of the degree of9-attachment to any real property; and 10-(ii) Agricultural machinery and equipment includes, but is not11-limited to, header trailers, head haulers, header transports, and seed12-tender trailers and excludes any current tractor model as defined in13-section 2-2701.01 not permitted for sale in Nebraska pursuant to sections14-2-2701 to 2-2711; and 15-(b) Baling wire means wire used in the baling of livestock feed or16-bedding. ; 17-(c) Net wrap means plastic wrap used in the baling of livestock feed18-or bedding; and 19-(d) Twine means a strong string of two or more strands twisted20-together used in the baling of livestock feed or bedding.21-Sec. 7. Section 77-2708, Revised Statutes Cumulative Supplement,22-2024, is amended to read: 23-77-2708 (1)(a) The sales and use taxes imposed by the Nebraska24-Revenue Act of 1967 shall be due and payable to the Tax Commissioner25-monthly on or before the twentieth day of the month next succeeding each26-monthly period unless otherwise provided pursuant to the Nebraska Revenue27-Act of 1967. 28-(b)(i) On or before the twentieth day of the month following each29-monthly period or such other period as the Tax Commissioner may require,30-a return for such period, along with all taxes due, shall be filed with31-LB650-2025-LB650-2025--20--the Tax Commissioner in such form and content as the Tax Commissioner may1-prescribe and containing such information as the Tax Commissioner deems2-necessary for the proper administration of the Nebraska Revenue Act of3-1967. The Tax Commissioner, if he or she deems it necessary in order to4-insure payment to or facilitate the collection by the state of the amount5-of sales or use taxes due, may require returns and payment of the amount6-of such taxes for periods other than monthly periods in the case of a7-particular seller, retailer, or purchaser, as the case may be. The Tax8-Commissioner shall by rule and regulation require reports and tax9-payments from sellers, retailers, or purchasers depending on their yearly10-tax liability. Except as required by the streamlined sales and use tax11-agreement, annual returns shall be required if such sellers', retailers',12-or purchasers' yearly tax liability is less than nine hundred dollars,13-quarterly returns shall be required if their yearly tax liability is nine14-hundred dollars or more and less than three thousand dollars, and monthly15-returns shall be required if their yearly tax liability is three thousand16-dollars or more. The Tax Commissioner shall have the discretion to allow17-an annual return for seasonal retailers, even when their yearly tax18-liability exceeds the amounts listed in this subdivision.19-The Tax Commissioner may adopt and promulgate rules and regulations20-to allow annual, semiannual, or quarterly returns for any retailer making21-monthly remittances or payments of sales and use taxes by electronic22-funds transfer or for any retailer remitting tax to the state pursuant to23-the streamlined sales and use tax agreement. Such rules and regulations24-may establish a method of determining the amount of the payment that will25-result in substantially all of the tax liability being paid each quarter.26-At least once each year, the difference between the amount paid and the27-amount due shall be reconciled. If the difference is more than ten28-percent of the amount paid, a penalty of fifty percent of the unpaid29-amount shall be imposed. 30-(ii) For purposes of the sales tax, a return shall be filed by every31-LB650-2025-LB650-2025--21--retailer liable for collection from a purchaser and payment to the state1-of the tax, except that a combined sales tax return may be filed for all2-licensed locations which are subject to common ownership. For purposes of3-this subdivision, common ownership means the same person or persons own4-eighty percent or more of each licensed location. For purposes of the use5-tax, a return shall be filed by every retailer engaged in business in6-this state and by every person who has purchased property, the storage,7-use, or other consumption of which is subject to the use tax, but who has8-not paid the use tax due to a retailer required to collect the tax.9-(iii) The Tax Commissioner may require that returns be signed by the10-person required to file the return or by his or her duly authorized agent11-but need not be verified by oath. 12-(iv) A taxpayer who keeps his or her regular books and records on a13-cash basis, an accrual basis, or any generally recognized accounting14-basis which correctly reflects the operation of the business may file the15-sales and use tax returns required by the Nebraska Revenue Act of 1967 on16-the same accounting basis that is used for the regular books and records,17-except that on credit, conditional, and installment sales, the retailer18-who keeps his or her books on an accrual basis may report such sales on19-the cash basis and pay the tax upon the collections made during each20-month. If a taxpayer transfers, sells, assigns, or otherwise disposes of21-an account receivable, he or she shall be deemed to have received the22-full balance of the consideration for the original sale and shall be23-liable for the remittance of the sales tax on the balance of the total24-sale price not previously reported, except that such transfer, sale,25-assignment, or other disposition of an account receivable by a retailer26-to a subsidiary shall not be deemed to require the retailer to pay the27-sales tax on the credit sale represented by the account transferred prior28-to the time the customer makes payment on such account. If the subsidiary29-does not obtain a Nebraska sales tax permit, the taxpayer shall obtain a30-surety bond in favor of the State of Nebraska to insure payment of the31-LB650-2025-LB650-2025--22--tax and any interest and penalty imposed thereon under this section in an1-amount not less than two times the amount of tax payable on outstanding2-accounts receivable held by the subsidiary as of the end of the prior3-calendar year. Failure to obtain either a sales tax permit or a surety4-bond in accordance with this section shall result in the payment on the5-next required filing date of all sales taxes not previously remitted.6-When the retailer has adopted one basis or the other of reporting credit,7-conditional, or installment sales and paying the tax thereon, he or she8-will not be permitted to change from that basis without first having9-notified the Tax Commissioner. 10-(c) Except as provided in the streamlined sales and use tax11-agreement, the taxpayer required to file the return shall deliver or mail12-any required return together with a remittance of the net amount of the13-tax due to the office of the Tax Commissioner on or before the required14-filing date. Failure to file the return, filing after the required filing15-date, failure to remit the net amount of the tax due, or remitting the16-net amount of the tax due after the required filing date shall be cause17-for a penalty, in addition to interest, of ten percent of the amount of18-tax not paid by the required filing date or twenty-five dollars,19-whichever is greater, unless the penalty is being collected under20-subdivision (1)(i), (1)(j)(i), or (1)(k)(i) of section 77-2703 by a21-county treasurer or the Department of Motor Vehicles, in which case the22-penalty shall be five dollars. 23-(d) The taxpayer shall deduct and withhold, from the taxes otherwise24-due from him or her on his or her tax return, two and one-half three25-percent of the first three five thousand dollars remitted each month to26-reimburse himself or herself for the cost of collecting the tax.27-Taxpayers filing a combined return as allowed by subdivision (1)(b)(ii)28-of this subsection shall compute such collection fees on the basis of the29-receipts and liability of each licensed location. 30-(e) A retailer that makes sales into Nebraska using a multivendor31-LB650-2025-LB650-2025--23--marketplace platform is relieved of its obligation to collect and remit1-sales taxes to Nebraska with regard to any sales taxes collected and2-remitted by the multivendor marketplace platform. Such a retailer must3-include all sales into Nebraska in its gross receipts in its return, but4-may claim credit for any sales taxes collected and remitted by the5-multivendor marketplace platform with respect to such retailer's sales.6-Such retailer is liable for the sales tax due on sales into Nebraska as7-provided in section 77-2704.35. 8-(f) A multivendor marketplace platform is relieved of its obligation9-to collect and remit the correct amount of state and local sales taxes to10-Nebraska to the extent that the multivendor marketplace platform can11-establish that the error was due to insufficient or incorrect information12-given to the multivendor marketplace platform by the seller and relied on13-by the multivendor marketplace platform. This subdivision shall not apply14-if the multivendor marketplace platform and the seller are related15-persons under either section 267(b) or (c) or section 707(b) of the16-Internal Revenue Code of 1986 or if the seller is also the multivendor17-marketplace platform operator. 18-(2)(a) If the Tax Commissioner determines that any sales or use tax19-amount, penalty, or interest has been paid more than once, has been20-erroneously or illegally collected or computed, or has been paid and the21-purchaser qualifies for a refund under section 77-2708.01, the Tax22-Commissioner shall set forth that fact in his or her records and the23-excess amount collected or paid may be credited on any sales, use, or24-income tax amounts then due and payable from the person under the25-Nebraska Revenue Act of 1967. Any balance may be refunded to the person26-by whom it was paid or his or her successors, administrators, or27-executors. 28-(b) No refund shall be allowed unless a claim therefor is filed with29-the Tax Commissioner by the person who made the overpayment or his or her30-attorney, executor, or administrator within three years from the required31-LB650-2025-LB650-2025--24--filing date following the close of the period for which the overpayment1-was made, within six months after any determination becomes final under2-section 77-2709, or within six months from the date of overpayment with3-respect to such determinations, whichever of these three periods expires4-later, unless the credit relates to a period for which a waiver has been5-given. Failure to file a claim within the time prescribed in this6-subsection shall constitute a waiver of any demand against the state on7-account of overpayment. 8-(c) Every claim shall be in writing on forms prescribed by the Tax9-Commissioner and shall state the specific amount and grounds upon which10-the claim is founded. No refund shall be made in any amount less than two11-dollars. 12-(d) The Tax Commissioner shall allow or disallow a claim within one13-hundred eighty days after it has been filed. A request for a hearing14-shall constitute a waiver of the one-hundred-eighty-day period. The15-claimant and the Tax Commissioner may also agree to extend the one-16-hundred-eighty-day period. If a hearing has not been requested and the17-Tax Commissioner has neither allowed nor disallowed a claim within either18-the one hundred eighty days or the period agreed to by the claimant and19-the Tax Commissioner, the claim shall be deemed to have been allowed.20-(e) Within thirty days after disallowing any claim in whole or in21-part, the Tax Commissioner shall serve notice of his or her action on the22-claimant in the manner prescribed for service of notice of a deficiency23-determination. 24-(f) Within thirty days after the mailing of the notice of the Tax25-Commissioner's action upon a claim filed pursuant to the Nebraska Revenue26-Act of 1967, the action of the Tax Commissioner shall be final unless the27-taxpayer seeks review of the Tax Commissioner's determination as provided28-in section 77-27,127. 29-(g) Upon the allowance of a credit or refund of any sum erroneously30-or illegally assessed or collected, of any penalty collected without31-LB650-2025-LB650-2025--25--authority, or of any sum which was excessive or in any manner wrongfully1-collected, interest shall be allowed and paid on the amount of such2-credit or refund at the rate specified in section 45-104.02, as such rate3-may from time to time be adjusted, from the date such sum was paid or4-from the date the return was required to be filed, whichever date is5-later, to the date of the allowance of the refund or, in the case of a6-credit, to the due date of the amount against which the credit is7-allowed, but in the case of a voluntary and unrequested payment in excess8-of actual tax liability or a refund under section 77-2708.01, no interest9-shall be allowed when such excess is refunded or credited.10-(h) No suit or proceeding shall be maintained in any court for the11-recovery of any amount alleged to have been erroneously or illegally12-determined or collected unless a claim for refund or credit has been duly13-filed. 14-(i) The Tax Commissioner may recover any refund or part thereof15-which is erroneously made and any credit or part thereof which is16-erroneously allowed by issuing a deficiency determination within one year17-from the date of refund or credit or within the period otherwise allowed18-for issuing a deficiency determination, whichever expires later.19-(j)(i) Credit shall be allowed to the retailer, contractor, or20-repairperson for sales or use taxes paid pursuant to the Nebraska Revenue21-Act of 1967 on any deduction taken that is attributed to bad debts not22-including interest. Bad debt has the same meaning as in 26 U.S.C. 166, as23-such section existed on January 1, 2003. However, the amount calculated24-pursuant to 26 U.S.C. 166 shall be adjusted to exclude: Financing charges25-or interest; sales or use taxes charged on the purchase price;26-uncollectible amounts on property that remains in the possession of the27-seller until the full purchase price is paid; and expenses incurred in28-attempting to collect any debt and repossessed property.29-(ii) Bad debts may be deducted on the return for the period during30-which the bad debt is written off as uncollectible in the claimant's31-LB650-2025-LB650-2025--26--books and records and is eligible to be deducted for federal income tax1-purposes. A claimant who is not required to file federal income tax2-returns may deduct a bad debt on a return filed for the period in which3-the bad debt is written off as uncollectible in the claimant's books and4-records and would be eligible for a bad debt deduction for federal income5-tax purposes if the claimant was required to file a federal income tax6-return. 7-(iii) If a deduction is taken for a bad debt and the debt is8-subsequently collected in whole or in part, the tax on the amount so9-collected must be paid and reported on the return filed for the period in10-which the collection is made. 11-(iv) When the amount of bad debt exceeds the amount of taxable sales12-for the period during which the bad debt is written off, a refund claim13-may be filed within the otherwise applicable statute of limitations for14-refund claims. The statute of limitations shall be measured from the due15-date of the return on which the bad debt could first be claimed.16-(v) If filing responsibilities have been assumed by a certified17-service provider, the service provider may claim, on behalf of the18-retailer, any bad debt allowance provided by this section. The certified19-service provider shall credit or refund the full amount of any bad debt20-allowance or refund received to the retailer. 21-(vi) For purposes of reporting a payment received on a previously22-claimed bad debt, any payments made on a debt or account are applied23-first proportionally to the taxable price of the property or service and24-the sales tax thereon, and secondly to interest, service charges, and any25-other charges. 26-(vii) In situations in which the books and records of the party27-claiming the bad debt allowance support an allocation of the bad debts28-among the member states in the streamlined sales and use tax agreement,29-the state shall permit the allocation. 30-(3) Beginning July 1, 2020, if a refund claim under this section31-LB650-2025-LB650-2025--27--involves a refund of a tax imposed under the Local Option Revenue Act or1-section 13-319, 13-2813, or 77-6403 and the amount of such tax to be2-refunded is at least five thousand dollars, the Tax Commissioner shall3-notify the affected city, village, county, or municipal county of such4-claim within twenty days after receiving the claim. If the Tax5-Commissioner allows the claim and the refund of such tax is at least five6-thousand dollars, the Tax Commissioner shall notify the affected city,7-village, county, or municipal county of such refund and shall give the8-city, village, county, or municipal county the option of having such9-refund deducted from its tax proceeds in one lump sum or in twelve equal10-monthly installments. The city, village, county, or municipal county11-shall make its selection and shall certify the selection to the Tax12-Commissioner within twenty days after receiving notice of the refund. The13-Tax Commissioner shall then deduct such refund from the applicable tax14-proceeds in accordance with the selection when he or she deducts refunds15-pursuant to section 13-324, 13-2814, or 77-6403 or subsection (1) of16-section 77-27,144, whichever is applicable. This subsection shall not17-apply to any refund that is subject to subdivision (2)(a) or (2)(b)(ii)18-or subsection (3) or (4) of section 77-27,144. 