LB239 LB239
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 239
Introduced by Wayne, 13.
Read first time January 10, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2715.03 and 77-2716, Revised Statutes Cumulative Supplement,
3 2022; to change individual income tax brackets and rates as
4 prescribed; to harmonize provisions; and to repeal the original
5 sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-2715.03, Revised Statutes Cumulative
2 Supplement, 2022, 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, 2024, 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 Top Rate
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1 For purposes of this subsection, the top rate shall be:
2 (a) 6.84% for taxable years beginning or deemed to begin on or after
3 January 1, 2014, and before January 1, 2023; and
4 (b) 6.64% for taxable years beginning or deemed to begin on or after
5 January 1, 2023, and before January 1, 2024. ;
6 (3) For taxable years beginning or deemed to begin on or after
7 January 1, 2024, the following brackets and rates are hereby established
8 for the Nebraska individual income tax:
9 Individual Income Tax Brackets and Rates
10 Bracket Single Married, Head of Married, Estates Tax
11 Number Individuals Filing Household Filing and Rate
12 Jointly Separate Trusts
13 1 $0-27,499 $0-54,999 $0-54,999 $0-27,499 $0-54,999 0.00%
14 2 $27,500- $55,000- $55,000- $27,500- $55,000- 2.46%
15 30,499 60,999 60,599 30,499 55,499
16 3 $30,500- $61,000- $60,600- $30,500- $55,500- 3.51%
17 45,499 90,999 83,799 45,499 59,699
18 4 $45,500- $91,000- $83,800- $45,500- $59,700- 5.01%
19 56,499 112,999 97,999 56,499 70,149
20 5 $56,500 $113,000 $98,000 $56,500 $70,150
21 and Over and Over and Over and Over and Over Top Rate
22 For purposes of this subsection, the top rate shall be:
23 (a) (c) 6.44% for taxable years beginning or deemed to begin on or
24 after January 1, 2024, and before January 1, 2025;
25 (b) (d) 6.24% for taxable years beginning or deemed to begin on or
26 after January 1, 2025, and before January 1, 2026;
27 (c) (e) 6.00% for taxable years beginning or deemed to begin on or
28 after January 1, 2026, and before January 1, 2027; and
29 (d) (f) 5.84% for taxable years beginning or deemed to begin on or
30 after January 1, 2027.
31 (4)(a) (3)(a) For taxable years beginning or deemed to begin on or
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1 after January 1, 2015, the minimum and maximum dollar amounts for the
2 each income tax brackets bracket provided in subsections subsection (2)
3 and (3) of this section shall be adjusted for inflation as provided in by
4 the percentage determined under subdivision (3)(b) of this section. The
5 rate applicable to any such income tax bracket shall not be changed as
6 part of any adjustment under this subsection. The minimum and maximum
7 dollar amounts for each income tax bracket as adjusted shall be rounded
8 to the nearest ten-dollar amount. If the adjusted amount for any income
9 tax bracket ends in a five, it shall be rounded up to the nearest ten-
10 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, 2024, 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 (iii) For taxable years beginning or deemed to begin on or after
3 January 1, 2025, the Tax Commissioner shall adjust the income tax
4 brackets in subsection (3) of this section based on the percentage change
5 in the Consumer Price Index for All Urban Consumers published by the
6 federal Bureau of Labor Statistics from the twelve months ending on
7 August 31, 2023, to the twelve months ending on August 31 of the year
8 preceding the taxable year. The Tax Commissioner shall prescribe new tax
9 rate schedules that apply in lieu of the schedules set forth in
10 subsection (3) of this section.
11 (5) (4) Whenever the tax brackets or tax rates are changed by the
12 Legislature, the Tax Commissioner shall update the tax rate schedules to
13 reflect the new tax brackets or tax rates and shall publish such updated
14 schedules.
15 (6) (5) The Tax Commissioner shall prepare, from the rate schedules,
16 tax tables which can be used by a majority of the taxpayers to determine
17 their Nebraska tax liability. The design of the tax tables shall be
18 determined by the Tax Commissioner. The size of the tax table brackets
19 may change as the level of income changes. The difference in tax between
20 two tax table brackets shall not exceed fifteen dollars. The Tax
21 Commissioner may build the personal exemption credit and standard
22 deduction amounts into the tax tables.
23 (7) (6) For taxable years beginning or deemed to begin on or after
24 January 1, 2013, the tax rate applied to other federal taxes included in
25 the computation of the Nebraska individual income tax shall be 29.6
26 percent.
27 (8) (7) The Tax Commissioner may require by rule and regulation that
28 all taxpayers shall use the tax tables if their income is less than the
29 maximum income included in the tax tables.
