LB 208 — Change provisions relating to sales tax collection fees, confidentiality of sales tax information, the streamlined sales and use tax agreement, a sales tax database, and certain income tax credits

LB208 LB208 2025 LEGISLATURELEGISLATIVE OFBILL NEBRASKA208 ONEApproved HUNDREDby NINTHthe LEGISLATUREGovernor FIRSTFebruary SESSION25, LEGISLATIVE2025 BILL 208 FINAL READING   Introduced by von Gillern, 4.

Read  firstA timeBILL JanuaryFOR 14,AN 2025ACT Committee:relating to revenue and taxation;

Revenue A BILL FOR AN ACT relating to revenue and taxation;

Be it enacted by the people of the State of Nebraska, -1- LB208 LB208 2025 Section 1.

77-270877-2708 (1)(a) (1)(a) The sales and use taxes imposed by the Nebraska Revenue Act of 1967 shall be due and payable to the Tax Commissioner monthly on or before the twentieth day of the month next succeeding each monthly period unless otherwise provided pursuant to the Nebraska Revenue Act of 1967.

The Tax Commissioner may adopt and promulgate rules and regulations to allow annual, semiannual, or quarterly returns for any retailer making -2- LB208 LB208 2025 monthly remittances or payments of sales and use taxes by electronic funds transfer or for any retailer remitting tax to the state pursuant to the streamlined sales and use tax agreement.

If a taxpayer transfers, sells, assigns, or otherwise disposes of -3- LB208 LB208 2025 an account receivable, he or she shall be deemed to have received the full balance of the consideration for the original sale and shall be liable for the remittance of the sales tax on the balance of the total sale price not previously reported, except that such transfer, sale, -1- LB208 LB208 2025 assignment, or other disposition of an account receivable by a retailer to a subsidiary shall not be deemed to require the retailer to pay the sales tax on the credit sale represented by the account transferred prior to the time the customer makes payment on such account.

Failure to file the return, filing after the required filing date, failure to remit the net amount of the tax due, or remitting the net amount of the tax due after the required filing date shall be cause for a penalty, in addition to interest, of ten percent of the amount of tax not paid by the required filing date or twenty-fivetwenty- five dollars, whichever is greater, unless the penalty is being collected under subdivision (1)(i), (1)(j)(i), or (1)(k)(i) of section 77-2703 by a -4- LB208 LB208 2025 county treasurer or the Department of Motor Vehicles, in which case the penalty shall be five dollars.

This subdivision shall not apply if the multivendor marketplace platform and the seller are related persons under either section 267(b) or (c) or section 707(b) of the Internal Revenue Code of 1986 or if the seller is also the multivendor -5- LB208 LB208 2025 marketplace platform operator.

The claimant and the Tax Commissioner may also agree to extend the one-one-hundred-eighty-day hundred-eighty-day period.

If a hearing has not been requested and the -6- LB208 LB208 2025 Tax Commissioner has neither allowed nor disallowed a claim within either the one hundred eighty days or the period agreed to by the claimant and the Tax Commissioner, the claim shall be deemed -2- LB208 LB208 2025 to have been allowed.

(i) The Tax Commissioner may recover any refund or part thereof which is erroneously made and any credit or part thereof which is erroneously allowed by issuing a deficiency determination within one year -7- LB208 LB208 2025 from the date of refund or credit or within the period otherwise allowed for issuing a deficiency determination, whichever expires later.

(v) If filing responsibilities have been assumed by a certified -8- LB208 LB208 2025 service provider, the service provider may claim, on behalf of the retailer, any bad debt allowance provided by this section.

The Tax Commissioner shall then deduct such refund from the applicable tax proceeds in accordance with the selection when he or she deducts refunds pursuant to section 13-324, 13-2814, -3- LB208 LB208 2025 or 77-6403 or subsection (1) of section 77-27,144, whichever is applicable.

This subsection shall not -9- LB208 LB208 2025 apply to any refund that is subject to subdivision (2)(a) or (2)(b)(ii) or subsection (3) or (4) of section 77-27,144.