19-Sec. 8. Section 77-2715.07, Revised Statutes Cumulative Supplement,20-2024, is amended to read: 21-77-2715.07 (1) There shall be allowed to qualified resident22-individuals as a nonrefundable credit against the income tax imposed by23-the Nebraska Revenue Act of 1967: 24-(a) A credit equal to the federal credit allowed under section 22 of25-the Internal Revenue Code; and 26-(b) A credit for taxes paid to another state as provided in section27-77-2730. 28-(2) There shall be allowed to qualified resident individuals against29-the income tax imposed by the Nebraska Revenue Act of 1967:30-(a) For returns filed reporting federal adjusted gross incomes of31-LB650-2025-LB650-2025--28--greater than twenty-nine thousand dollars, a nonrefundable credit equal1-to twenty-five percent of the federal credit allowed under section 21 of2-the Internal Revenue Code of 1986, as amended, except that for taxable3-years beginning or deemed to begin on or after January 1, 2015, such4-nonrefundable credit shall be allowed only if the individual would have5-received the federal credit allowed under section 21 of the code after6-adding back in any carryforward of a net operating loss that was deducted7-pursuant to such section in determining eligibility for the federal8-credit; 9-(b) For returns filed reporting federal adjusted gross income of10-twenty-nine thousand dollars or less, a refundable credit equal to a11-percentage of the federal credit allowable under section 21 of the12-Internal Revenue Code of 1986, as amended, whether or not the federal13-credit was limited by the federal tax liability. The percentage of the14-federal credit shall be one hundred percent for incomes not greater than15-twenty-two thousand dollars, and the percentage shall be reduced by ten16-percent for each one thousand dollars, or fraction thereof, by which the17-reported federal adjusted gross income exceeds twenty-two thousand18-dollars, except that for taxable years beginning or deemed to begin on or19-after January 1, 2015, such refundable credit shall be allowed only if20-the individual would have received the federal credit allowed under21-section 21 of the code after adding back in any carryforward of a net22-operating loss that was deducted pursuant to such section in determining23-eligibility for the federal credit; 24-(c) A refundable credit as provided in section 77-5209.01 for25-individuals who qualify for an income tax credit as a qualified beginning26-farmer or livestock producer under the Beginning Farmer Tax Credit Act27-for all taxable years beginning or deemed to begin on or after January 1,28-2006, under the Internal Revenue Code of 1986, as amended;29-(d) A refundable credit for individuals who qualify for an income30-tax credit under the Angel Investment Tax Credit Act, the Nebraska31-LB650-2025-LB650-2025--29--Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research1-and Development Act, the Reverse Osmosis System Tax Credit Act, or the2-Volunteer Emergency Responders Incentive Act; and 3-(e) A refundable credit equal to ten percent of the federal credit4-allowed under section 32 of the Internal Revenue Code of 1986, as5-amended, except that for taxable years beginning or deemed to begin on or6-after January 1, 2015, such refundable credit shall be allowed only if7-the individual would have received the federal credit allowed under8-section 32 of the code after adding back in any carryforward of a net9-operating loss that was deducted pursuant to such section in determining10-eligibility for the federal credit. 11-(3) There shall be allowed to all individuals as a nonrefundable12-credit against the income tax imposed by the Nebraska Revenue Act of13-1967: 14-(a) A credit for personal exemptions allowed under section15-77-2716.01; 16-(b) A credit for contributions to programs or projects certified for17-tax credit status as provided in the Creating High Impact Economic18-Futures Act. Each partner, each shareholder of an electing subchapter S19-corporation, each beneficiary of an estate or trust, or each member of a20-limited liability company shall report his or her share of the credit in21-the same manner and proportion as he or she reports the partnership,22-subchapter S corporation, estate, trust, or limited liability company23-income; 24-(c) A credit for investment in a biodiesel facility as provided in25-section 77-27,236; 26-(d) A credit as provided in the New Markets Job Growth Investment27-Act; 28-(e) A credit as provided in the Nebraska Job Creation and Mainstreet29-Revitalization Act; 30-(f) A credit to employers as provided in sections 77-27,238 and31-LB650-2025-LB650-2025--30--77-27,240; 1-(g) A credit as provided in the Affordable Housing Tax Credit Act;2-(h) A credit to grocery store retailers, restaurants, and3-agricultural producers as provided in section 77-27,241;4-(i) A credit as provided in the Sustainable Aviation Fuel Tax Credit5-Act; 6-(i) (j) A credit as provided in the Nebraska Shortline Rail7-Modernization Act; 8-(j) (k) A credit as provided in the Nebraska Pregnancy Help Act; and9-(k) (l) A credit as provided in the Caregiver Tax Credit Act.10-(4) There shall be allowed as a credit against the income tax11-imposed by the Nebraska Revenue Act of 1967: 12-(a) A credit to all resident estates and trusts for taxes paid to13-another state as provided in section 77-2730; 14-(b) A credit to all estates and trusts for contributions to programs15-or projects certified for tax credit status as provided in the Creating16-High Impact Economic Futures Act; and 17-(c) A refundable credit for individuals who qualify for an income18-tax credit as an owner of agricultural assets under the Beginning Farmer19-Tax Credit Act for all taxable years beginning or deemed to begin on or20-after January 1, 2009, under the Internal Revenue Code of 1986, as21-amended. The credit allowed for each partner, shareholder, member, or22-beneficiary of a partnership, corporation, limited liability company, or23-estate or trust qualifying for an income tax credit as an owner of24-agricultural assets under the Beginning Farmer Tax Credit Act shall be25-equal to the partner's, shareholder's, member's, or beneficiary's portion26-of the amount of tax credit distributed pursuant to subsection (6) of27-section 77-5211. 28-(5)(a) For all taxable years beginning on or after January 1, 2007,29-and before January 1, 2009, under the Internal Revenue Code of 1986, as30-amended, there shall be allowed to each partner, shareholder, member, or31-LB650-2025-LB650-2025--31--beneficiary of a partnership, subchapter S corporation, limited liability1-company, or estate or trust a nonrefundable credit against the income tax2-imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the3-partner's, shareholder's, member's, or beneficiary's portion of the4-amount of franchise tax paid to the state under sections 77-3801 to5-77-3807 by a financial institution. 6-(b) For all taxable years beginning on or after January 1, 2009,7-under the Internal Revenue Code of 1986, as amended, there shall be8-allowed to each partner, shareholder, member, or beneficiary of a9-partnership, subchapter S corporation, limited liability company, or10-estate or trust a nonrefundable credit against the income tax imposed by11-the Nebraska Revenue Act of 1967 equal to the partner's, shareholder's,12-member's, or beneficiary's portion of the amount of franchise tax paid to13-the state under sections 77-3801 to 77-3807 by a financial institution.14-(c) Each partner, shareholder, member, or beneficiary shall report15-his or her share of the credit in the same manner and proportion as he or16-she reports the partnership, subchapter S corporation, limited liability17-company, or estate or trust income. If any partner, shareholder, member,18-or beneficiary cannot fully utilize the credit for that year, the credit19-may not be carried forward or back. 20-(6) There shall be allowed to all individuals nonrefundable credits21-against the income tax imposed by the Nebraska Revenue Act of 1967 as22-provided in section 77-3604 and refundable credits against the income tax23-imposed by the Nebraska Revenue Act of 1967 as provided in section24-77-3605. 25-(7)(a) For taxable years beginning or deemed to begin on or after26-January 1, 2020, and before January 1, 2026, under the Internal Revenue27-Code of 1986, as amended, a nonrefundable credit against the income tax28-imposed by the Nebraska Revenue Act of 1967 in the amount of five29-thousand dollars shall be allowed to any individual who purchases a30-residence during the taxable year if such residence:31-LB650-2025-LB650-2025--32--(i) Is located within an area that has been declared an extremely1-blighted area under section 18-2101.02; 2-(ii) Is the individual's primary residence; and3-(iii) Was not purchased from a family member of the individual or a4-family member of the individual's spouse. 5-(b) The credit provided in this subsection shall be claimed for the6-taxable year in which the residence is purchased. If the individual7-cannot fully utilize the credit for such year, the credit may be carried8-forward to subsequent taxable years until fully utilized.9-(c) No more than one credit may be claimed under this subsection10-with respect to a single residence. 11-(d) The credit provided in this subsection shall be subject to12-recapture by the Department of Revenue if the individual claiming the13-credit sells or otherwise transfers the residence or quits using the14-residence as his or her primary residence within five years after the end15-of the taxable year in which the credit was claimed.16-(e) For purposes of this subsection, family member means an17-individual's spouse, child, parent, brother, sister, grandchild, or18-grandparent, whether by blood, marriage, or adoption.19-(8) There shall be allowed to all individuals refundable credits20-against the income tax imposed by the Nebraska Revenue Act of 1967 as21-provided in the Cast and Crew Nebraska Act, the Nebraska Biodiesel Tax22-Credit Act, the Nebraska Higher Blend Tax Credit Act, the Nebraska23-Property Tax Incentive Act, the Relocation Incentive Act, and the24-Renewable Chemical Production Tax Credit Act. 25-(9)(a) For taxable years beginning or deemed to begin on or after26-January 1, 2022, under the Internal Revenue Code of 1986, as amended, a27-refundable credit against the income tax imposed by the Nebraska Revenue28-Act of 1967 shall be allowed to the parent of a stillborn child if:29-(i) A fetal death certificate is filed pursuant to subsection (1) of30-section 71-606 for such child; 31-LB650-2025-LB650-2025--33--(ii) Such child had advanced to at least the twentieth week of1-gestation; and 2-(iii) Such child would have been a dependent of the individual3-claiming the credit. 4-(b) The amount of the credit shall be two thousand dollars.5-(c) The credit shall be allowed for the taxable year in which the6-stillbirth occurred. 7-(10) There shall be allowed to all individuals refundable credits8-against the income tax imposed by the Nebraska Revenue Act of 1967 as9-provided in section 77-7203 and nonrefundable credits against the income10-tax imposed by the Nebraska Revenue Act of 1967 as provided in section11-77-7204. 12-(11) There shall be allowed to all individuals refundable credits13-against the income tax imposed by the Nebraska Revenue Act of 1967 as14-provided in section 77-3157 and nonrefundable credits against the income15-tax imposed by the Nebraska Revenue Act of 1967 as provided in sections16-77-3156, 77-3158, and 77-3159. 17-Sec. 9. Section 77-2716, Revised Statutes Cumulative Supplement,18-2024, is amended to read: 19-77-2716 (1) The following adjustments to federal adjusted gross20-income or, for corporations and fiduciaries, federal taxable income shall21-be made for interest or dividends received: 22-(a)(i) There shall be subtracted interest or dividends received by23-the owner of obligations of the United States and its territories and24-possessions or of any authority, commission, or instrumentality of the25-United States to the extent includable in gross income for federal income26-tax purposes but exempt from state income taxes under the laws of the27-United States; and 28-(ii) There shall be subtracted interest received by the owner of29-obligations of the State of Nebraska or its political subdivisions or30-authorities which are Build America Bonds to the extent includable in31-LB650-2025-LB650-2025--34--gross income for federal income tax purposes; 1-(b) There shall be subtracted that portion of the total dividends2-and other income received from a regulated investment company which is3-attributable to obligations described in subdivision (a) of this4-subsection as reported to the recipient by the regulated investment5-company; 6-(c) There shall be added interest or dividends received by the owner7-of obligations of the District of Columbia, other states of the United8-States, or their political subdivisions, authorities, commissions, or9-instrumentalities to the extent excluded in the computation of gross10-income for federal income tax purposes except that such interest or11-dividends shall not be added if received by a corporation which is a12-regulated investment company; 13-(d) There shall be added that portion of the total dividends and14-other income received from a regulated investment company which is15-attributable to obligations described in subdivision (c) of this16-subsection and excluded for federal income tax purposes as reported to17-the recipient by the regulated investment company; and18-(e)(i) Any amount subtracted under this subsection shall be reduced19-by any interest on indebtedness incurred to carry the obligations or20-securities described in this subsection or the investment in the21-regulated investment company and by any expenses incurred in the22-production of interest or dividend income described in this subsection to23-the extent that such expenses, including amortizable bond premiums, are24-deductible in determining federal taxable income. 25-(ii) Any amount added under this subsection shall be reduced by any26-expenses incurred in the production of such income to the extent27-disallowed in the computation of federal taxable income.28-(2) There shall be allowed a net operating loss derived from or29-connected with Nebraska sources computed under rules and regulations30-adopted and promulgated by the Tax Commissioner consistent, to the extent31-LB650-2025-LB650-2025--35--possible under the Nebraska Revenue Act of 1967, with the laws of the1-United States. For a resident individual, estate, or trust, the net2-operating loss computed on the federal income tax return shall be3-adjusted by the modifications contained in this section. For a4-nonresident individual, estate, or trust or for a partial-year resident5-individual, the net operating loss computed on the federal return shall6-be adjusted by the modifications contained in this section and any7-carryovers or carrybacks shall be limited to the portion of the loss8-derived from or connected with Nebraska sources. 9-(3) There shall be subtracted from federal adjusted gross income for10-all taxable years beginning on or after January 1, 1987, the amount of11-any state income tax refund to the extent such refund was deducted under12-the Internal Revenue Code, was not allowed in the computation of the tax13-due under the Nebraska Revenue Act of 1967, and is included in federal14-adjusted gross income. 15-(4) Federal adjusted gross income, or, for a fiduciary, federal16-taxable income shall be modified to exclude the portion of the income or17-loss received from a small business corporation with an election in18-effect under subchapter S of the Internal Revenue Code or from a limited19-liability company organized pursuant to the Nebraska Uniform Limited20-Liability Company Act that is not derived from or connected with Nebraska21-sources as determined in section 77-2734.01. 22-(5) There shall be subtracted from federal adjusted gross income or,23-for corporations and fiduciaries, federal taxable income dividends24-received or deemed to be received from corporations which are not subject25-to the Internal Revenue Code. 26-(6) There shall be subtracted from federal taxable income a portion27-of the income earned by a corporation subject to the Internal Revenue28-Code of 1986 that is actually taxed by a foreign country or one of its29-political subdivisions at a rate in excess of the maximum federal tax30-rate for corporations. The taxpayer may make the computation for each31-LB650-2025-LB650-2025--36--foreign country or for groups of foreign countries. The portion of the1-taxes that may be deducted shall be computed in the following manner:2-(a) The amount of federal taxable income from operations within a3-foreign taxing jurisdiction shall be reduced by the amount of taxes4-actually paid to the foreign jurisdiction that are not deductible solely5-because the foreign tax credit was elected on the federal income tax6-return; 7-(b) The amount of after-tax income shall be divided by one minus the8-maximum tax rate for corporations in the Internal Revenue Code; and9-(c) The result of the calculation in subdivision (b) of this10-subsection shall be subtracted from the amount of federal taxable income11-used in subdivision (a) of this subsection. The result of such12-calculation, if greater than zero, shall be subtracted from federal13-taxable income. 