760 - Increased the corporate income tax thresholds and the higher
rate. Prior to LB 760,
corporate income tax rates were 25% of the individual rate, or 3.75%
at that time on the first $25,000 of taxable income and 27.5% (4.05%)
on income greater than $25,000. After LB 760, the rates were 25%
of the individual rate on the first $50,000 of taxable income and
35% (5.25%) on amounts more than $50,000. It was expected that the
increase would generate an additional $13 million in revenue
- LB 169 - Provided that the Legislature is to set the sales and
income tax rates, beginning Jan. 1, 1984. Prior to this time,
the State Board of Equalization set the sales and income tax rates
on or before each Nov. 15 so that revenue would
be sufficient to fund the enacted budget and so that the two
raised similar amounts for the General Fund.
- LB 1124 - Adopted provisions changing the apportionment of
the income of a multi-state, unitary business in accordance with
the provisions of the Uniform Distribution of Income for Tax Purposes
Act (UDITPA) from worldwide to nationwide combined reporting. Included
in the statutes both before and after LB 1124 were an equally-weighted
three-factor apportionment formula and a throw back rule.
to a Nebraska Supreme Court case involving Kelloggs, income was
apportioned on a worldwide basis with the worldwide income being
calculated on sales, property and payroll in the state compared
to all sales, payroll and property worldwide. In the case the
Nebraska Supreme Court held that Nebraska could not tax the net
income of foreign subsidiaries, but allowed the company to apportion
domestic income while factoring in the sales, payroll and property
of those foreign subsidiaries. The bill was adopted in response
to this case and was designed to retain $10 - $20 million annually
of income tax revenue that would otherwise have been lost.
LB 1124 the unitary income of any corporation and its subsidiaries
was divided, or apportioned to the states where the company does
business based on the amount or sales in the state compared to
the amount of sales in the U.S., the amount of payroll in the
state as compared to the nationwide payroll, and the value of
the property located in the state as compared to the value of
all property in the U.S. A unitary business is any business that
is conducted as a single economic unit whether conducted by one
or many separate corporations, that has common ownership.
- LB 282 - Struck the requirement that the Legislature set
the sales and income tax rates so as to generate similar amounts
of money for the General Fund and the requirement that income tax
rates be changed in increments of one percent and sales tax rates
in increments of one-half percent.
344 - Repealed Nebraska's participation in the Multistate Tax
- LB 774 - Enacted the Financial Institutions Deposit Tax in
lieu of imposing the income tax on banks and other savings institutions.
Problems had arisen because states are prohibited from taxing earnings
attributable to United States securities. First, such earnings were
excluded from the tax base. This reform instead taxed deposits at
a rate pegged to the income tax rate, the tax not to exceed an amount
of tax based on net income.
1124 - Enacted the Employment Expansion and Investment
Incentive Act. This act grants incentives to businesses
that increase employment
by two employees and invest at least $75,000. The incentives
are $1,500 for each new employee and $1000 for each $75,000
In 2000, total credits claimed under the Act (as amended by
LB 270 (1987)) were $4.5 million.
- LB 772 - Phased in sales only apportionment of the unitary
income of multi-state corporations for corporate income tax purposes.
Prior to LB 772, the unitary income of multi-state corporations
was apportioned to Nebraska based on three, equally weighted factors,
the property in the state, the payroll in the state and the sales
in the state. LB 772 shifted the weighting by 20% each of the five
succeeding years so that by 1992, sales in the state was the only
determining factor. The reduction in revenue was estimated to be
$7 million when fully implemented.
775 - Enacted the Employment and Investment Growth Act. This grants
income tax credits, and sales tax refunds for companies that hire
at least 30 new employees and invest at least $3 million. The
income tax credits are equal to 5% of the increased payroll at
the project for five years and 10% of the investment in the project.
The benefits also include a refund of any sales taxes paid on
equipment or other taxable property purchased in connection with
the project. LB 775 also repealed the two-year-old sales tax refund
for purchases of industrial machinery and equipment for plant
expansions. For projects promising at least $10 million in new
investment and 100 new employees, qualifying companies may also
receive a 15 year personal property tax exemption for mainframe
computers, certain aircraft, and agricultural processing equipment
used in connection with the project. For 2000, the cost of the
program is estimated to be between $30 to $150 million depending
on the percentage of the jobs claimed that can be assumed to have
been in the state regardless of the credit.
- LB 1059 - Increased the sales tax rate from 4% to
5% and the income tax rates by 8.5% for 1990 and an additional
1991 to fund the Tax Equity and Educational Support Act. This
school finance legislation dramatically increased state aid distributed
to schools in an "equalized" manner. School costs were
calculated per student within nine "tiers" or groups
of similarly-sized schools and the formula enabled each school
to finance the average cost per student for the tier with a combination
of state aid and property taxes at a defined "local effort
rate". The rate varied based on the amount of appropriation
available. LB 1059 also "rebated" 20% of the income
tax paid by residents of the school district to the district.
cost when fully implemented was about $210 million.
