LB 613 — Change provisions relating to the disclosure of tax information to municipalities

LB613 LB613 2025 LEGISLATURELEGISLATIVE OFBILL NEBRASKA613 ONEApproved HUNDREDby NINTHthe LEGISLATUREGovernor FIRSTJune SESSION4, LEGISLATIVE2025 BILL 613 FINAL READING   Introduced by Andersen, 49;

Read  firstA timeBILL JanuaryFOR 22,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- LB613 LB613 2025 Section 1.

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 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 -2- LB613 LB613 2025 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 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 -3- LB613 LB613 2025 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 -1- LB613 LB613 2025 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.

-4- LB613 LB613 2025 (9) Notwithstanding the provisions of subsection (7) of this section, the Tax Commissioner may permit other tax officials of this state to inspect the tax returns, reports, and applications filed under sections 77-2701.04 to 77-2713, but such inspection shall be permitted only for purposes of enforcing a tax law and only to the extent and under the conditions prescribed by the rules and regulations of the Tax Commissioner.

All audit work papers -5- LB613 LB613 2025 pertaining to the audit of the Department of Revenue shall be stored in a secure place in the Department of Revenue.

and (c) Tax return or return means any tax or information return or -6- LB613 LB613 2025 claim for refund required by, provided for, or permitted under sections 77-2701 to 77-2713 which is filed with the Tax Commissioner by, on behalf of, or with respect to any person and any amendment or supplement thereto, including -2- LB613 LB613 2025 supporting schedules, attachments, or lists which are supplemental to or part of the filed return.

(14)(a) Notwithstanding the provisions of subsection (7) of this section, 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 -7- LB613 LB613 2025 at locations within the boundaries of the requesting municipality.

An No individual certified by a municipality pursuant to subdivision (b) of this subsection shall not disclose to any person any information obtained pursuant to a review under this subsection other -8- LB613 LB613 2025 than for the purposes described in this subsection.

-9-With very -3- LB613 LB613 2025 With very limited exceptions, a certified service provider shall perform its tax calculation, remittance, and reporting functions without retaining the personally identifiable information of consumers.

(f) When any personally identifiable information that has been collected and retained is no longer required for the purposes set forth -10- LB613 LB613 2025 in subdivision (16)(d)(iv) of this section, such information shall no longer be retained by the member states.

77-27,144 (1) The Tax Commissioner shall collect the tax imposed by -11- LB613 LB613 2025 any incorporated municipality concurrently with collection of a state tax in the same manner as the state tax is collected.

On or before March 1, 2023, and on or before March 1 of each year -4- LB613 LB613 2025 thereafter, the Department of Revenue shall notify each city of the metropolitan class and city of the primary class of the total amount of such refunds that are estimated to be paid during the following calendar year.

Such estimated amount shall be used to establish the total -12- LB613 LB613 2025 amount to be deducted in the following calendar year.

This subsection applies to total annual refunds exceeding one million dollars or twenty-twenty-five five percent of the municipality's total sales and use tax receipts for the prior fiscal year, whichever is the lesser amount.

The department shall deduct the refund over a period of one year in equal monthly -13- LB613 LB613 2025 amounts beginning in January following the notification.

This subsection applies to total annual refunds exceeding one million dollars or twenty-twenty-five five percent of the municipality's total sales and use tax receipts for the prior fiscal year, whichever is the lesser amount.

Such information shall be kept confidential by the municipality unless -14- LB613 LB613 2025 publicly disclosed previously by the taxpayer or by the State of Nebraska.

77-5725 (1) Applicants may qualify for benefits under the Nebraska -5- LB613 LB613 2025 Advantage Act in one of six tiers:

Agreements may -15- LB613 LB613 2025 be executed with regard to completed project applications filed on or before December 31, 2020.