14-(7) Federal adjusted gross income shall be modified to exclude any15-amount repaid by the taxpayer for which a reduction in federal tax is16-allowed under section 1341(a)(5) of the Internal Revenue Code.17-(8)(a) Federal adjusted gross income or, for corporations and18-fiduciaries, federal taxable income shall be reduced, to the extent19-included, by income from interest, earnings, and state contributions20-received from the Nebraska educational savings plan trust created in21-sections 85-1801 to 85-1817 and any account established under the22-achieving a better life experience program as provided in sections23-77-1401 to 77-1409. 24-(b) Federal adjusted gross income or, for corporations and25-fiduciaries, federal taxable income shall be reduced by any contributions26-as a participant in the Nebraska educational savings plan trust or27-contributions to an account established under the achieving a better life28-experience program made for the benefit of a beneficiary as provided in29-sections 77-1401 to 77-1409, to the extent not deducted for federal30-income tax purposes, but not to exceed five thousand dollars per married31-LB650-2025-LB650-2025--37--filing separate return or ten thousand dollars for any other return. With1-respect to a qualified rollover within the meaning of section 529 of the2-Internal Revenue Code from another state's plan, any interest, earnings,3-and state contributions received from the other state's educational4-savings plan which is qualified under section 529 of the code shall5-qualify for the reduction provided in this subdivision. For contributions6-by a custodian of a custodial account including rollovers from another7-custodial account, the reduction shall only apply to funds added to the8-custodial account after January 1, 2014. 9-(c) For taxable years beginning or deemed to begin on or after10-January 1, 2021, under the Internal Revenue Code of 1986, as amended,11-federal adjusted gross income shall be reduced, to the extent included in12-the adjusted gross income of an individual, by the amount of any13-contribution made by the individual's employer into an account under the14-Nebraska educational savings plan trust owned by the individual, not to15-exceed five thousand dollars per married filing separate return or ten16-thousand dollars for any other return. 17-(d) Federal adjusted gross income or, for corporations and18-fiduciaries, federal taxable income shall be increased by:19-(i) The amount resulting from the cancellation of a participation20-agreement refunded to the taxpayer as a participant in the Nebraska21-educational savings plan trust to the extent previously deducted under22-subdivision (8)(b) of this section; and 23-(ii) The amount of any withdrawals by the owner of an account24-established under the achieving a better life experience program as25-provided in sections 77-1401 to 77-1409 for nonqualified expenses to the26-extent previously deducted under subdivision (8)(b) of this section.27-(9)(a) For income tax returns filed after September 10, 2001, for28-taxable years beginning or deemed to begin before January 1, 2006, under29-the Internal Revenue Code of 1986, as amended, federal adjusted gross30-income or, for corporations and fiduciaries, federal taxable income shall31-LB650-2025-LB650-2025--38--be increased by eighty-five percent of any amount of any federal bonus1-depreciation received under the federal Job Creation and Worker2-Assistance Act of 2002 or the federal Jobs and Growth Tax Act of 2003,3-under section 168(k) or section 1400L of the Internal Revenue Code of4-1986, as amended, for assets placed in service after September 10, 2001,5-and before December 31, 2005. 6-(b) For a partnership, limited liability company, cooperative,7-including any cooperative exempt from income taxes under section 521 of8-the Internal Revenue Code of 1986, as amended, limited cooperative9-association, subchapter S corporation, or joint venture, the increase10-shall be distributed to the partners, members, shareholders, patrons, or11-beneficiaries in the same manner as income is distributed for use against12-their income tax liabilities. 13-(c) For a corporation with a unitary business having activity both14-inside and outside the state, the increase shall be apportioned to15-Nebraska in the same manner as income is apportioned to the state by16-section 77-2734.05. 17-(d) The amount of bonus depreciation added to federal adjusted gross18-income or, for corporations and fiduciaries, federal taxable income by19-this subsection shall be subtracted in a later taxable year. Twenty20-percent of the total amount of bonus depreciation added back by this21-subsection for tax years beginning or deemed to begin before January 1,22-2003, under the Internal Revenue Code of 1986, as amended, may be23-subtracted in the first taxable year beginning or deemed to begin on or24-after January 1, 2005, under the Internal Revenue Code of 1986, as25-amended, and twenty percent in each of the next four following taxable26-years. Twenty percent of the total amount of bonus depreciation added27-back by this subsection for tax years beginning or deemed to begin on or28-after January 1, 2003, may be subtracted in the first taxable year29-beginning or deemed to begin on or after January 1, 2006, under the30-Internal Revenue Code of 1986, as amended, and twenty percent in each of31-LB650-2025-LB650-2025--39--the next four following taxable years. 1-(10) For taxable years beginning or deemed to begin on or after2-January 1, 2003, and before January 1, 2006, under the Internal Revenue3-Code of 1986, as amended, federal adjusted gross income or, for4-corporations and fiduciaries, federal taxable income shall be increased5-by the amount of any capital investment that is expensed under section6-179 of the Internal Revenue Code of 1986, as amended, that is in excess7-of twenty-five thousand dollars that is allowed under the federal Jobs8-and Growth Tax Act of 2003. Twenty percent of the total amount of9-expensing added back by this subsection for tax years beginning or deemed10-to begin on or after January 1, 2003, may be subtracted in the first11-taxable year beginning or deemed to begin on or after January 1, 2006,12-under the Internal Revenue Code of 1986, as amended, and twenty percent13-in each of the next four following tax years. 14-(11)(a) For taxable years beginning or deemed to begin before15-January 1, 2018, under the Internal Revenue Code of 1986, as amended,16-federal adjusted gross income shall be reduced by contributions, up to17-two thousand dollars per married filing jointly return or one thousand18-dollars for any other return, and any investment earnings made as a19-participant in the Nebraska long-term care savings plan under the Long-20-Term Care Savings Plan Act, to the extent not deducted for federal income21-tax purposes. 22-(b) For taxable years beginning or deemed to begin before January 1,23-2018, under the Internal Revenue Code of 1986, as amended, federal24-adjusted gross income shall be increased by the withdrawals made as a25-participant in the Nebraska long-term care savings plan under the act by26-a person who is not a qualified individual or for any reason other than27-transfer of funds to a spouse, long-term care expenses, long-term care28-insurance premiums, or death of the participant, including withdrawals29-made by reason of cancellation of the participation agreement, to the30-extent previously deducted as a contribution or as investment earnings.31-LB650-2025-LB650-2025--40--(12) There shall be added to federal adjusted gross income for1-individuals, estates, and trusts any amount taken as a credit for2-franchise tax paid by a financial institution under sections 77-3801 to3-77-3807 as allowed by subsection (5) of section 77-2715.07.4-(13)(a) For taxable years beginning or deemed to begin on or after5-January 1, 2015, and before January 1, 2024, under the Internal Revenue6-Code of 1986, as amended, federal adjusted gross income shall be reduced7-by the amount received as benefits under the federal Social Security Act8-which are included in the federal adjusted gross income if:9-(i) For taxpayers filing a married filing joint return, federal10-adjusted gross income is fifty-eight thousand dollars or less; or11-(ii) For taxpayers filing any other return, federal adjusted gross12-income is forty-three thousand dollars or less. 13-(b) For taxable years beginning or deemed to begin on or after14-January 1, 2020, and before January 1, 2024, under the Internal Revenue15-Code of 1986, as amended, the Tax Commissioner shall adjust the dollar16-amounts provided in subdivisions (13)(a)(i) and (ii) of this section by17-the same percentage used to adjust individual income tax brackets under18-subsection (3) of section 77-2715.03. 19-(c) For taxable years beginning or deemed to begin on or after20-January 1, 2021, and before January 1, 2024, under the Internal Revenue21-Code of 1986, as amended, a taxpayer may claim the reduction to federal22-adjusted gross income allowed under this subsection or the reduction to23-federal adjusted gross income allowed under subsection (14) of this24-section, whichever provides the greater reduction.25-(14)(a) For taxable years beginning or deemed to begin on or after26-January 1, 2021, under the Internal Revenue Code of 1986, as amended,27-federal adjusted gross income shall be reduced by a percentage of the28-social security benefits that are received and included in federal29-adjusted gross income. The pertinent percentage shall be:30-(i) Five percent for taxable years beginning or deemed to begin on31-LB650-2025-LB650-2025--41--or after January 1, 2021, and before January 1, 2022, under the Internal1-Revenue Code of 1986, as amended; 2-(ii) Forty percent for taxable years beginning or deemed to begin on3-or after January 1, 2022, and before January 1, 2023, under the Internal4-Revenue Code of 1986, as amended; 5-(iii) Sixty percent for taxable years beginning or deemed to begin6-on or after January 1, 2023, and before January 1, 2024, under the7-Internal Revenue Code of 1986, as amended; and 8-(iv) One hundred percent for taxable years beginning or deemed to9-begin on or after January 1, 2024, under the Internal Revenue Code of10-1986, as amended. 11-(b) For purposes of this subsection, social security benefits means12-benefits received under the federal Social Security Act.13-(c) For taxable years beginning or deemed to begin on or after14-January 1, 2021, and before January 1, 2024, under the Internal Revenue15-Code of 1986, as amended, a taxpayer may claim the reduction to federal16-adjusted gross income allowed under this subsection or the reduction to17-federal adjusted gross income allowed under subsection (13) of this18-section, whichever provides the greater reduction.19-(15)(a) For taxable years beginning or deemed to begin on or after20-January 1, 2015, and before January 1, 2022, under the Internal Revenue21-Code of 1986, as amended, an individual may make a one-time election22-within two calendar years after the date of his or her retirement from23-the military to exclude income received as a military retirement benefit24-by the individual to the extent included in federal adjusted gross income25-and as provided in this subdivision. The individual may elect to exclude26-forty percent of his or her military retirement benefit income for seven27-consecutive taxable years beginning with the year in which the election28-is made or may elect to exclude fifteen percent of his or her military29-retirement benefit income for all taxable years beginning with the year30-in which he or she turns sixty-seven years of age.31-LB650-2025-LB650-2025--42--(b) For taxable years beginning or deemed to begin on or after1-January 1, 2022, under the Internal Revenue Code of 1986, as amended, an2-individual may exclude one hundred percent of the military retirement3-benefit income received by such individual to the extent included in4-federal adjusted gross income. 5-(c) For purposes of this subsection, military retirement benefit6-means retirement benefits that are periodic payments attributable to7-service in the uniformed services of the United States for personal8-services performed by an individual prior to his or her retirement. The9-term includes retirement benefits described in this subdivision that are10-reported to the individual on either: 11-(i) An Internal Revenue Service Form 1099-R received from the United12-States Department of Defense; or 13-(ii) An Internal Revenue Service Form 1099-R received from the14-United States Office of Personnel Management. 15-(16) For taxable years beginning or deemed to begin on or after16-January 1, 2021, under the Internal Revenue Code of 1986, as amended,17-federal adjusted gross income shall be reduced by the amount received as18-a Segal AmeriCorps Education Award, to the extent such amount is included19-in federal adjusted gross income. 20-(17) For taxable years beginning or deemed to begin on or after21-January 1, 2022, under the Internal Revenue Code of 1986, as amended,22-federal adjusted gross income shall be reduced by the amount received by23-or on behalf of a firefighter for cancer benefits under the Firefighter24-Cancer Benefits Act to the extent included in federal adjusted gross25-income. 26-(18) There shall be subtracted from the federal adjusted gross27-income of individuals any amount received by the individual as student28-loan repayment assistance under the Teach in Nebraska Today Act, to the29-extent such amount is included in federal adjusted gross income.30-(19) For taxable years beginning or deemed to begin on or after31-LB650-2025-LB650-2025--43--January 1, 2023, under the Internal Revenue Code of 1986, as amended, a1-retired individual who was employed full time as a firefighter or2-certified law enforcement officer for at least twenty years and who is at3-least sixty years of age as of the end of the taxable year may reduce his4-or her federal adjusted gross income by the amount of health insurance5-premiums paid by such individual during the taxable year, to the extent6-such premiums were not already deducted in determining the individual's7-federal adjusted gross income. 8-(20) For taxable years beginning or deemed to begin on or after9-January 1, 2024, under the Internal Revenue Code of 1986, as amended, an10-individual may reduce his or her federal adjusted gross income by the11-amounts received as annuities under the Civil Service Retirement System12-which were earned for being employed by the federal government, to the13-extent such amounts are included in federal adjusted gross income.14-(21) For taxable years beginning or deemed to begin on or after15-January 1, 2025, under the Internal Revenue Code of 1986, as amended, an16-individual who is a member of the Nebraska National Guard may exclude one17-hundred percent of the income received from any of the following sources18-to the extent such income is included in the individual's federal19-adjusted gross income: 20-(a) Serving in a 32 U.S.C. duty status such as members attending21-drills, annual training, and military schools and members who are serving22-in a 32 U.S.C. active guard reserve or active duty for operational23-support duty status; 24-(b) Employment as a 32 U.S.C. federal dual-status technician with25-the Nebraska National Guard; or 26-(c) Serving in a state active duty status. 27-(22)(a) For taxable years beginning or deemed to begin on or after28-January 1, 2024, under the Internal Revenue Code of 1986, as amended, an29-individual may reduce his or her federal adjusted gross income by the30-amount of interest and principal balance of medical debt discharged under31-LB650-2025-LB650-2025--44--the Medical Debt Relief Act, to the extent included in such individual's1-federal adjusted gross income. 2-(b) For taxable years beginning or deemed to begin on or after3-January 1, 2024, under the Internal Revenue Code of 1986, as amended,4-federal adjusted gross income or, for corporations and fiduciaries,5-federal taxable income shall be reduced by the amount of contributions6-made to the Medical Debt Relief Fund, to the extent not deducted for7-federal income tax purposes. 8-(23) For taxable years beginning or deemed to begin on or after9-January 1, 2025, and before January 1, 2026, under the Internal Revenue10-Code of 1986, as amended, an individual who is a qualifying employee as11-defined in section 77-3108 may reduce his or her federal adjusted gross12-income by the amount allowed under section 77-3111.13-(24) For taxable years beginning or deemed to begin on or after14-January 1, 2026, under the Internal Revenue Code of 1986, as amended,15-federal adjusted gross income or, for corporations and fiduciaries,16-federal taxable income shall be reduced by the amounts allowed to be17-deducted pursuant to section 77-27,242. 