LB1180 LB1180
2022 2022
LEGISLATURE OF NEBRASKA
ONE HUNDRED SEVENTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1180
Introduced by Groene, 42.
Read first time January 19, 2022
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend section
2 77-2715.03, Reissue Revised Statutes of Nebraska, and section
3 77-2716, Revised Statutes Supplement, 2021; to change individual
4 income tax brackets as prescribed; to harmonize provisions; and to
5 repeal the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-2715.03, Reissue Revised Statutes of Nebraska,
2 is amended to read:
3 77-2715.03 (1) For taxable years beginning or deemed to begin on or
4 after January 1, 2013, and before January 1, 2014, the following brackets
5 and rates are hereby established for the Nebraska individual income tax:
6 Individual Income Tax Brackets and Rates
7 Bracket Single Married, Head of Married, Estates Tax
8 Number Individuals Filing Household Filing and Rate
9 Jointly Separate Trusts
10 1 $0-2,399 $0-4,799 $0-4,499 $0-2,399 $0-499 2.46%
11 2 $2,400- $4,800- $4,500- $2,400- $500-
12 17,499 34,999 27,999 17,499 4,699 3.51%
13 3 $17,500- $35,000- $28,000- $17,500- $4,700-
14 26,999 53,999 39,999 26,999 15,149 5.01%
15 4 $27,000 $54,000 $40,000 $27,000 $15,150
16 and Over and Over and Over and Over and Over 6.84%
17 (2) For taxable years beginning or deemed to begin on or after
18 January 1, 2014, and before January 1, 2022, the following brackets and
19 rates are hereby established for the Nebraska individual income tax:
20 Individual Income Tax Brackets and Rates
21 Bracket Single Married, Head of Married, Estates Tax
22 Number Individuals Filing Household Filing and Rate
23 Jointly Separate Trusts
24 1 $0-2,999 $0-5,999 $0-5,599 $0-2,999 $0-499 2.46%
25 2 $3,000- $6,000- $5,600- $3,000- $500-
26 17,999 35,999 28,799 17,999 4,699 3.51%
27 3 $18,000- $36,000- $28,800- $18,000- $4,700-
28 28,999 57,999 42,999 28,999 15,149 5.01%
29 4 $29,000 $58,000 $43,000 $29,000 $15,150
30 and Over and Over and Over and Over and Over 6.84%
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1 (3)(a) For taxable years beginning or deemed to begin on or after
2 January 1, 2015, and before January 1, 2022, the minimum and maximum
3 dollar amounts for each income tax bracket provided in subsection (2) of
4 this section shall be adjusted for inflation by the percentage determined
5 under subdivision (3)(b) of this section. The rate applicable to any such
6 income tax bracket shall not be changed as part of any adjustment under
7 this subsection. The minimum and maximum dollar amounts for each income
8 tax bracket as adjusted shall be rounded to the nearest ten-dollar
9 amount. If the adjusted amount for any income tax bracket ends in a five,
10 it shall be rounded up to the nearest ten-dollar amount.
11 (b)(i) For taxable years beginning or deemed to begin on or after
12 January 1, 2015, and before January 1, 2018, the Tax Commissioner shall
13 adjust the income tax brackets in subsection (2) of this section by the
14 percentage determined pursuant to the provisions of section 1(f) of the
15 Internal Revenue Code of 1986, as it existed prior to December 22, 2017,
16 except that in section 1(f)(3)(B) of the code the year 2013 shall be
17 substituted for the year 1992. For 2015, the Tax Commissioner shall then
18 determine the percent change from the twelve months ending on August 31,
19 2013, to the twelve months ending on August 31, 2014, and in each
20 subsequent year, from the twelve months ending on August 31, 2013, to the
21 twelve months ending on August 31 of the year preceding the taxable year.
22 The Tax Commissioner shall prescribe new tax rate schedules that apply in
23 lieu of the schedules set forth in subsection (2) of this section.
24 (ii) For taxable years beginning or deemed to begin on or after
25 January 1, 2018, and before January 1, 2022, the Tax Commissioner shall
26 adjust the income tax brackets in subsection (2) of this section based on
27 the percentage change in the Consumer Price Index for All Urban Consumers
28 published by the federal Bureau of Labor Statistics from the twelve
29 months ending on August 31, 2016, to the twelve months ending on August
30 31 of the year preceding the taxable year. The Tax Commissioner shall
31 prescribe new tax rate schedules that apply in lieu of the schedules set
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1 forth in subsection (2) of this section.
