Nebraska Amends Sales Tax, Tax Credit, Property Tax Provisions

By James W. O’Brien

Three bills recently signed by Nebraska Governor Jim Pillen have made several minor amendments to the sales tax, tax credit and property tax laws. (L. 2025, L182, effective three calendar months after adjournment of the 2025 legislative session or as stated; L. 2025, L208, effective three calendar months after adjournment of the 2025 legislative session; L. 2025, L209, effective 02/26/2025.)

Sales tax changes.

L208 provides, for purposes of the Streamlined Sales and Use Tax Agreement (SSUTA), that the database that assigns zip codes will apply the lowest combined tax rate imposed in the 9-digit zip code area if the area includes more than one tax rate in any level of taxing jurisdictions, and the database will apply the highest combined tax rate imposed in the 5-digit zip code area if the area includes more than one tax rate in any level of taxing jurisdictions. The bill prohibits the sales tax collection fee for SSUTA model 1 sellers that use a certified service provider (CSP) to perform the seller’s sales and use tax functions because the CSP already receives compensation from the state through contract provisions with the Streamlined Sales Tax Governing Board. L208 also updates the ratification date for the SSUTA to December 31, 2024. Finally, the bill expands the state sales tax confidentiality requirements to “any other person” to mirror the state income tax confidentiality law requirements.

Tax credit changes.

L182 amends the Affordable Housing Tax Credit Act (AHTCA) to remove the definition of “qualified taxpayer” from the Act. The bill also adds a nonprofit corporation of the type listed in IRC § 501(c)(3) or IRC § 501(c)(4) to the definition of taxpayer under the AHTCA. L182 allows taxpayers to transfer, sell, or assign tax credits to another taxpayer. As a result, the notification requirements were amended to provide that for any tax year an ownership interest or the tax credits are transferred, sold, or assigned under Neb. Rev. Stat. 77-2503(3), the transferor must notify the Department of Revenue of the transfer, sale, or assignment and provide the tax identification number of the new owner or tax credit purchaser at least 30 days before the new owner or tax credit purchaser claims the tax credits. Finally, the bill allows a nonrefundable credit to a taxpayer if the Nebraska Investment Finance Authority determines that the project for which tax credits are sought is a qualified project.

Definition of “taxpayer” expanded: L182 expands the definition of “taxpayer” under the Child Care Tax Credit Act (CCTCA) to include insurance companies subject to the premium and retaliatory taxes, and financial institutions subject to the franchise tax. L208 adds that the Nebraska refundable income tax credit under the CCTCA is limited to only qualified resident individuals for all taxable years beginning on or after January 1, 2024.

Tax credit limits: L208 makes changes in prorating tax credit limits for the food donation and the biodiesel income tax credits. These credits originally were set up to allow donations through the entire year and required all donations to be prorated at the end of the year if the donations went above the donation cap. The new language states that no additional credits can be allowed after the credit limit is attained, and donations that exceed this limit on the day the limit is reached will be prorated.

Property tax changes.

L209 clarifies language for the scope of the property tax exemption regarding skilled nursing facilities, nursing facilities, and assisted-living facilities. The bill also provides that those assigned a total disability rating for compensation under federal law would receive 100% of the exempt amount as the exemption for their homestead under the Homestead Program.