18-(25) There shall be added to federal adjusted gross income or, for19-corporations and fiduciaries, federal taxable income for all taxable20-years beginning on or after January 1, 2025, the amount of any net21-capital loss that is derived from the sale or exchange of gold or silver22-bullion to the extent such loss is included in federal adjusted gross23-income except that such loss shall not be added if the loss is derived24-from the sale of bullion as a taxable distribution from any retirement25-plan account that holds gold or silver bullion. For the purposes of this26-subsection, bullion has the same meaning as in section 77-2704.66.27-(26) There shall be subtracted from federal adjusted gross income28-or, for corporations and fiduciaries, federal taxable income for all29-taxable years beginning on or after January 1, 2025, the amount of any30-net capital gain that is derived from the sale or exchange of gold or31-LB650-2025-LB650-2025--45--silver bullion to the extent such gain is included in federal adjusted1-gross income except that such gain shall not be subtracted if the gain is2-derived from the sale of bullion as a taxable distribution from any3-retirement plan account that holds gold or silver bullion. For the4-purposes of this subsection, bullion has the same meaning as in section5-77-2704.66. 6-Sec. 10. Section 77-2717, Revised Statutes Cumulative Supplement,7-2024, is amended to read: 8-77-2717 (1)(a)(i) For taxable years beginning or deemed to begin9-before January 1, 2014, the tax imposed on all resident estates and10-trusts shall be a percentage of the federal taxable income of such11-estates and trusts as modified in section 77-2716, plus a percentage of12-the federal alternative minimum tax and the federal tax on premature or13-lump-sum distributions from qualified retirement plans. The additional14-taxes shall be recomputed by (A) substituting Nebraska taxable income for15-federal taxable income, (B) calculating what the federal alternative16-minimum tax would be on Nebraska taxable income and adjusting such17-calculations for any items which are reflected differently in the18-determination of federal taxable income, and (C) applying Nebraska rates19-to the result. The federal credit for prior year minimum tax, after the20-recomputations required by the Nebraska Revenue Act of 1967, and the21-credits provided in the Nebraska Advantage Microenterprise Tax Credit Act22-and the Nebraska Advantage Research and Development Act shall be allowed23-as a reduction in the income tax due. A refundable income tax credit24-shall be allowed for all resident estates and trusts under the Angel25-Investment Tax Credit Act, the Nebraska Advantage Microenterprise Tax26-Credit Act, and the Nebraska Advantage Research and Development Act. A27-nonrefundable income tax credit shall be allowed for all resident estates28-and trusts as provided in the New Markets Job Growth Investment Act.29-(ii) For taxable years beginning or deemed to begin on or after30-January 1, 2014, the tax imposed on all resident estates and trusts shall31-LB650-2025-LB650-2025--46--be a percentage of the federal taxable income of such estates and trusts1-as modified in section 77-2716, plus a percentage of the federal tax on2-premature or lump-sum distributions from qualified retirement plans. The3-additional taxes shall be recomputed by substituting Nebraska taxable4-income for federal taxable income and applying Nebraska rates to the5-result. The credits provided in the Nebraska Advantage Microenterprise6-Tax Credit Act and the Nebraska Advantage Research and Development Act7-shall be allowed as a reduction in the income tax due. A refundable8-income tax credit shall be allowed for all resident estates and trusts9-under the Angel Investment Tax Credit Act, the Cast and Crew Nebraska10-Act, the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska11-Advantage Research and Development Act, the Nebraska Biodiesel Tax Credit12-Act, the Nebraska Higher Blend Tax Credit Act, the Nebraska Property Tax13-Incentive Act, the Relocation Incentive Act, and the Renewable Chemical14-Production Tax Credit Act. A nonrefundable income tax credit shall be15-allowed for all resident estates and trusts as provided in the Nebraska16-Job Creation and Mainstreet Revitalization Act, the New Markets Job17-Growth Investment Act, the School Readiness Tax Credit Act, the Child18-Care Tax Credit Act, the Affordable Housing Tax Credit Act, the19-Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline Rail20-Modernization Act, the Nebraska Pregnancy Help Act, the Individuals with21-Intellectual and Developmental Disabilities Support Act, and sections22-77-27,238, 77-27,240, and 77-27,241. 23-(b) The tax imposed on all nonresident estates and trusts shall be24-the portion of the tax imposed on resident estates and trusts which is25-attributable to the income derived from sources within this state. The26-tax which is attributable to income derived from sources within this27-state shall be determined by multiplying the liability to this state for28-a resident estate or trust with the same total income by a fraction, the29-numerator of which is the nonresident estate's or trust's Nebraska income30-as determined by sections 77-2724 and 77-2725 and the denominator of31-LB650-2025-LB650-2025--47--which is its total federal income after first adjusting each by the1-amounts provided in section 77-2716. The federal credit for prior year2-minimum tax, after the recomputations required by the Nebraska Revenue3-Act of 1967, reduced by the percentage of the total income which is4-attributable to income from sources outside this state, and the credits5-provided in the Nebraska Advantage Microenterprise Tax Credit Act and the6-Nebraska Advantage Research and Development Act shall be allowed as a7-reduction in the income tax due. A refundable income tax credit shall be8-allowed for all nonresident estates and trusts under the Angel Investment9-Tax Credit Act, the Cast and Crew Nebraska Act, the Nebraska Advantage10-Microenterprise Tax Credit Act, the Nebraska Advantage Research and11-Development Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska12-Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the13-Relocation Incentive Act, and the Renewable Chemical Production Tax14-Credit Act. A nonrefundable income tax credit shall be allowed for all15-nonresident estates and trusts as provided in the Nebraska Job Creation16-and Mainstreet Revitalization Act, the New Markets Job Growth Investment17-Act, the School Readiness Tax Credit Act, the Child Care Tax Credit Act,18-the Affordable Housing Tax Credit Act, the Sustainable Aviation Fuel Tax19-Credit Act, the Nebraska Shortline Rail Modernization Act, the Nebraska20-Pregnancy Help Act, the Individuals with Intellectual and Developmental21-Disabilities Support Act, and sections 77-27,238, 77-27,240, and22-77-27,241. 23-(2) In all instances wherein a fiduciary income tax return is24-required under the provisions of the Internal Revenue Code, a Nebraska25-fiduciary return shall be filed, except that a fiduciary return shall not26-be required to be filed regarding a simple trust if all of the trust's27-beneficiaries are residents of the State of Nebraska, all of the trust's28-income is derived from sources in this state, and the trust has no29-federal tax liability. The fiduciary shall be responsible for making the30-return for the estate or trust for which he or she acts, whether the31-LB650-2025-LB650-2025--48--income be taxable to the estate or trust or to the beneficiaries thereof.1-The fiduciary shall include in the return a statement of each2-beneficiary's distributive share of net income when such income is3-taxable to such beneficiaries. 4-(3) The beneficiaries of such estate or trust who are residents of5-this state shall include in their income their proportionate share of6-such estate's or trust's federal income and shall reduce their Nebraska7-tax liability by their proportionate share of the credits as provided in8-the Angel Investment Tax Credit Act, the Nebraska Advantage9-Microenterprise Tax Credit Act, the Nebraska Advantage Research and10-Development Act, the Nebraska Job Creation and Mainstreet Revitalization11-Act, the New Markets Job Growth Investment Act, the School Readiness Tax12-Credit Act, the Child Care Tax Credit Act, the Affordable Housing Tax13-Credit Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska Higher14-Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the15-Relocation Incentive Act, the Renewable Chemical Production Tax Credit16-Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska Shortline17-Rail Modernization Act, the Cast and Crew Nebraska Act, the Nebraska18-Pregnancy Help Act, the Individuals with Intellectual and Developmental19-Disabilities Support Act, and sections 77-27,238, 77-27,240, and20-77-27,241. There shall be allowed to a beneficiary a refundable income21-tax credit under the Beginning Farmer Tax Credit Act for all taxable22-years beginning or deemed to begin on or after January 1, 2001, under the23-Internal Revenue Code of 1986, as amended. 24-(4) If any beneficiary of such estate or trust is a nonresident25-during any part of the estate's or trust's taxable year, he or she shall26-file a Nebraska income tax return which shall include (a) in Nebraska27-adjusted gross income that portion of the estate's or trust's Nebraska28-income, as determined under sections 77-2724 and 77-2725, allocable to29-his or her interest in the estate or trust and (b) a reduction of the30-Nebraska tax liability by his or her proportionate share of the credits31-LB650-2025-LB650-2025--49--as provided in the Angel Investment Tax Credit Act, the Nebraska1-Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research2-and Development Act, the Nebraska Job Creation and Mainstreet3-Revitalization Act, the New Markets Job Growth Investment Act, the School4-Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable5-Housing Tax Credit Act, the Nebraska Biodiesel Tax Credit Act, the6-Nebraska Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive7-Act, the Relocation Incentive Act, the Renewable Chemical Production Tax8-Credit Act, the Sustainable Aviation Fuel Tax Credit Act, the Nebraska9-Shortline Rail Modernization Act, the Cast and Crew Nebraska Act, the10-Nebraska Pregnancy Help Act, the Individuals with Intellectual and11-Developmental Disabilities Support Act, and sections 77-27,238,12-77-27,240, and 77-27,241 and shall execute and forward to the fiduciary,13-on or before the original due date of the Nebraska fiduciary return, an14-agreement which states that he or she will file a Nebraska income tax15-return and pay income tax on all income derived from or connected with16-sources in this state, and such agreement shall be attached to the17-Nebraska fiduciary return for such taxable year. 18-(5) In the absence of the nonresident beneficiary's executed19-agreement being attached to the Nebraska fiduciary return, the estate or20-trust shall remit a portion of such beneficiary's income which was21-derived from or attributable to Nebraska sources with its Nebraska return22-for the taxable year. For taxable years beginning or deemed to begin23-before January 1, 2013, the amount of remittance, in such instance, shall24-be the highest individual income tax rate determined under section25-77-2715.02 multiplied by the nonresident beneficiary's share of the26-estate or trust income which was derived from or attributable to sources27-within this state. For taxable years beginning or deemed to begin on or28-after January 1, 2013, the amount of remittance, in such instance, shall29-be the highest individual income tax rate determined under section30-77-2715.03 multiplied by the nonresident beneficiary's share of the31-LB650-2025-LB650-2025--50--estate or trust income which was derived from or attributable to sources1-within this state. The amount remitted shall be allowed as a credit2-against the Nebraska income tax liability of the beneficiary.3-(6) The Tax Commissioner may allow a nonresident beneficiary to not4-file a Nebraska income tax return if the nonresident beneficiary's only5-source of Nebraska income was his or her share of the estate's or trust's6-income which was derived from or attributable to sources within this7-state, the nonresident did not file an agreement to file a Nebraska8-income tax return, and the estate or trust has remitted the amount9-required by subsection (5) of this section on behalf of such nonresident10-beneficiary. The amount remitted shall be retained in satisfaction of the11-Nebraska income tax liability of the nonresident beneficiary.12-(7) For purposes of this section, unless the context otherwise13-requires, simple trust shall mean any trust instrument which (a) requires14-that all income shall be distributed currently to the beneficiaries, (b)15-does not allow amounts to be paid, permanently set aside, or used in the16-tax year for charitable purposes, and (c) does not distribute amounts17-allocated in the corpus of the trust. Any trust which does not qualify as18-a simple trust shall be deemed a complex trust. 19-(8) For purposes of this section, any beneficiary of an estate or20-trust that is a grantor trust of a nonresident shall be disregarded and21-this section shall apply as though the nonresident grantor was the22-beneficiary. 23-Sec. 11. Section 77-2733, Revised Statutes Cumulative Supplement,24-2024, is amended to read: 25-77-2733 (1) The income of a nonresident individual derived from26-sources within this state shall be the sum of the following:27-(a) The net amount of items of income, gain, loss, and deduction28-entering into his or her federal taxable income which are derived from or29-connected with sources in this state including (i) his or her30-distributive share of partnership income and deductions determined under31-LB650-2025-LB650-2025--51--section 77-2729, (ii) his or her share of small business corporation or1-limited liability company income determined under section 77-2734.01, and2-(iii) his or her share of estate or trust income and deductions3-determined under section 77-2725; and 4-(b) The portion of the modifications described in section 77-27165-which relates to income derived from sources in this state, including any6-modifications attributable to him or her as a partner.7-(2) Items of income, gain, loss, and deduction derived from or8-connected with sources within this state are those items attributable to:9-(a) The ownership or disposition of any interest in real or tangible10-personal property in this state; 11-(b) A business, trade, profession, or occupation carried on in this12-state; and 13-(c) Any lottery prize awarded in a lottery game conducted pursuant14-to the State Lottery Act. 15-(3) Income from intangible personal property including annuities,16-dividends, interest, and gains from the disposition of intangible17-personal property shall constitute income derived from sources within18-this state only to the extent that such income is from property employed19-in a business, trade, profession, or occupation carried on in this state.20-(4) Deductions with respect to capital losses, net long-term capital21-gains, and net operating losses shall be based solely on income, gains,22-losses, and deductions derived from or connected with sources in this23-state, under rules and regulations to be prescribed by the Tax24-Commissioner, but otherwise shall be determined in the same manner as the25-corresponding federal deductions. 26-(5) If a business, trade, profession, or occupation is carried on27-partly within and partly without this state, the items of income and28-deduction derived from or connected with sources within this state shall29-be determined by apportionment under rules and regulations to be30-prescribed by the Tax Commissioner. 31-LB650-2025-LB650-2025--52--(6) Compensation paid by the United States for service in the armed1-forces of the United States performed by a nonresident individual shall2-not constitute income derived from sources within this state.3-(7) Compensation paid by a resident estate or trust for services by4-a nonresident fiduciary shall constitute income derived from sources5-within this state. 