30 Sec. 2. Section 77-2716, Revised Statutes Cumulative Supplement,
31 2022, is amended to read:
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1 77-2716 (1) The following adjustments to federal adjusted gross
2 income or, for corporations and fiduciaries, federal taxable income shall
3 be made for interest or dividends received:
4 (a)(i) There shall be subtracted interest or dividends received by
5 the owner of obligations of the United States and its territories and
6 possessions or of any authority, commission, or instrumentality of the
7 United States to the extent includable in gross income for federal income
8 tax purposes but exempt from state income taxes under the laws of the
9 United States; and
10 (ii) There shall be subtracted interest received by the owner of
11 obligations of the State of Nebraska or its political subdivisions or
12 authorities which are Build America Bonds to the extent includable in
13 gross income for federal income tax purposes;
14 (b) There shall be subtracted that portion of the total dividends
15 and other income received from a regulated investment company which is
16 attributable to obligations described in subdivision (a) of this
17 subsection as reported to the recipient by the regulated investment
18 company;
19 (c) There shall be added interest or dividends received by the owner
20 of obligations of the District of Columbia, other states of the United
21 States, or their political subdivisions, authorities, commissions, or
22 instrumentalities to the extent excluded in the computation of gross
23 income for federal income tax purposes except that such interest or
24 dividends shall not be added if received by a corporation which is a
25 regulated investment company;
26 (d) There shall be added that portion of the total dividends and
27 other income received from a regulated investment company which is
28 attributable to obligations described in subdivision (c) of this
29 subsection and excluded for federal income tax purposes as reported to
30 the recipient by the regulated investment company; and
31 (e)(i) Any amount subtracted under this subsection shall be reduced
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1 by any interest on indebtedness incurred to carry the obligations or
2 securities described in this subsection or the investment in the
3 regulated investment company and by any expenses incurred in the
4 production of interest or dividend income described in this subsection to
5 the extent that such expenses, including amortizable bond premiums, are
6 deductible in determining federal taxable income.
7 (ii) Any amount added under this subsection shall be reduced by any
8 expenses incurred in the production of such income to the extent
9 disallowed in the computation of federal taxable income.
10 (2) There shall be allowed a net operating loss derived from or
11 connected with Nebraska sources computed under rules and regulations
12 adopted and promulgated by the Tax Commissioner consistent, to the extent
13 possible under the Nebraska Revenue Act of 1967, with the laws of the
14 United States. For a resident individual, estate, or trust, the net
15 operating loss computed on the federal income tax return shall be
16 adjusted by the modifications contained in this section. For a
17 nonresident individual, estate, or trust or for a partial-year resident
18 individual, the net operating loss computed on the federal return shall
19 be adjusted by the modifications contained in this section and any
20 carryovers or carrybacks shall be limited to the portion of the loss
21 derived from or connected with Nebraska sources.
22 (3) There shall be subtracted from federal adjusted gross income for
23 all taxable years beginning on or after January 1, 1987, the amount of
24 any state income tax refund to the extent such refund was deducted under
25 the Internal Revenue Code, was not allowed in the computation of the tax
26 due under the Nebraska Revenue Act of 1967, and is included in federal
27 adjusted gross income.
28 (4) Federal adjusted gross income, or, for a fiduciary, federal
29 taxable income shall be modified to exclude the portion of the income or
30 loss received from a small business corporation with an election in
31 effect under subchapter S of the Internal Revenue Code or from a limited
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1 liability company organized pursuant to the Nebraska Uniform Limited
2 Liability Company Act that is not derived from or connected with Nebraska
3 sources as determined in section 77-2734.01.
4 (5) There shall be subtracted from federal adjusted gross income or,
5 for corporations and fiduciaries, federal taxable income dividends
6 received or deemed to be received from corporations which are not subject
7 to the Internal Revenue Code.
8 (6) There shall be subtracted from federal taxable income a portion
9 of the income earned by a corporation subject to the Internal Revenue
10 Code of 1986 that is actually taxed by a foreign country or one of its
11 political subdivisions at a rate in excess of the maximum federal tax
12 rate for corporations. The taxpayer may make the computation for each
13 foreign country or for groups of foreign countries. The portion of the
14 taxes that may be deducted shall be computed in the following manner:
15 (a) The amount of federal taxable income from operations within a
16 foreign taxing jurisdiction shall be reduced by the amount of taxes
17 actually paid to the foreign jurisdiction that are not deductible solely
18 because the foreign tax credit was elected on the federal income tax
19 return;
20 (b) The amount of after-tax income shall be divided by one minus the
21 maximum tax rate for corporations in the Internal Revenue Code; and
22 (c) The result of the calculation in subdivision (b) of this
23 subsection shall be subtracted from the amount of federal taxable income
24 used in subdivision (a) of this subsection. The result of such
25 calculation, if greater than zero, shall be subtracted from federal
26 taxable income.
27 (7) Federal adjusted gross income shall be modified to exclude any
28 amount repaid by the taxpayer for which a reduction in federal tax is
29 allowed under section 1341(a)(5) of the