2 (4) For taxable years beginning or deemed to begin on or after
3 January 1, 2022, the following brackets and rates are hereby established
4 for the Nebraska individual income tax:
5 Individual Income Tax Brackets and Rates
6 Bracket Single Married, Head of Married, Estates Tax
7 Number Individuals Filing Household Filing and Rate
8 Jointly Separate Trusts
9 1 $0-3,339 $0-6,659 $0-6,219 $0-3,339 $0-499 2.46%
10 2 $3,340- $6,660- $6,220- $3,340- $500-
11 19,989 39,989 31,989 19,989 4,699 3.51%
12 3 $19,990- $39,990- $31,990- $19,990- $4,700-
13 59,999 149,999 86,999 59,999 15,149 5.01%
14 4 $60,000 $150,000 $87,000 $60,000 $15,150
15 and Over and Over and Over and Over and Over 6.84%
16 (5)(a) For taxable years beginning or deemed to begin on or after
17 January 1, 2023, the minimum and maximum dollar amounts for each income
18 tax bracket provided in subsection (4) of this section shall be adjusted
19 for inflation by the percentage determined under subdivision (5)(b) of
20 this section. The rate applicable to any such income tax bracket shall
21 not be changed as part of any adjustment under this subsection. The
22 minimum and maximum dollar amounts for each income tax bracket as
23 adjusted shall be rounded to the nearest ten-dollar amount. If the
24 adjusted amount for any income tax bracket ends in a five, it shall be
25 rounded up to the nearest ten-dollar amount.
26 (b) The Tax Commissioner shall adjust the income tax brackets in
27 subsection (4) of this section based on the percentage change in the
28 Consumer Price Index for All Urban Consumers published by the federal
29 Bureau of Labor Statistics from the twelve months ending on August 31,
30 2021, to the twelve months ending on August 31 of the year preceding the
31 taxable year. The Tax Commissioner shall prescribe new tax rate schedules
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1 that apply in lieu of the schedules set forth in subsection (4) of this
2 section.
3 (6) (4) Whenever the tax brackets or tax rates are changed by the
4 Legislature, the Tax Commissioner shall update the tax rate schedules to
5 reflect the new tax brackets or tax rates and shall publish such updated
6 schedules.
7 (7) (5) The Tax Commissioner shall prepare, from the rate schedules,
8 tax tables which can be used by a majority of the taxpayers to determine
9 their Nebraska tax liability. The design of the tax tables shall be
10 determined by the Tax Commissioner. The size of the tax table brackets
11 may change as the level of income changes. The difference in tax between
12 two tax table brackets shall not exceed fifteen dollars. The Tax
13 Commissioner may build the personal exemption credit and standard
14 deduction amounts into the tax tables.
15 (8) (6) For taxable years beginning or deemed to begin on or after
16 January 1, 2013, the tax rate applied to other federal taxes included in
17 the computation of the Nebraska individual income tax shall be 29.6
18 percent.
19 (9) (7) The Tax Commissioner may require by rule and regulation that
20 all taxpayers shall use the tax tables if their income is less than the
21 maximum income included in the tax tables.
22 Sec. 2. Section 77-2716, Revised Statutes Supplement, 2021, is
23 amended to read:
24 77-2716 (1) The following adjustments to federal adjusted gross
25 income or, for corporations and fiduciaries, federal taxable income shall
26 be made for interest or dividends received:
27 (a)(i) There shall be subtracted interest or dividends received by
28 the owner of obligations of the United States and its territories and
29 possessions or of any authority, commission, or instrumentality of the
30 United States to the extent includable in gross income for federal income
31 tax purposes but exempt from state income taxes under the laws of the
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1 United States; and
2 (ii) There shall be subtracted interest received by the owner of
3 obligations of the State of Nebraska or its political subdivisions or
4 authorities which are Build America Bonds to the extent includable in
5 gross income for federal income tax purposes;
6 (b) There shall be subtracted that portion of the total dividends
7 and other income received from a regulated investment company which is
8 attributable to obligations described in subdivision (a) of this
9 subsection as reported to the recipient by the regulated investment
10 company;
11 (c) There shall be added interest or dividends received by the owner
12 of obligations of the District of Columbia, other states of the United
13 States, or their political subdivisions, authorities, commissions, or
14 instrumentalities to the extent excluded in the computation of gross
15 income for federal income tax purposes except that such interest or
16 dividends shall not be added if received by a corporation which is a
17 regulated investment company;
18 (d) There shall be added that portion of the total dividends and
19 other income received from a regulated investment company which is
20 attributable to obligations described in subdivision (c) of this
21 subsection and excluded for federal income tax purposes as reported to
22 the recipient by the regulated investment company; and
23 (e)(i) Any amount subtracted under this subsection shall be reduced
24 by any interest on indebtedness incurred to carry the obligations or
25 securities described in this subsection or the investment in the
26 regulated investment company and by any expenses incurred in the
27 production of interest or dividend income described in this subsection to
28 the extent that such expenses, including amortizable bond premiums, are
29 deductible in determining federal taxable income.