6-(8) Except as provided in subsection (9) of this section,7-compensation paid by a business, trade, or profession shall constitute8-income derived from sources within this state if: 9-(a) The individual's service is performed entirely within this10-state; 11-(b) The individual's service is performed both within and without12-this state, but the service performed without this state is incidental to13-the individual's service within this state; 14-(c) The individual is a nonresident and the individual's service is15-performed without this state for his or her convenience, but the service16-performed without this state is directly related to a business, trade, or17-profession carried on within this state and, except for the individual's18-convenience, the service could have been performed within this state ,19-provided that such individual must be present, in connection with such20-business, trade, or profession, within this state for more than seven21-days during the taxable year in which the compensation is earned. Only22-compensation paid to the individual for services performed within this23-state shall constitute income derived from sources within this state24-under this subdivision; or 25-(d) Some of the service is performed in this state and (i) the base26-of operations or, if there is no base of operations, the place from which27-the service is directed or controlled is in this state or (ii) the base28-of operations or the place from which the service is directed or29-controlled is not in any state in which some part of the service is30-performed, but the individual's residence is in this state.31-LB650-2025-LB650-2025--53--(9)(a) For purposes of this subsection: 1-(i) An individual shall be considered present and performing2-employment duties within this state for a day if the individual performs3-employment duties in this state. Any portion of the day during which the4-individual is in transit shall not be considered in determining the5-location of an individual's performance of employment duties;6-(ii) Conference means an event bringing individuals together to7-focus and discuss specific topics that are related to the employment of8-such individuals; 9-(iii) Employment duty days means days where an individual is earning10-wages for work being performed for an employer; 11-(iv) Time and attendance system means a system through which an12-individual is required to record the individual's work location for every13-day worked outside the state where the individual's employment duties are14-primarily performed and which is designed to allow the employer to15-allocate the individual's compensation for income tax purposes among all16-states in which the individual performs employment duties for the17-employer; and 18-(v) Training means the process of increasing the knowledge and19-skills of an employee to assist in the effective performance of the20-employee's job. 21-(b) Compensation paid to a nonresident individual who does not have22-Nebraska source income outside of attending a conference or training in23-this state shall not constitute income derived from sources within this24-state if all of the following conditions apply: 25-(i) The compensation is paid for employment duties performed by the26-individual while present in this state to attend a conference or27-training; 28-(ii) The individual is present in the state for seven or fewer29-employment duty days in the taxable year; 30-(iii) The individual performed employment duties in more than one31-LB650-2025-LB650-2025--54--state during the taxable year; and 1-(iv) Total compensation while in the state does not exceed five2-thousand dollars in the taxable year. 3-(c) Compensation paid to a nonresident individual who serves on the4-board of directors or similar governing body of a business and that5-relates to board or governing body activities taking place in this state6-shall not constitute income derived from sources within this state.7-(d) The Department of Revenue shall not require the payment of any8-penalties or interest otherwise applicable for failing to deduct and9-withhold income taxes if, when determining whether withholding was10-required, the employer met either of the following conditions:11-(i) The employer, in its sole discretion, maintains a time and12-attendance system specifically designed to allocate employee wages for13-income tax purposes among all taxing jurisdictions in which an individual14-performs employment duties for such employer, and the employer relied on15-data from that system not to withhold; or 16-(ii) The employer does not maintain a time and attendance system and17-the employer relied on: 18-(A) Its own records, maintained in the regular course of business,19-of the individual's location; 20-(B) The individual's reasonable determination of the time the21-individual expected to spend performing employment duties in this state,22-provided that the employer did not have actual knowledge of fraud on the23-part of the individual in making the determination and that the employer24-and the individual did not conspire to evade taxation in making the25-determination of location; 26-(C) Travel records; 27-(D) Travel expense reimbursement records; or 28-(E) A written statement from the individual of the number of days29-spent performing services in this state during the taxable year.30-(10) The changes made in this section by this legislative bill shall31-LB650-2025-LB650-2025--55--apply to taxable years beginning or deemed to begin on or after January1-1, 2026, under the Internal Revenue Code of 1986, as amended.2-Sec. 12. Section 77-2734.03, Revised Statutes Cumulative Supplement,3-2024, is amended to read: 4-77-2734.03 (1)(a) For taxable years commencing prior to January 1,5-1997, any (i) insurer paying a tax on premiums and assessments pursuant6-to section 77-908 or 81-523, (ii) electric cooperative organized under7-the Joint Public Power Authority Act, or (iii) credit union shall be8-credited, in the computation of the tax due under the Nebraska Revenue9-Act of 1967, with the amount paid during the taxable year as taxes on10-such premiums and assessments and taxes in lieu of intangible tax.11-(b) For taxable years commencing on or after January 1, 1997, any12-insurer paying a tax on premiums and assessments pursuant to section13-77-908 or 81-523, any electric cooperative organized under the Joint14-Public Power Authority Act, or any credit union shall be credited, in the15-computation of the tax due under the Nebraska Revenue Act of 1967, with16-the amount paid during the taxable year as (i) taxes on such premiums and17-assessments included as Nebraska premiums and assessments under section18-77-2734.05 and (ii) taxes in lieu of intangible tax.19-(c) For taxable years commencing or deemed to commence prior to, on,20-or after January 1, 1998, any insurer paying a tax on premiums and21-assessments pursuant to section 77-908 or 81-523 shall be credited, in22-the computation of the tax due under the Nebraska Revenue Act of 1967,23-with the amount paid during the taxable year as assessments allowed as an24-offset against premium and related retaliatory tax liability pursuant to25-section 44-4233. 26-(2) There shall be allowed to corporate taxpayers a tax credit for27-contributions to programs or projects certified for tax credit status as28-provided in the Creating High Impact Economic Futures Act.29-(3) There shall be allowed to corporate taxpayers a refundable30-income tax credit under the Beginning Farmer Tax Credit Act for all31-LB650-2025-LB650-2025--56--taxable years beginning or deemed to begin on or after January 1, 2001,1-under the Internal Revenue Code of 1986, as amended.2-(4) The changes made to this section by Laws 2004, LB 983, apply to3-motor fuels purchased during any tax year ending or deemed to end on or4-after January 1, 2005, under the Internal Revenue Code of 1986, as5-amended. 6-(5) There shall be allowed to corporate taxpayers refundable income7-tax credits under the Nebraska Advantage Microenterprise Tax Credit Act,8-the Cast and Crew Nebraska Act, the Nebraska Advantage Research and9-Development Act, the Nebraska Biodiesel Tax Credit Act, the Nebraska10-Higher Blend Tax Credit Act, the Nebraska Property Tax Incentive Act, the11-Relocation Incentive Act, and the Renewable Chemical Production Tax12-Credit Act. 13-(6) There shall be allowed to corporate taxpayers a nonrefundable14-income tax credit for investment in a biodiesel facility as provided in15-section 77-27,236. 16-(7) There shall be allowed to corporate taxpayers a nonrefundable17-income tax credit as provided in the Nebraska Job Creation and Mainstreet18-Revitalization Act, the New Markets Job Growth Investment Act, the School19-Readiness Tax Credit Act, the Child Care Tax Credit Act, the Affordable20-Housing Tax Credit Act, the Sustainable Aviation Fuel Tax Credit Act, the21-Nebraska Shortline Rail Modernization Act, the Nebraska Pregnancy Help22-Act, the Individuals with Intellectual and Developmental Disabilities23-Support Act, and sections 77-27,238, 77-27,240, and 77-27,241.24-Sec. 13. Section 77-27,187.02, Revised Statutes Cumulative25-Supplement, 2024, is amended to read: 26-77-27,187.02 (1) To earn the incentives set forth in the Nebraska27-Advantage Rural Development Act, the taxpayer shall file an application28-for an agreement with the Tax Commissioner. There shall be no new29-applications for incentives filed under this section after December 31,30-2027. 31-LB650-2025-LB650-2025--57--(2) The application shall contain: 1-(a) A written statement describing the full expected employment or2-type of livestock production and the investment amount for a qualified3-business, as described in section 77-27,189, in this state;4-(b) Sufficient documents, plans, and specifications as required by5-the Tax Commissioner to support the plan and to define a project; and6-(c) An application fee of (i) one hundred dollars for an investment7-amount of less than twenty-five thousand dollars, (ii) two hundred fifty8-dollars for an investment amount of at least twenty-five thousand dollars9-but less than fifty thousand dollars, and (iii) five hundred dollars for10-an investment amount of fifty thousand dollars or more. The fee shall be11-remitted to the State Treasurer for credit to the Nebraska Incentives12-Fund. The application and all supporting information shall be13-confidential except for the name of the taxpayer, the location of the14-project, and the amounts of increased employment or investment.15-(3)(a) The Tax Commissioner shall approve the application and16-authorize the total amount of credits expected to be earned as a result17-of the project if he or she is satisfied that the plan in the application18-defines a project that (i) meets the requirements established in section19-77-27,188 and such requirements will be reached within the required time20-period and (ii) for projects other than livestock modernization or21-expansion projects, is located in an eligible county, city, or village.22-(b) For applications filed in calendar year 2016 and each year23-thereafter, the Tax Commissioner shall not approve further applications24-from applicants described in subsection (1) of section 77-27,188 once the25-expected credits from approved projects in this category total: For26-calendar years 2016 through 2022, one million dollars; and for calendar27-years year 2023 through 2025 and each calendar year thereafter, two28-million dollars ; and for calendar year 2026 and each calendar year29-thereafter, one million dollars. For applications filed in calendar year30-2016 and each year thereafter, the Tax Commissioner shall not approve31-LB650-2025-LB650-2025--58--further applications from applicants described in subsection (2) of1-section 77-27,188 once the expected credits from approved projects in2-this category total: For calendar year 2016, five hundred thousand3-dollars; for calendar years 2017 and 2018, seven hundred fifty thousand4-dollars; for calendar years 2019, 2020, and 2021, one million dollars;5-and for calendar years year 2022 through 2025 and each calendar year6-thereafter, ten million dollars ; and for calendar year 2026 and each7-calendar year thereafter, one million dollars. Four hundred dollars of8-the application fee shall be refunded to the applicant if the application9-is not approved because the expected credits from approved projects10-exceed such amounts. 11-(c) Applications for benefits shall be considered separately and in12-the order in which they are received for the categories represented by13-subsections (1) and (2) of section 77-27,188. 14-(d) Applications shall be filed by November 1 and shall be complete15-by December 1 of each calendar year. Any application that is filed after16-November 1 or that is not complete on December 1 shall be considered to17-be filed during the following calendar year. 18-(4) After approval, the taxpayer and the Tax Commissioner shall19-enter into a written agreement. The taxpayer shall agree to complete the20-project, and the Tax Commissioner, on behalf of the State of Nebraska,21-shall designate the approved plans of the taxpayer as a project and, in22-consideration of the taxpayer's agreement, agree to allow the taxpayer to23-use the incentives contained in the Nebraska Advantage Rural Development24-Act up to the total amount that were authorized by the Tax Commissioner25-at the time of approval. The application, and all supporting26-documentation, to the extent approved, shall be considered a part of the27-agreement. The agreement shall state: 28-(a) The levels of employment and investment required by the act for29-the project; 30-(b) The time period under the act in which the required level must31-LB650-2025-LB650-2025--59--be met; 1-(c) The documentation the taxpayer will need to supply when claiming2-an incentive under the act; 3-(d) The date the application was filed; and 4-(e) The maximum amount of credits authorized. 5-Sec. 14. Section 77-27,188, Revised Statutes Cumulative Supplement,6-2024, is amended to read: 7-77-27,188 (1) A refundable credit against the taxes imposed by the8-Nebraska Revenue Act of 1967 shall be allowed to any taxpayer who has an9-approved application pursuant to the Nebraska Advantage Rural Development10-Act, who is engaged in a qualified business as described in section11-77-27,189, and who after January 1, 2006: 12-(a)(i) Increases employment by two new equivalent employees and13-makes an increased investment of at least one hundred twenty-five14-thousand dollars prior to the end of the first taxable year after the15-year in which the application was submitted in (A) any county in this16-state with a population of fewer than fifteen thousand inhabitants,17-according to the most recent federal decennial census, (B) any village in18-this state, or (C) any area within the corporate limits of a city of the19-metropolitan class consisting of one or more contiguous census tracts, as20-determined by the most recent federal decennial census, which contain a21-percentage of persons below the poverty line of greater than thirty22-percent, and all census tracts contiguous to such tract or tracts; or23-(ii) Increases employment by five new equivalent employees and makes24-an increased investment of at least two hundred fifty thousand dollars25-prior to the end of the first taxable year after the year in which the26-application was submitted in any county in this state with a population27-of less than twenty-five thousand inhabitants, according to the most28-recent federal decennial census, or any city of the second class; and29-(b) Pays a minimum qualifying wage of eight dollars and twenty-five30-cents per hour to the new equivalent employees for which tax credits are31-LB650-2025-LB650-2025--60--sought under the Nebraska Advantage Rural Development Act. The Department1-of Revenue shall adjust the minimum qualifying wages required for2-applications filed after January 1, 2004, and each January 1 thereafter,3-as follows: The current rural Nebraska average weekly wage shall be4-divided by the rural Nebraska average weekly wage for 2003; and the5-result shall be multiplied by the eight dollars and twenty-five cents6-minimum qualifying wage for 2003 and rounded to the nearest one cent. The7-amount of increase or decrease in the minimum qualifying wages for any8-year shall be the cumulative change in the rural Nebraska average weekly9-wage since 2003. For purposes of this subsection, rural Nebraska average10-weekly wage means the most recent average weekly wage paid by all11-employers in all counties with a population of less than twenty-five12-thousand inhabitants as reported by October 1 by the Department of Labor.13-For purposes of this section, a teleworker working in Nebraska from14-his or her residence for a taxpayer shall be considered an employee of15-the taxpayer, and property of the taxpayer provided to the teleworker16-working in Nebraska from his or her residence shall be considered an17-investment. Teleworker includes an individual working on a per-item basis18-and an independent contractor working for the taxpayer so long as the19-taxpayer withholds Nebraska income tax from wages or other payments made20-to such teleworker. For purposes of calculating the number of new21-equivalent employees when the teleworkers are paid on a per-item basis or22-are independent contractors, the total wages or payments made to all such23-new employees during the year shall be divided by the qualifying wage as24-determined in subdivision (b) of this subsection, with the result divided25-by two thousand eighty hours. 26-(2) A refundable credit against the taxes imposed by the Nebraska27-Revenue Act of 1967 shall be allowed to any taxpayer who (a) has an28-approved application pursuant to the Nebraska Advantage Rural Development29-Act, (b) is engaged in livestock production, and (c) invests at least (i)30-fifty thousand dollars for livestock modernization or expansion for31-LB650-2025-LB650-2025--61--applications filed before January 1, 2024, (ii) or at least ten thousand1-dollars for livestock modernization or expansion for applications filed2-on or after January 1, 2024 , and before January 1, 2026, or (iii) fifty3-thousand dollars for livestock modernization or expansion for4-applications filed on or after January 1, 2026. 5-(3) The amount of the credit allowed under subsection (1) of this6-section shall be three thousand dollars for each new equivalent employee7-and two thousand seven hundred fifty dollars for each fifty thousand8-dollars of increased investment. For applications filed before January 1,9-2016, the amount of the credit allowed under subsection (2) of this10-section shall be ten percent of the investment, not to exceed a credit of11-thirty thousand dollars. For applications filed on or after January 1,12-2016, and before April 20, 2022, the amount of the credit allowed under13-subsection (2) of this section shall be ten percent of the investment,14-not to exceed a credit of one hundred fifty thousand dollars per15-application. For applications filed on or after April 20, 2022, and16-before January 1, 2026, the amount of the credit allowed under subsection17-(2) of this section shall be ten percent of the investment, not to exceed18-a credit of five hundred thousand dollars per application. For19-applications filed on or after January 1, 2026, the amount of the credit20-allowed under subsection (2) of this section shall be ten percent of the21-investment, not to exceed a credit of one hundred fifty thousand dollars22-per application. For each application, a taxpayer engaged in livestock23-production may qualify for a credit under either subsection (1) or (2) of24-this section, but cannot qualify for more than one credit per25-application. 