In the examination of any person selling property or of any person liable for the use tax, an inquiry shall be made as to the accuracy of the reporting of city and county sales and use taxes for which the person is liable -10- LB208 LB208 2025 under the Local Option Revenue Act or sections 13-319, 13-324, 13-2813, and 77-6403 and the accuracy of the allocation made between the various counties, cities, villages, and municipal counties of the tax due.

Nothing in this section shall be construed to prohibit (a) the delivery to a taxpayer, his or her duly authorized representative, or his or her successors, receivers, trustees, executors, administrators, assignees, or guarantors, if directly -11- LB208 LB208 2025 interested, of a certified copy of any return or report in connection with his or her tax, (b) the publication of statistics so classified as to prevent the identification of particular reports or returns and the items thereof, (c) the inspection by the Attorney General, other legal representative of the state, or county attorney of the reports or returns of any taxpayer when either (i) information on the reports or returns is considered by the Attorney General to be relevant to any action or proceeding instituted by the taxpayer or against whom an action or proceeding is being considered or has been commenced by any state agency or the county or (ii) the taxpayer has instituted an action to review the tax based thereon or an action or proceeding against the taxpayer for collection of tax or failure to comply with the Nebraska Revenue Act of 1967 is being considered or has been commenced, (d) the furnishing of any information to the United States Government or to states allowing similar privileges to the Tax Commissioner, (e) the disclosure of information and records to a collection agency contracting with the Tax Commissioner pursuant to sections 77-377.01 to 77-377.04, (f) the disclosure to another party to a transaction of information and records concerning the transaction between the taxpayer and the other party, (g) the disclosure of information pursuant to section 77-27,195, 77-5731, 77-6837, 77-6839, or 77-6928, or (h) the disclosure of information to the Department of Labor necessary for the administration of the Employment Security Law, the Contractor Registration Act, or the Employee Classification Act.

(8) Notwithstanding the provisions of subsection (7) of this section, the -4- LB208 LB208 2025 Tax Commissioner may permit the Postal Inspector of the United States Postal Service or his or her delegates to inspect the reports or returns of any person filed pursuant to the Nebraska Revenue Act of 1967 when information on the reports or returns is relevant to any action or proceeding instituted or being considered by the United States Postal Service against such person for the fraudulent use of the mails to carry and deliver false and fraudulent tax returns to the Tax -12- LB208 LB208 2025 Commissioner with the intent to defraud the State of Nebraska or to evade the payment of Nebraska state taxes.

-13- LB208 LB208 2025 Confidential tax returns and tax return information shall be audited only upon the premises of the Department of Revenue.

and (ii) Any part of any written determination or any background file -14- LB208 LB208 2025 document relating to such written determination;

(14)(a) Notwithstanding the provisions of subsection (7) of this section, -5- LB208 LB208 2025 the Tax Commissioner shall, upon written request, provide an individual certified under subdivision (b) of this subsection representing a municipality which has adopted the local option sales and use tax under the Local Option Revenue Act with confidential sales and use tax returns and sales and use tax return information regarding taxpayers that possess a sales tax permit and the amounts remitted by such permitholders at locations within the boundaries of the requesting municipality or with confidential business use tax returns and business use tax return information regarding taxpayers that file a Nebraska and Local Business Use Tax Return and the amounts remitted by such taxpayers at locations within the boundaries of the requesting municipality.

Any -15- LB208 LB208 2025 written request pursuant to this subsection shall provide the Department of Revenue with no less than ten business days to prepare the sales and use tax returns and sales and use tax return information requested.

(e) The Department of Revenue shall not be held liable by any person for an impermissible disclosure by a municipality or any agent or employee thereof of any information obtained pursuant to a review under -16- LB208 LB208 2025 this subsection.

(ii) Personally identifiable information is only used and retained to the extent necessary for the administration of model 1 with respect to -17- LB208 LB208 2025 exempt purchasers;

(e) The state shall provide public notification to consumers, including -6- LB208 LB208 2025 exempt purchasers, of the state's practices relating to the collection, use, and retention of personally identifiable information.

(h) If anyone other than a member state, or a person authorized by that state's law or the agreement, seeks to discover personally identifiable information, the state from whom the information is sought should make a reasonable and timely effort to notify the individual of -18- LB208 LB208 2025 such request.