All project agreements pending, approved, or -16- LB613 LB613 2025 entered into before such date shall continue in full force and effect;

(2) When the taxpayer has met the required levels of employment and investment contained in the agreement for a tier 1, tier 2, tier 4, tier 5, or tier 6 project, the taxpayer shall be entitled to the following -17- LB613 LB613 2025 incentives:

(iv) Tangible personal property by a contractor or repairperson after appointment as a purchasing agent of the taxpayer when such property is annexed -6- LB613 LB613 2025 to, but not incorporated into, real estate as a part of a project.

and -18- LB613 LB613 2025 (b)(i) A refund of all sales and use taxes for a tier 2, tier 4, tier 5, or tier 6 project, excluding the tier 2 and tier 5 projects described in subdivision (2)(b)(ii) of this section, or a refund of one-one-half half of all sales and use taxes for a tier 1 project paid under the Local Option Revenue Act, the Nebraska Revenue Act of 1967, and sections 13-319, 13-324, 13-2813, and 77-6403 on the types of purchases, including rentals, listed in subdivision (a) of this subsection for such taxes paid during each year of the entitlement period in which the taxpayer is at or above the required levels of employment and investment;

(3) For agreements involving a tier 2 large data center project or a tier 5 project that is sequential to a tier 2 large data center project:

For any taxpayer who is issued a direct payment permit, until such taxpayer meets the required levels of employment and investment contained in the agreement, the taxpayer must pay and remit any applicable sales and use taxes as required by the Tax -19- LB613 LB613 2025 Commissioner.

(a) Average annual wage means the total compensation paid to employees during the year at the project who are not base-year employees -20- LB613 LB613 2025 and who are paid wages equal to at least sixty percent of the Nebraska average weekly wage for the year of application, excluding any compensation in excess of one million dollars paid to any one employee during the year, divided by the number of equivalent employees making up such total compensation;

-7- LB613 LB613 2025 (6) Any taxpayer who has met the required levels of employment and investment for a tier 2 or tier 4 project shall receive a credit equal to ten percent of the investment made in qualified property at the project.

-21- LB613 LB613 2025 (8) The credit prescribed in subsection (6) of this section shall also be allowable during the first year of the entitlement period for investment in qualified property at the project after the date of the application and before the required levels of employment and investment were met.

A taxpayer who has met the required levels of employment and investment for a tier 6 project shall receive the exemption of property in subdivisions (9)(c)(9)(c)(ii), (ii), (iii), (iv), and (v) of this section.

Such property shall be eligible for the exemption from the first January 1 following the end of the year during which the required levels were exceeded through the ninth December 31 after the first year property included in subdivisions (9)(c)(9)(c)(ii), (ii), (iii), (iv), and (v) of this section qualifies for the exemption.

(iii) A taxpayer who has filed an application that describes a tier 2 large data center project or a tier 5 project that is sequential to a tier 2 large data center project for which the entitlement period has -22- LB613 LB613 2025 expired shall receive the exemption of all property in subdivision (9)(c) of this section beginning any January 1 after the date the property was placed in service.

(iv) A taxpayer who has a project for an Internet web portal or a data center and who has met the required levels of employment and investment for a tier 2 project or the required level of investment for a tier 5 project, taking into account only the employment and investment at the web portal or data center project, shall receive the exemption of property in subdivision (9)(c)(ii)(9)(c) (ii) of this section.

(ii) Computer systems, made up of equipment that is interconnected in order to enable the acquisition, storage, manipulation, management, movement, control, display, transmission, or reception of data involving computer software and hardware, used for business information processing -23- LB613 LB613 2025 which require environmental controls of temperature and power and which are capable of simultaneously supporting more than one transaction and more than one user.

-8- LB613 LB613 2025 (iv) Personal property which is business equipment located in a single project if the business equipment is involved directly in the manufacture or processing of agricultural products;

(10)(a) The investment thresholds in this section for a particular year of application shall be adjusted by the method provided in this subsection, except that the investment threshold for a tier 5 project -24- LB613 LB613 2025 described in subdivision (1)(e)(ii)(1) (e)(ii) of this section shall not be adjusted.

(f) The investment thresholds established by this subsection apply for purposes of project qualifications for all applications filed on or -25- LB613 LB613 2025 after January 1 of the following year for all years of the project.

-26--9-