26-(4) An employee of a qualified employee leasing company shall be27-considered to be an employee of the client-lessee for purposes of this28-section if the employee performs services for the client-lessee. A29-qualified employee leasing company shall provide the Department of30-Revenue access to the records of employees leased to the client-lessee.31-LB650-2025-LB650-2025--62--(5) The credit shall not exceed the amounts set out in the1-application and approved by the Tax Commissioner. 2-(6)(a) If a taxpayer who receives tax credits creates fewer jobs or3-less investment than required in the project agreement, the taxpayer4-shall repay the tax credits as provided in this subsection.5-(b) If less than seventy-five percent of the required jobs in the6-project agreement are created, one hundred percent of the job creation7-tax credits shall be repaid. If seventy-five percent or more of the8-required jobs in the project agreement are created, no repayment of the9-job creation tax credits is necessary. 10-(c) If less than seventy-five percent of the required investment in11-the project agreement is created, one hundred percent of the investment12-tax credits shall be repaid. If seventy-five percent or more of the13-required investment in the project agreement is created, no repayment of14-the investment tax credits is necessary. 15-(7) For taxpayers who submitted applications for benefits under the16-Nebraska Advantage Rural Development Act before January 1, 2006,17-subsection (1) of this section, as such subsection existed immediately18-prior to such date, shall continue to apply to such taxpayers. The19-changes made by Laws 2005, LB 312, shall not preclude a taxpayer from20-receiving the tax incentives earned prior to January 1, 2006.21-Sec. 15. Section 77-27,241, Revised Statutes Cumulative Supplement,22-2024, is amended to read: 23-77-27,241 (1) For purposes of this section: 24-(a) Agricultural producer means an individual or entity whose income25-is primarily attributable to crop or livestock production in the State of26-Nebraska; 27-(b) Department means the Department of Revenue;28-(c) Food bank means an organization in this state that:29-(i) Is exempt from federal income taxation under section 501(c)(3)30-of the Internal Revenue Code of 1986, as amended; and31-LB650-2025-LB650-2025--63--(ii) Distributes food in ten or more counties in Nebraska and1-qualifies for the Emergency Food Assistance Program administered by the2-United States Department of Agriculture; 3-(d) Food pantry means an organization in this state that:4-(i) Is exempt from federal income taxation under section 501(c)(3)5-of the Internal Revenue Code of 1986, as amended; and6-(ii) Distributes emergency food supplies to low-income individuals7-in this state who would otherwise not have access to such food supplies;8-(e) Food rescue means an organization in this state that:9-(i) Is exempt from federal income taxation under section 501(c)(3)10-of the Internal Revenue Code of 1986, as amended; and11-(ii) Accepts donations of food and delivers such food to food banks12-or food pantries so that such food may be distributed to low-income13-individuals in this state; 14-(f) Grocery store retailer means a retailer located in this state15-that is primarily engaged in business activities classified as code16-445110 under the North American Industry Classification System;17-(g) Qualifying agricultural food donation means a donation made by18-an agricultural producer to a food bank, food pantry, or food rescue of19-fresh or frozen fruits, vegetables, eggs, dairy products, or meat20-products grown or produced in the State of Nebraska which meets all21-applicable quality and labeling standards, along with any other22-applicable requirements of the food bank, food pantry, or food rescue to23-which the qualifying agricultural food donation is made; and24-(h) Restaurant means a business located in this state that is25-primarily engaged in business activities classified as code 722511,26-722513, 722514, or 722515 under the North American Industry27-Classification System. 28-(2) For taxable years beginning or deemed to begin on or after29-January 1, 2025, and before January 1, 2026, under the Internal Revenue30-Code of 1986, as amended, a credit against the income tax imposed by the31-LB650-2025-LB650-2025--64--Nebraska Revenue Act of 1967 shall be allowed to: 1-(a) Any grocery store retailer or restaurant that donates food to a2-food bank, food pantry, or food rescue during the taxable year; and3-(b) Any agricultural producer that makes a qualifying agricultural4-food donation to a food bank, food pantry, or food rescue during the5-taxable year. 6-(3) Subject to subsection (7) of this section, the credit provided7-in this section shall be a nonrefundable credit in an amount equal to8-fifty percent of the value of the food donations or qualifying9-agricultural food donations made during the taxable year, not to exceed10-two thousand five hundred dollars. Any amount of the credit that the11-taxpayer is prohibited from claiming in a taxable year may be carried12-forward to any of the three subsequent taxable years.13-(4) For purposes of this section, food donated by a grocery store14-retailer or restaurant shall be valued at its wholesale value. A15-qualifying agricultural food donation shall be valued at the prevailing16-market value of the product at the time of donation, plus the direct cost17-incurred by the agricultural producer for processing the product.18-(5) To receive a credit under this section, a taxpayer shall submit19-an application to the department in a form and manner prescribed by the20-department. The application shall include the amount of food donated21-during the taxable year and any other information required by the22-department. 23-(6) If the department determines that an application is complete and24-that the taxpayer qualifies for credits, the department shall approve the25-application within the limits set forth in this section and shall certify26-the amount of credits approved to the taxpayer. 27-(7) The department may approve up to five hundred thousand dollars28-of credits in fiscal year 2025-26 and each fiscal year thereafter . If the29-amount of credits requested by qualified taxpayers in any year exceeds30-such limit, the department shall allocate credits proportionally based on31-LB650-2025-LB650-2025--65--the amounts requested so that the limit is not exceeded.1-(8) A taxpayer shall claim the credit by attaching the tax credit2-certification received from the department under subsection (6) of this3-section to the taxpayer's tax return. 4-(9) Any amount relating to such food donations or qualifying5-agricultural food donations that was deducted as a charitable6-contribution on the taxpayer's federal income tax return must be added7-back in the determination of Nebraska taxable income before the credit8-provided in this section may be claimed. 9-(10) No credit granted under this section shall be transferred,10-sold, or assigned. No taxpayer shall be eligible to receive a credit11-under this section if such taxpayer employs persons who are not12-authorized to work in the United States under federal law. No taxpayer13-shall be able to claim more than one credit under this section for a14-single donation. 15-(11) A food bank, food pantry, or food rescue may accept or reject16-any food donated under this section for any reason. Any food that is17-rejected shall not qualify for a credit under this section.18-(12) The department may adopt and promulgate rules and regulations19-to carry out this section. 20-Sec. 16. Section 77-3109, Revised Statutes Cumulative Supplement,21-2024, is amended to read: 22-77-3109 (1) For taxable years beginning or deemed to begin on or23-after January 1, 2025, and before January 1, 2026, under the Internal24-Revenue Code of 1986, as amended, an employer that pays relocation25-expenses for a qualifying employee shall be eligible to receive a credit26-that may be used to offset any income taxes due under the Nebraska27-Revenue Act of 1967, any premium and related retaliatory taxes due under28-section 44-150, 77-908, or 81-523, or any franchise taxes due under29-sections 77-3801 to 77-3807. 30-(2) The credit provided in this section shall be a refundable credit31-LB650-2025-LB650-2025--66--in an amount equal to fifty percent of the relocation expenses that were1-paid by the employer for a qualifying employee during the taxable year,2-not to exceed a maximum credit of five thousand dollars per qualifying3-employee. 4-(3) No credit shall be granted under this section unless the5-qualifying employee will receive an annual salary of at least seventy6-thousand dollars per year and not more than two hundred fifty thousand7-dollars per year. 8-(4) Any credit claimed by an employer under this section shall be9-recaptured by the department if the qualifying employee moves out of the10-state within two years after the credit is claimed. Any amount required11-to be recaptured shall be deemed an underpayment of tax and shall be due12-and payable on the tax return that is due immediately following the loss13-of residency. 14-(5) Notwithstanding any other limitation contained in the laws of15-this state, collection of any taxes deemed to be an underpayment by this16-section shall be allowed for a period of three years following the due17-date of the recaptured taxes. 18-(6) For taxable years beginning or deemed to begin on or after19-January 1, 2026, under the Internal Revenue Code of 1986, as amended, the20-department shall adjust the dollar amounts provided in subsection (3) of21-this section by the same percentage used to adjust individual income tax22-brackets under subsection (3) of section 77-2715.03.23-(6) (7) An employer shall apply for the credit provided in this24-section by submitting an application to the department on a form25-prescribed by the department. Subject to subsection (7) (8) of this26-section, if the department determines that the employer qualifies for tax27-credits under this section, the department shall approve the application28-and certify the amount of credits approved to the employer.29-(7) (8) The department shall consider applications in the order in30-which they are received and may approve tax credits under this section in31-LB650-2025-LB650-2025--67--any year until the aggregate limit allowed under section 77-3110 has been1-reached. 2-(8) (9) An employer shall claim any tax credits granted under this3-section by attaching the tax credit certification received from the4-department under subsection (6) (7) of this section to the employer's tax5-return. 6-(9) (10) An employer claiming a tax credit under the Relocation7-Incentive Act against any premium and related retaliatory taxes due under8-section 44-150, 77-908, or 81-523 shall not be required to pay any9-additional retaliatory tax as a result of claiming the tax credit. The10-tax credit may fully offset any retaliatory tax imposed under Nebraska11-law. Any tax credit claimed shall be considered a payment of tax for12-purposes of subsection (1) of section 77-2734.03. 13-Sec. 17. Section 77-3110, Revised Statutes Cumulative Supplement,14-2024, is amended to read: 15-77-3110 The department may approve tax credits under the Relocation16-Incentive Act each year until the total amount of credits approved for17-the year reaches five million dollars. 18-Sec. 18. Section 77-3111, Revised Statutes Cumulative Supplement,19-2024, is amended to read: 20-77-3111 (1) For taxable years beginning or deemed to begin on or21-after January 1, 2025, and before January 1, 2026, under the Internal22-Revenue Code of 1986, as amended, a qualifying employee shall be eligible23-to make a one-time election within two calendar years of becoming a24-Nebraska resident to exclude all Nebraska-sourced wage income earned and25-received from an employer, to the extent included in federal adjusted26-gross income, if (a) the annual Nebraska-sourced wage income of the27-position accepted by the qualifying employee is at least seventy thousand28-dollars per year but not more than two hundred fifty thousand dollars per29-year and (b) the qualifying employee was not a resident of the state in30-the year prior to the year in which residency is being claimed for31-LB650-2025-LB650-2025--68--purposes of qualifying for such exclusion. 1-(2) For any qualifying employee who fails to maintain residency for2-two full calendar years following the calendar year in which the3-exclusion was taken, any reduction in tax as a result of such exclusion4-shall be fully recaptured from the qualifying employee by the department.5-The amount required to be recaptured shall be deemed an underpayment of6-tax and shall be due and payable on the tax return that is due7-immediately following the loss of residency. 8-(3) Notwithstanding any other limitation contained in the laws of9-this state, collection of any taxes deemed to be an underpayment by this10-section shall be allowed for a period of three years following the due11-date of the recaptured taxes. 12-(4) For taxable years beginning or deemed to begin on or after13-January 1, 2026, under the Internal Revenue Code of 1986, as amended, the14-department shall adjust the dollar amounts provided in subsection (1) of15-this section by the same percentage used to adjust individual income tax16-brackets under subsection (3) of section 77-2715.03.17-Sec. 19. Section 77-3120, Revised Statutes Cumulative Supplement,18-2024, is amended to read: 19-77-3120 The annual limit on the total amount of tax credits allowed20-(1) for calendar year years 2025 and 2026 shall be nine hundred thousand21-dollars per year with a total of three hundred thousand dollars per year22-for each congressional district and (2) for calendar year 2027 and each23-calendar year thereafter shall be three million dollars per year with a24-total of one million dollars per year for each congressional district .25-Once credits have reached the annual limit for any calendar year , no26-additional credits shall be allowed for such calendar year. The maximum27-amount of credits per program or project shall not exceed one hundred28-fifty thousand dollars per year for the first congressional district and29-one hundred fifty thousand dollars per year for the third congressional30-district. Tax credits shall not be allowed for calendar year 2026 or any31-LB650-2025-LB650-2025--69--calendar year thereafter, except that any tax credits allowed in calendar1-year 2025 that are unused may be carried forward as provided in2-subsection (6) of section 77-3119. 3-Sec. 20. Section 77-3125, Revised Statutes Cumulative Supplement,4-2024, is amended to read: 5-77-3125 (1) For taxable years beginning or deemed to begin on or6-after January 1, 2025, and before January 1, 2026, a production company7-shall be eligible to receive tax credits under the Cast and Crew Nebraska8-Act for qualifying expenditures incurred by the production company in9-Nebraska directly attributable to a qualified production activity.10-(2) The tax credit under the Cast and Crew Nebraska Act shall be a11-refundable tax credit allowed against the income tax imposed by the12-Nebraska Revenue Act of 1967 in an amount equal to twenty percent of the13-qualifying expenditures incurred by the production company directly14-attributable to a qualified production activity. 15-(3) The amount of the tax credit may be increased by any or all of16-the following amounts: 17-(a) An additional five percent of the qualifying expenditures18-incurred by the production company directly attributable to a qualified19-production activity if the qualified production activity films Nebraska20-as Nebraska in Nebraska, contains a minimum of seventy percent of the21-principal photography from the original submitted screenplay based in22-Nebraska, and uses a screen credit; 23-(b) An additional five percent of the qualifying expenditures24-incurred by the production company directly attributable to a full-length25-qualified production activity if the qualified production activity films26-entirely in areas at least thirty miles from the corporate limits of a27-city of the metropolitan class or city of the primary class; and28-(c)(i) An additional five percent of qualified expenditures incurred29-by the production company directly attributable to a full-length30-qualified production activity that are wages paid, at a rate of at least31-LB650-2025-LB650-2025--70--the Nebraska minimum wage, to Nebraska residents who are employed as1-first-time actors or first-time below-the-line employees.2-(ii) For purposes of subdivision (3)(c)(i) of this section, first-3-time means the individual's first-time receiving compensation and wages4-as either an actor or as a below-the-line employee on a full-length film5-in the State of Nebraska. 