30 (ii) Any amount added under this subsection shall be reduced by any
31 expenses incurred in the production of such income to the extent
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1 disallowed in the computation of federal taxable income.
2 (2) There shall be allowed a net operating loss derived from or
3 connected with Nebraska sources computed under rules and regulations
4 adopted and promulgated by the Tax Commissioner consistent, to the extent
5 possible under the Nebraska Revenue Act of 1967, with the laws of the
6 United States. For a resident individual, estate, or trust, the net
7 operating loss computed on the federal income tax return shall be
8 adjusted by the modifications contained in this section. For a
9 nonresident individual, estate, or trust or for a partial-year resident
10 individual, the net operating loss computed on the federal return shall
11 be adjusted by the modifications contained in this section and any
12 carryovers or carrybacks shall be limited to the portion of the loss
13 derived from or connected with Nebraska sources.
14 (3) There shall be subtracted from federal adjusted gross income for
15 all taxable years beginning on or after January 1, 1987, the amount of
16 any state income tax refund to the extent such refund was deducted under
17 the Internal Revenue Code, was not allowed in the computation of the tax
18 due under the Nebraska Revenue Act of 1967, and is included in federal
19 adjusted gross income.
20 (4) Federal adjusted gross income, or, for a fiduciary, federal
21 taxable income shall be modified to exclude the portion of the income or
22 loss received from a small business corporation with an election in
23 effect under subchapter S of the Internal Revenue Code or from a limited
24 liability company organized pursuant to the Nebraska Uniform Limited
25 Liability Company Act that is not derived from or connected with Nebraska
26 sources as determined in section 77-2734.01.
27 (5) There shall be subtracted from federal adjusted gross income or,
28 for corporations and fiduciaries, federal taxable income dividends
29 received or deemed to be received from corporations which are not subject
30 to the Internal Revenue Code.
31 (6) There shall be subtracted from federal taxable income a portion
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1 of the income earned by a corporation subject to the Internal Revenue
2 Code of 1986 that is actually taxed by a foreign country or one of its
3 political subdivisions at a rate in excess of the maximum federal tax
4 rate for corporations. The taxpayer may make the computation for each
5 foreign country or for groups of foreign countries. The portion of the
6 taxes that may be deducted shall be computed in the following manner:
7 (a) The amount of federal taxable income from operations within a
8 foreign taxing jurisdiction shall be reduced by the amount of taxes
9 actually paid to the foreign jurisdiction that are not deductible solely
10 because the foreign tax credit was elected on the federal income tax
11 return;
12 (b) The amount of after-tax income shall be divided by one minus the
13 maximum tax rate for corporations in the Internal Revenue Code; and
14 (c) The result of the calculation in subdivision (b) of this
15 subsection shall be subtracted from the amount of federal taxable income
16 used in subdivision (a) of this subsection. The result of such
17 calculation, if greater than zero, shall be subtracted from federal
18 taxable income.
19 (7) Federal adjusted gross income shall be modified to exclude any
20 amount repaid by the taxpayer for which a reduction in federal tax is
21 allowed under section 1341(a)(5) of the Internal Revenue Code.
22 (8)(a) Federal adjusted gross income or, for corporations and
23 fiduciaries, federal taxable income shall be reduced, to the extent
24 included, by income from interest, earnings, and state contributions
25 received from the Nebraska educational savings plan trust created in
26 sections 85-1801 to 85-1817 and any account established under the
27 achieving a better life experience program as provided i