In furtherance of the agreement, the Department of Revenue is authorized to act jointly with other states that are members under Articles VII or VIII of the agreement to establish standards for certification of a certified service provider and certified automated system and establish performance -19- LB208 LB208 2025 standards for multistate sellers.

77-2715.0777-2715.07 (1) (1) There shall be allowed to qualified resident individuals as a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967:

(a) For returns filed reporting federal adjusted gross incomes of greater than twenty-nine thousand dollars, a nonrefundable credit equal -20- LB208 LB208 2025 to twenty-five percent of the federal credit allowed under section 21 of the Internal Revenue Code of 1986, as amended, except that for taxable years beginning or deemed to begin on or after January 1, 2015, such nonrefundable credit shall be allowed only if the individual would have received the federal credit allowed under section 21 of the code after adding back in any carryforward of a net operating loss that was deducted pursuant to such section in determining eligibility for the federal credit;

(b) For returns filed reporting federal adjusted gross income of twenty-ninetwenty- nine thousand dollars or less, a refundable credit equal to a percentage of the federal credit allowable under section 21 of the Internal Revenue Code of 1986, as amended, whether or not the federal credit was limited by the federal tax liability.

The percentage of the federal credit shall be one hundred percent -7- LB208 LB208 2025 for incomes not greater than twenty-two thousand dollars, and the percentage shall be reduced by ten percent for each one thousand dollars, or fraction thereof, by which the reported federal adjusted gross income exceeds twenty-two thousand dollars, except that for taxable years beginning or deemed to begin on or after January 1, 2015, such refundable credit shall be allowed only if the individual would have received the federal credit allowed under section 21 of the code after adding back in any carryforward of a net operating loss that was deducted pursuant to such section in determining eligibility for the federal credit;

(d) A refundable credit for individuals who qualify for an income tax credit under the Angel Investment Tax Credit Act, the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research -21- LB208 LB208 2025 and Development Act, the Reverse Osmosis System Tax Credit Act, or the Volunteer Emergency Responders Incentive Act;

-22- LB208 LB208 2025 (e) A credit as provided in the Nebraska Job Creation and Mainstreet Revitalization Act;

-23- LB208 LB208 2025 (5)(a) For all taxable years beginning on or after January 1, 2007, and before January 1, 2009, under the Internal Revenue Code of 1986, as amended, there shall be allowed to each partner, shareholder, member, or beneficiary of a partnership, subchapter S corporation, limited liability company, or estate or trust a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the partner's, shareholder's, member's, or beneficiary's portion of the amount of franchise tax paid to the state under sections 77-3801 to 77-3807 by a financial institution.

(b) For all taxable years beginning on or after January 1, 2009, under the Internal Revenue Code of 1986, as amended, there shall be allowed to each partner, shareholder, member, or beneficiary of a partnership, subchapter S corporation, limited liability company, or estate or trust a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967 equal -8- LB208 LB208 2025 to the partner's, shareholder's, member's, or beneficiary's portion of the amount of franchise tax paid to the state under sections 77-3801 to 77-3807 by a financial institution.

(7)(a) For taxable years beginning or deemed to begin on or after January 1, 2020, and before January 1, 2026, under the Internal Revenue Code of 1986, as amended, a nonrefundable credit against the income tax -24- LB208 LB208 2025 imposed by the Nebraska Revenue Act of 1967 in the amount of five thousand dollars shall be allowed to any individual who purchases a residence during the taxable year if such residence:

(9)(a) For taxable years beginning or deemed to begin on or after January 1, 2022, under the Internal Revenue Code of 1986, as amended, a refundable credit against the income tax imposed by the Nebraska Revenue -25- LB208 LB208 2025 Act of 1967 shall be allowed to the parent of a stillborn child if:

For ordinances passed after October 1, 1969, the effective date shall be -26- LB208 LB208 2025 the first day of the next calendar quarter which is at least one hundred twenty days following receipt by the Tax Commissioner of the certified copy of the ordinance.

The -9- LB208 LB208 2025 incorporated municipality shall furnish a certified statement to the Tax Commissioner no more than one hundred eighty days and at least one hundred twenty days prior to the termination date that the termination date stated in the ordinance is still valid.

(5) The state shall provide and maintain a database of all sales and -27- LB208 LB208 2025 use tax rates for all of the local jurisdictions levying taxes within the state.