- LB 829 - Exempted all personal property from the property tax
for 1991 only and reimbursed local governments for the loss using
a series of revenue-raising proposals including a depreciation surcharge,
a corporate income tax surcharge, a temporary reduction in the sales
tax collection fee, extending the sales tax to manufacturing energy,
and a one-year increase in the corporate occupation tax.. The total
cost was $120 million.
- LB 1240 - Enacted the Enterprise Zone Act. This act grants larger
investment tax credits under the Employment Expansion and Investment
Incentive Act for projects located in five designated areas in the
state. Jobs credits available under the act are also larger if the
project employs residents of the enterprise zone.
- LB 559 - Provided for the phase out of the throw back rule
for apportioning corporate income for tax purposes over three years.
From 1998 forward, sales of a multistate corporation shipped from
Nebraska to a customer in another state where the company has no
nexus (and therefore cannot be taxed by that state) are no longer
considered Nebraska sales for purposes of apportioning multistate
income. Cost $2.6 million.
829 - Adopted the Quality Jobs Act. This act allows companies
the promise to increase employment and investment by either
$50 million in investment and 500 new jobs, or (2) $100 million
in investment and 250 new jobs to retain the withholding of
up to 5% of the increased payroll, such withholding to be spent
on employee benefit programs. The act terminated in 2000.
- LB 1368 - Amended the Quality Jobs Act by providing for an alternate
method for claiming the wage benefit credit allowed by the act.
The alternative is a sliding scale corporate income tax credit depending
on the average wage of the new jobs.
- LB 936 - Enacted the Rural Economic Opportunities Act. The
act provides credits against income tax for businesses that (1)
increase employment by at least 0.5% of the labor force in the county
and pay at least 125% of the average wage in the county or 100%
of the average wage in the region and (2) invest an amount of at
least $50,000 times the required number of new employees if the
county has a population of 300 or less or $100,000 times the required
number of new employees in larger counties. The credits are 5% of
the increased payroll at the project and 10% of the investment.
- LB 433 - Granted an income tax credit to businesses equal
to 30% of the subsidized costs of providing child care services
to its employees. The credit is generally available for three years
and cannot exceed 50% of the firm's tax liability. During the special
session of 2001, the operative provisions of the act were delayed
620 - Adopted the Invest Nebraska Act to replace the expired Quality
Jobs Act. Essentially, the benefits are like the Quality Jobs
Act provisions that grant a sliding scale credit of 3% of the
increased payroll at the project to 5% based on the average wage
at the project. This credit may be taken against the withholding
obligation of the employer. There is also a smaller qualification
threshold of $10 million in investment and 25 new employees in
counties with a population of 100,000 or less. In this level of
qualification, the jobs must pay at least the average annual wage
in the state. For those companies qualifying with the old Quality
Jobs Act thresholds, the jobs must pay at least 110% of the state's
average wage. Finally, a "super tier" level of qualification
is provided for companies promising to invest at least $200 million
and employ at least 500 new employees at least 120% of the state's
average wage. Such qualifiers receive either the wage benefit
credit allowed the other qualifiers or a 15% investment credit.
2003 – LB
596 – This
bill requires that taxpayers add back to federal adjusted gross
income or for corporations, federal
taxable income, the amount of any additional bonus depreciation or
any section 179 capital expensing that is in excess of $25,000 that
is allowed because of the federal Jobs and Growth Tax Act of 2003.
It also placed the 2003 federal standard deduction amounts in the
Nebraska statute and provided that they be adjusted for inflation
in future years.
2005 - LB
28 - Created a new tax credit for planned contributions
into certain trusts or direct contributions made by corporations.
A resident individual or a pass-through entity is allowed an income
tax credit equal to 30% of the present value of a planned gift
in the year the planned gift is made to a trust for the benefit of
501(c)(3) organization, not to exceed tax liability or $10,000.
For a C-corporation,
the credit is 20% of a direct contribution to the 501(c)(3) organization,
limited to $10,000. Individuals,
entities and corporations may not receive a credit for any contribution
that was deducted for income tax purposes. An individual contribution
may be a planned gift, but a corporate contribution must be an
actual gift to the foundation to be eligible for the credit.
LB 312 - In
addition to sunsetting the Employment and Investment Growth Act
and replacing it with the Nebraska Advantage Act, LB 312 exempted
manufacturing machinery and equipment from the sales tax. The bill
defined "manufacturing machinery and equipment" very
broadly to include:
used by the manufacturer for transporting raw materials or components
like assembly lines or mill rolls,
- molds and
dies for forming cast or injected products and its packaging
to maintain the integrity of the product or environmental conditions,
such as climate control or clean room equipment,
equipment for quality control,
that control a manufacturing process,
used to produce power or energy, such as steam turbines, or catalysts,
solvents, and other solutions even if they do not become part
of the finished product, and
- repair or
replacement parts purchased for repairing or maintaining manufacturing
machinery, such as refractory brick.
also includes all repair and service performed on such equipment
from sales taxes.