6-(iii) The wages of a maximum of ten first-time actors and below-the-7-line employees per full-length film can be used in calculating the tax8-credit in subdivision (3)(c)(i) of this section. 9-Sec. 21. Section 77-3126, Revised Statutes Cumulative Supplement,10-2024, is amended to read: 11-77-3126 (1) The total amount of tax credits allowed in any fiscal12-year 2025-26 under the Cast and Crew Nebraska Act shall not exceed five13-hundred thousand dollars in fiscal year 2025-26 and one million dollars14-in any fiscal year thereafter. 15-(2) The maximum allowable tax credit claimed under the act in any16-single taxable year for any qualified production activity that is a full-17-length film, made-for-television movie, television series of at least18-five episodes, or streaming television series shall not exceed five19-hundred thousand dollars in fiscal year 2025-26 and one million dollars20-in any fiscal year thereafter. 21-Sec. 22. Section 77-3136, Revised Statutes Cumulative Supplement,22-2024, is amended to read: 23-77-3136 (1) For taxable years beginning or deemed to begin on or24-after January 1, 2025, and before January 1, 2026, under the Internal25-Revenue Code of 1986, as amended, an eligible taxpayer shall be allowed a26-credit against the income tax imposed by the Nebraska Revenue Act of 196727-or any tax imposed by sections 77-907 to 77-918 or 77-3801 to 77-3807 for28-qualified shortline railroad maintenance expenditures.29-(2) The credit provided in this section shall be a nonrefundable tax30-credit equal to fifty percent of the qualified shortline railroad31-LB650-2025-LB650-2025--71--maintenance expenditures incurred during the taxable year by the eligible1-taxpayer. The amount of the credit may not exceed an amount equal to one2-thousand five hundred dollars multiplied by the number of miles of3-railroad track owned or leased in the state by the eligible taxpayer at4-the end of the taxable year. 5-(3) The total amount of tax credits allowed in a fiscal year 2025-266-under the Nebraska Shortline Rail Modernization Act shall not exceed five7-hundred thousand dollars for fiscal year 2025-26 and one million dollars8-for any fiscal year thereafter. 9-Sec. 23. Section 77-3143, Revised Statutes Cumulative Supplement,10-2024, is amended to read: 11-77-3143 There shall be no new applications for tax credits filed12-under the Nebraska Shortline Rail Modernization Act after December 31,13-2025 2033. All applications and all credits pending or approved before14-such date shall continue in full force and effect.15-Sec. 24. Section 77-3152, Revised Statutes Cumulative Supplement,16-2024, is amended to read: 17-77-3152 (1) Prior to making a contribution to an eligible charitable18-organization, any taxpayer desiring to claim a tax credit under the19-Nebraska Pregnancy Help Act shall notify the eligible charitable20-organization of the taxpayer's intent to make a contribution and the21-amount to be claimed as a tax credit. Upon receiving each such22-notification, the eligible charitable organization shall notify the23-department of the intended tax credit amount. If the department24-determines that the intended tax credit amount in the notification would25-exceed the limit specified in subsection (3) of this section, the26-department shall notify the eligible charitable organization of its27-determination within thirty days after receipt of the notification. The28-eligible charitable organization shall then promptly notify the taxpayer29-of the department's determination that the intended tax credit amount in30-the notification is not available. If an amount less than the amount31-LB650-2025-LB650-2025--72--indicated in the notification is available for a tax credit, the1-department shall notify the eligible charitable organization of the2-available amount and the eligible charitable organization shall notify3-the taxpayer of the available amount within three business days.4-(2) In order to be allowed a tax credit as provided by the act, the5-taxpayer shall make its contribution between thirty-one and sixty days6-after notifying the eligible charitable organization of the taxpayer's7-intent to make a contribution. If the eligible charitable organization8-does not receive the contribution within the required time period, it9-shall notify the department of such fact and the department shall no10-longer include such amount when calculating whether the limit prescribed11-in subsection (3) of this section has been exceeded. If the eligible12-charitable organization receives the contribution within the required13-time period, it shall provide the taxpayer with a receipt for the14-contribution. The receipt shall show the name and address of the eligible15-charitable organization, the name, address, and, if available, tax16-identification number of the taxpayer making the contribution, the amount17-of the contribution, and the date the contribution was received.18-(3) The department shall consider notifications regarding intended19-tax credit amounts in the order in which they are received to ascertain20-whether the intended tax credit amounts are within the annual limit21-provided in this subsection. The annual limit on the total amount of tax22-credits for fiscal year 2025-26 shall be five hundred thousand dollars.23-The annual limit on the total amount of tax credits for fiscal year24-2026-27 and each fiscal year thereafter shall be zero one million25-dollars. Once credits have reached the annual limit for any fiscal year,26-no additional credits shall be allowed for such fiscal year. Credits27-shall be prorated among the notifications received on the day the annual28-limit is exceeded. No more than fifty percent of the credits allowed for29-any fiscal year shall be for contributions to a single eligible30-charitable organization. 31-LB650-2025-LB650-2025--73--Sec. 25. Section 77-3169, Revised Statutes Cumulative Supplement,1-2024, is amended to read: 2-77-3169 (1) For taxable years beginning or deemed to begin on or3-after January 1, 2024, and before January 1, 2026, under the Internal4-Revenue Code of 1986, as amended, a taxpayer shall be eligible to receive5-a one-time credit against the income tax imposed by the Nebraska Revenue6-Act of 1967 for the cost of installation of a reverse osmosis system at7-the primary residence of the taxpayer if test results for the following8-in the drinking water for such residence are above:9-(a) Ten parts per million for nitrate nitrogen;10-(b) Four parts per trillion for perfluorooctanoic acid or11-perfluorooctanesulfonic acid; 12-(c) Thirty micrograms per liter or thirty parts per billion for13-uranium; or 14-(d) One on the Hazard Index for perfluorononanoic acid,15-perfluorohexanesulfonic acid, hexafluoropropylene oxide dimer acid and16-its ammonium salt, or perfluorobutanesulfonic acid.17-(2) Only one taxpayer per residence may be a recipient of the18-credit. 19-(3) The credit provided in this section shall be a refundable tax20-credit equal to fifty percent of the cost incurred by the taxpayer during21-the taxable year for installation of the reverse osmosis system, up to a22-maximum of one thousand dollars. 23-(4) A taxpayer shall apply for the credit provided in this section24-by submitting an application to the department with the following25-information: 26-(a) Documentation of the test results of the drinking water for the27-taxpayer's primary residence; 28-(b) Documentation of the cost of the reverse osmosis system29-installed at such residence; and 30-(c) Any other documentation required by the department.31-LB650-2025-LB650-2025--74--(5) If the department determines that the taxpayer qualifies for the1-tax credit under this section, the department shall approve the2-application and certify the amount of the approved credit to the3-taxpayer. 4-(6) The department shall consider applications in the order in which5-they are received and may approve tax credits under this section each6-fiscal year until the aggregate limit allowed under subsection (7) of7-this section has been reached. 8-(7) The department may approve tax credits for each fiscal years9-2024-25 and 2025-26 year until the total amount of credits approved for10-the applicable fiscal year reaches five hundred thousand dollars for11-fiscal years 2024-25, 2025-26, and 2026-27 and one million dollars for12-any fiscal year thereafter. 13-(8) A taxpayer shall claim any tax credits granted under this14-section by attaching the tax credit certification received from the15-department under subsection (5) of this section to the taxpayer's tax16-return. 17-Sec. 26. Section 77-3806, Revised Statutes Cumulative Supplement,18-2024, is amended to read: 19-77-3806 (1) The tax return shall be filed and the total amount of20-the franchise tax shall be due on the fifteenth day of the third month21-after the end of the taxable year. No extension of time to pay the tax22-shall be granted. If the Tax Commissioner determines that the amount of23-tax can be computed from available information filed by the financial24-institutions with either state or federal regulatory agencies, the Tax25-Commissioner may, by regulation, waive the requirement for the financial26-institutions to file returns. 27-(2) Sections 77-2714 to 77-27,135 relating to deficiencies,28-penalties, interest, the collection of delinquent amounts, and appeal29-procedures for the tax imposed by section 77-2734.02 shall also apply to30-the tax imposed by section 77-3802. If the filing of a return is waived31-LB650-2025-LB650-2025--75--by the Tax Commissioner, the payment of the tax shall be considered the1-filing of a return for purposes of sections 77-2714 to 77-27,135.2-(3) No refund of the tax imposed by section 77-3802 shall be allowed3-unless a claim for such refund is filed within ninety days of the date on4-which (a) the tax is due or was paid, whichever is later, (b) a change is5-made to the amount of deposits or the net financial income of the6-financial institution by a state or federal regulatory agency, or (c) the7-Nebraska Investment Finance Authority issues an eligibility statement to8-the financial institution pursuant to the Affordable Housing Tax Credit9-Act. 10-(4) Any such financial institution shall receive a credit on the11-franchise tax as provided under the Affordable Housing Tax Credit Act,12-the Creating High Impact Economic Futures Act, the Nebraska Higher Blend13-Tax Credit Act, the Nebraska Job Creation and Mainstreet Revitalization14-Act, the Nebraska Property Tax Incentive Act, the Relocation Incentive15-Act, the New Markets Job Growth Investment Act, the Sustainable Aviation16-Fuel Tax Credit Act, and the Nebraska Shortline Rail Modernization Act.17-Sec. 27. Section 77-4405, Revised Statutes Cumulative Supplement,18-2024, is amended to read: 19-77-4405 (1) If the department finds that creation of the good life20-district would not exceed the limits prescribed in subsection (4) of21-section 77-4404 and the project described in the application meets the22-eligibility requirements of this section, the application shall be23-approved, except that no applications shall be approved on or after the24-operative date of this section. 25-(2) A project is eligible if: 26-(a) The applicant demonstrates that the total new development costs27-of the project will exceed: 28-(i) One billion dollars if the project will be located in a city of29-the metropolitan class; 30-(ii) Seven hundred fifty million dollars if the project will be31-LB650-2025-LB650-2025--76--located in a city of the primary class; 1-(iii) Five hundred million dollars if the project will be located in2-a city of the first class, city of the second class, or village within a3-county with a population of one hundred thousand inhabitants or more; or4-(iv) One hundred million dollars if the project will be located in a5-city of the first class, city of the second class, village, or sanitary6-and improvement district within a county with a population of less than7-one hundred thousand inhabitants; 8-(b) The applicant demonstrates that the project will directly or9-indirectly result in the creation of: 10-(i) One thousand new jobs if the project will be located in a city11-of the metropolitan class; 12-(ii) Five hundred new jobs if the project will be located in a city13-of the primary class; 14-(iii) Two hundred fifty new jobs if the project will be located in a15-city of the first class, city of the second class, or village within a16-county with a population of one hundred thousand inhabitants or more; or17-(iv) Fifty new jobs if the project will be located in a city of the18-first class, city of the second class, village, or sanitary and19-improvement district within a county with a population of less than one20-hundred thousand inhabitants; and 21-(c)(i) For a project that will be located in a county with a22-population of one hundred thousand inhabitants or more, the applicant23-demonstrates that, upon completion of the project, at least twenty24-percent of sales at the project will be made to persons residing outside25-the State of Nebraska or the project will generate a minimum of six26-hundred thousand visitors per year who reside outside the State of27-Nebraska and the project will attract new-to-market retail to the state28-and will generate a minimum of three million visitors per year. Students29-from another state who attend a Nebraska public or private university30-shall not be counted as out-of-state residents for purposes of this31-LB650-2025-LB650-2025--77--subdivision; or 1-(ii) For a project that will be located in a county with a2-population of less than one hundred thousand inhabitants, the applicant3-demonstrates that, upon completion of the project, at least twenty4-percent of sales at the project will be made to persons residing outside5-the State of Nebraska. Students from another state who attend a Nebraska6-public or private university shall not be counted as out-of-state7-residents for purposes of this subdivision. 8-(3) The applicant must certify that any anticipated diversion of9-state sales tax revenue will be offset or exceeded by sales tax paid on10-anticipated development costs, including construction to real property,11-during the same period. 12-(4) A project is not eligible if: 13-(a) The project includes a licensed racetrack enclosure or an14-authorized gaming operator as such terms are defined in section 9-1103,15-except that this subdivision shall not apply to infrastructure or16-facilities that are (i) publicly owned or (ii) used by or at the17-direction of the Nebraska State Fair Board, so long as no gaming devices18-or games of chance are expected to be operated by an authorized gaming19-operator within any such facilities; 20-(b) The project received funds pursuant to the Shovel-Ready Capital21-Recovery and Investment Act or the Economic Recovery Act, except that22-this subdivision shall not apply to any project located in a qualified23-inland port district; or 24-(c) The project includes any portion of a public or private25-university. 26-(5) Approval of an application under this section shall establish27-the good life district as that area depicted in the map accompanying the28-application as submitted pursuant to subdivision (1)(b) of section29-77-4404. Such district shall last for thirty years and shall not exceed30-two thousand acres in size if in a city of the metropolitan class, three31-LB650-2025-LB650-2025--78--thousand acres in size if in any other class of city or village, or, for1-any good life district created within a qualified inland port district,2-the size of the qualified inland port district. 3-(6)(a) Prior to July 1, 2024, any transactions occurring within a4-good life district shall be subject to a reduced state sales tax rate as5-provided in subdivision (5) of section 77-2701.02. 6-(b) On and after July 1, 2024, any transactions occurring within a7-good life district shall be subject to a reduced state sales tax rate as8-provided in subdivision (6) of section 77-2701.02. 9-(7) After establishment of a good life district pursuant to this10-section, a good life district applicant may adjust the boundaries of the11-district by filing an amended map with the department and updates or12-supplements to the application materials originally submitted by the good13-life district applicant to demonstrate the eligibility criteria in14-subsection (2) of this section will be met after the boundaries are15-adjusted. The department shall approve the new boundaries on the16-following conditions: 17-(a) The department determines that the eligibility criteria in18-subsection (2) of this section will continue to be met after the proposed19-boundary adjustment based on the materials submitted by the good life20-district applicant; and 21-(b) For any area being removed from the district:22-(i) The department shall solicit and receive from the city or23-village in which all or a portion of the good life district is located24-confirmation that no area being removed is attributable to local sources25-of revenue which have been pledged for payment of bonds issued pursuant26-to the Good Life District Economic Development Act. Confirmation may27-include resolutions, meeting minutes, or other official measures adopted28-or taken by the city council or village board of trustees; and29-(ii) Either the department has received written consent from the30-owners of real estate proposed to be removed from the good life district,31-LB650-2025-LB650-2025--79--or a hearing is held by the department in the manner described in this1-subdivision and the department finds that the removal of the affected2-property is in the best interests of the state and that the removal is3-consistent with the goals and purposes of the approved application for4-the good life district. In determining whether removal of the affected5-property is consistent with the goals and purposes of the approved6-application for the good life district, the department may consider any7-formal action taken by the city council or village board of trustees.8-Proof of such formal action may include resolutions, meeting minutes, or9-other official measures adopted or taken. Such hearing must be held at10-least ninety days after delivering written notice via certified mail to11-the owners of record for the affected real estate proposed to be removed12-from the good life district. The hearing must be open to the public and13-for the stated purpose of hearing testimony regarding the proposed14-removal of property from the good life district. Attendees must be given15-the opportunity to speak and submit documentary evidence at, prior to, or16-contemporaneously with such hearing for the department to consider in17-making its findings. 18-(8) After establishment of a good life district pursuant to this19-section, but within twelve months after the approval of the original20-application or after any modification is made to the boundaries of a good21-life district pursuant to this section, a city or village in which any22-part of the applicable good life district is located may file a23-supplemental request to the department to increase the size of the good24-life district by up to one thousand acres. Such supplemental request25-shall be accompanied by such materials and certifications necessary to26-demonstrate that such increase would not negatively impact the criteria27-that were necessary for the original establishment of such good life28-district. 29-(9) After establishment of a good life district pursuant to this30-section and after any modification is made to the boundaries of a good31-LB650-2025-LB650-2025--80--life district pursuant to this section, the department shall transmit to1-any city or village which includes such good life district within its2-boundaries or within its extraterritorial zoning jurisdiction (a) all3-information held by the department related to the application and4-approval of the application, (b) all documentation which describes the5-property included within the good life district, and (c) all6-documentation transmitted to the applicant for such good life district7-with approval of the application and establishment of the good life8-district. Such city or village shall be subject to the same9-confidentiality restrictions as provided in subsection (3) of section10-77-4404, except that all such documents, plans, and specifications11-included in the application which the city or village determine define or12-describe the project may be provided upon written request of any person13-who owns property in the applicable good life district.14-(10) After establishment of a good life district that exceeds one15-thousand acres in size, the good life district applicant may apply to the16-department to establish development and design standards for the good17-life district. Such standards may include, but are not limited to,18-standards for architectural design, landscape design, construction19-materials, and sustainability, but may not require property owners to20-utilize specific contractors, professionals, suppliers, or service21-providers. The department may approve the standards after holding a22-hearing after one hundred eighty days' notice to all property owners in23-the district if the department finds that the standards will ensure a24-comprehensive and cohesive character and aesthetic for development in the25-good life district, and that the standards will further the purposes of26-the Good Life Transformational Projects Act. The development and design27-standards must be commercially reasonable and consistent with terminology28-and accepted practices in the architecture industry, must not conflict29-with any building code or other similar law or regulation, and must not30-impose an undue burden on property owners in the district. If approved,31-LB650-2025-LB650-2025--81--the standards shall apply to all new construction inside of the good life1-district. Notwithstanding the foregoing, any such standards established2-by the department shall be in addition and supplemental to any local3-zoning, building code, comprehensive plan, or similar requirements of the4-city or village, which requirements of the city or village shall control5-to the extent of any conflict with any design standards established by6-the department. 7-(11) Demonstration of meeting the required new development costs for8-purposes of subdivision (2)(a) of this section may be established by9-evidence submitted by the good life district applicant, the city or10-village where the good life district is located, or any other person11-which submits satisfactory evidence to the department.12-Sec. 28. Section 77-6605, Revised Statutes Cumulative Supplement,13-2024, is amended to read: 14-77-6605 The director shall consider program certification15-applications under section 77-6604 in the order in which they are16-received. The director may accept program certification applications on a17-continuous basis or may establish, by rule and regulation, an annual18-program certification application deadline. The director may approve19-program certification applications for eligible businesses for a total of20-up to three million dollars in tax credits for calendar years 2022 and21-2023 and up to six million dollars in tax credits per calendar year for22-calendar years 2024 and 2025 beyond. Program certification applications23-approved after such annual limit has been reached shall be placed on a24-wait list in the order in which they are received.25-Sec. 29. Section 77-6607, Revised Statutes Cumulative Supplement,26-2024, is amended to read: 27-77-6607 (1) The tax credit under the Renewable Chemical Production28-Tax Credit Act shall be in an amount equal to the product of seven and29-one-half cents multiplied by the number of pounds of renewable chemicals30-produced in this state by the eligible business during each calendar year31-LB650-2025-LB650-2025--82--in excess of the eligible business's pre-eligibility production1-threshold. The maximum amount of tax credits that may be issued to an2-eligible business under a single tax credit application shall not exceed3-one million five hundred thousand dollars per year.4-(2) The tax credit shall be a refundable credit that may be used5-against any income tax imposed by the Nebraska Revenue Act of 1967. Any6-credit in excess of the eligible business's tax liability shall be7-refunded to the taxpayer. 8-(3) An eligible business shall not receive a tax credit for9-renewable chemicals produced before the date the business first qualified10-as an eligible business. 11-(4) The tax credit shall not be available for any renewable12-chemicals produced before the 2022 calendar year. 13-(5) Any tax credit allowable to a partnership, a limited liability14-company, a subchapter S corporation, or an estate or trust may be15-distributed to the partners, limited liability company members,16-shareholders, or beneficiaries in the same manner as income is17-distributed. 18-(6) An eligible business shall claim the tax credit by attaching the19-tax credit certification received from the department under section20-77-6606 to its tax return for the tax year in which the credit was21-approved. 22-(7) Tax credits shall not be available for taxable years beginning23-or deemed to begin on or after January 1, 2026. 24-Sec. 30. Section 77-6610, Revised Statutes Cumulative Supplement,25-2024, is amended to read: 26-77-6610 (1) On or before January 31, 2024, and on or before each27-January 31 , 2025 thereafter, the director and the Department of Revenue28-shall electronically submit a report on the Renewable Chemical Production29-Tax Credit Act to the Revenue Committee of the Legislature. At a minimum,30-the report shall include the following information regarding tax credits31-LB650-2025-LB650-2025--83--and the recipients of such credits: 1-(a) The aggregate number of pounds, and a list of each type, of2-renewable chemicals produced in Nebraska by all recipients (i) during the3-calendar year prior to the calendar year for which each recipient first4-received tax credits and (ii) for each calendar year thereafter;5-(b) The aggregate sales of all renewable chemicals produced by all6-recipients in each calendar year for which there are at least five7-recipients; 8-(c) The aggregate number of pounds, and a list of each type, of9-biomass feedstock used in the production of renewable chemicals in10-Nebraska by all recipients (i) during the calendar year prior to the11-calendar year for which each recipient first received tax credits and12-(ii) for each calendar year thereafter; 13-(d) The number of employees located in Nebraska of all recipients14-(i) during the calendar year prior to the calendar year for which each15-recipient first received tax credits and (ii) for each calendar year16-thereafter; 17-(e) The number and aggregate amount of tax credits issued for each18-calendar year; 19-(f) The number of eligible businesses placed on the wait list for20-each calendar year and the total number of eligible businesses remaining21-on the wait list at the end of that calendar year;22-(g) The dollar amount of tax credit claims placed on the wait list23-for each calendar year and the total dollar amount of tax credit claims24-remaining on the wait list at the end of that calendar year;25-(h) For each eligible business which received tax credits during26-each calendar year: (i) The identity of the eligible business; (ii) the27-amount of the tax credits; and (iii) the manner in which the eligible28-business first qualified as an eligible business, whether by organizing,29-expanding, or locating in the state; and 30-(i) The total amount of all tax credits claimed during each calendar31-LB650-2025-LB650-2025--84--year, and the portion issued as refunds. 1-(2) In order to protect the presumption of confidentiality provided2-for in section 77-6609, the director and Department of Revenue shall3-report all information in an aggregate form to prevent, to the extent4-reasonably possible, information being attributable to any particular5-eligible business, except as provided in subdivision (1)(h) of this6-section. 7-Sec. 31. Section 77-6919, Revised Statutes Cumulative Supplement,8-2024, is amended to read: 9-77-6919 (1) To earn the incentives set forth in the Urban10-Redevelopment Act, the taxpayer shall file an application for an11-agreement with the Director of Economic Development.12-(2) The application shall: 13-(a) Identify the taxpayer applying for incentives;14-(b) Identify the location or locations where the new investment and15-employment will occur, including documentation to show that each such16-location is a qualified location; 17-(c) State the estimated, projected amount of new investment and the18-estimated, projected number of new equivalent employees; and19-(d) Include an application fee of five hundred dollars. The fee20-shall be remitted to the State Treasurer for credit to the Nebraska21-Incentives Fund. 22-(3) Subject to the limit in subsection (4) of this section, the23-director shall approve the application and authorize the total amount of24-incentives expected to be earned if he or she is satisfied that the25-qualified location or locations meet the requirements established in26-section 77-6920 and such requirements will be reached within the required27-time period. 28-(4) The director shall not approve further applications once the29-expected incentives from the approved projects total eight million30-dollars. All but one hundred dollars of the application fee shall be31-LB650-2025-LB650-2025--85--refunded to the applicant if the application is not approved for any1-reason. 2-(5) Applications for incentives shall be considered in the order in3-which they are received. 4-(6) The director has ninety days to approve a complete application.5-(7) After approval, the taxpayer and the director shall enter into a6-written agreement. As part of such agreement, the taxpayer shall agree to7-increase the levels of employment and investment required by the act and8-the director, on behalf of the State of Nebraska, shall, in consideration9-of the taxpayer's agreement, agree to allow the taxpayer to use the10-incentives contained in the Urban Redevelopment Act up to the total11-amount that were authorized by the director at the time of approval. The12-application and all supporting documentation, to the extent approved,13-shall be considered a part of the agreement. The agreement shall state:14-(a) The levels of employment and investment required by the act for15-the project; 16-(b) The time period under the act in which the required levels must17-be met; 18-(c) The documentation the taxpayer will need to supply when claiming19-an incentive under the act; 20-(d) The date the application was filed; and 21-(e) The maximum amount of incentives authorized.22-(8) The application, the agreement, all supporting information, and23-all other information reported to the Director of Economic Development24-shall be kept confidential by the director, except for the name of the25-taxpayer, the location of the project, the estimated amounts of increased26-employment and investment stated in the application, the date of the27-complete application, the date the agreement was signed, and the28-information required to be reported by section 77-6928. The application,29-the agreement, and all supporting information shall be provided by the30-director to the Department of Revenue. The director shall disclose, to31-LB650-2025-LB650-2025--86--any municipalities in which project locations exist, the approval of an1-application and the execution of an agreement under this section. The Tax2-Commissioner shall also notify each municipality of the amount and3-taxpayer identity for each refund of local option sales and use taxes of4-the municipality within thirty days after the refund is allowed or5-approved. Disclosures shall be kept confidential by the municipality6-unless publicly disclosed previously by the taxpayer or by the State of7-Nebraska. 8-(9) There shall be no new applications for incentives filed under9-this section after the operative date of this section December 31, 2031.10-Sec. 32. Section 77-7012, Revised Statutes Cumulative Supplement,11-2024, is amended to read: 12-77-7012 (1) If the department determines that an application is13-complete and that the taxpayer qualifies for tax credits, the department14-shall approve the application within the limits set forth in this section15-and shall certify the amount of tax credits approved to the taxpayer.16-(2) The department may approve up to one million dollars in tax17-credits in fiscal year 2024-25 and each up to one million five hundred18-thousand dollars in tax credits in any fiscal year thereafter. If the19-total amount of tax credits requested in any fiscal year exceeds such20-limit, the department shall allocate the tax credits proportionally based21-upon amounts requested. 22-Sec. 33. Sections 4, 5, 6, 7, and 35 of this act become operative23-on January 1, 2026. The other sections of this act become operative on24-their effective date. 25-Sec. 34. Original section 13-3106, Reissue Revised Statutes of26-Nebraska, and sections 77-908, 77-2701.04, 77-2715.07, 77-2716, 77-2717,27-77-2733, 77-2734.03, 77-27,187.02, 77-27,188, 77-27,241, 77-3109,28-77-3110, 77-3111, 77-3120, 77-3125, 77-3126, 77-3136, 77-3143, 77-3152,29-77-3169, 77-3806, 77-4405, 77-6605, 77-6607, 77-6610, 77-6919, and30-77-7012, Revised Statutes Cumulative Supplement, 2024, are repealed.31-LB650-2025-LB650-2025--87--Sec. 35. Original sections 77-2701.16, 77-2703, 77-2704.36, and1-77-2708, Revised Statutes Cumulative Supplement, 2024, are repealed.2-Sec. 36. The following sections are outright repealed: Sections3-77-2701.56, 77-2706.02, 77-7017, 77-7018, 77-7019, 77-7020, 77-7021, and4-77-7022, Revised Statutes Cumulative Supplement, 2024.5-Sec. 37. Since an emergency exists, this act takes effect when6-passed and approved according to law. 7-LB650-2025-LB650-2025--88-+Date of Hearing: March 19, 2025++The following constitutes the reasons for this bill and the purposes which are sought to be+accomplished thereby:+To address the estimated budget shortfall, LB650 seeks to sunset several tax credits or income+reductions, remove some sales and use tax exemptions, and change how some out-of-state+income is classified for tax purposes. The impacted acts are the: Sports Arena Facility+Financing Assistance Act, Sustainable Aviation Fuel Tax Credit Act, Nebraska Revenue Act+of 1967, Relocation Incentive Act, Nebraska Advantage Rural Development Act, Creating+High Impact Economic Futures Act, Cast and Crew Nebraska Act, Nebraska Shortline Rail+Modernization Act, Nebraska Pregnancy Help Act, Reverse Osmosis System Tax Credit Act,+Renewable Chemical Production Tax Credit Act, Urban Redevelopment Act, and Nebraska+Biodiesel Tax Credit Act.++Principal Introducer: ________________________________+Senator R. Brad von Gillern+- 1 -
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