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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 747
Introduced by Cavanaugh, M., 6.
Read first time January 18, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2715.07 and 77-4212, Revised Statutes Cumulative Supplement,
3 2022; to provide an income tax credit for renters as prescribed; to
4 change provisions relating to a property tax credit; and to repeal
5 the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-2715.07, Revised Statutes Cumulative
2 Supplement, 2022, is amended to read:
3 77-2715.07 (1) There shall be allowed to qualified resident
4 individuals as a nonrefundable credit against the income tax imposed by
5 the Nebraska Revenue Act of 1967:
6 (a) A credit equal to the federal credit allowed under section 22 of
7 the Internal Revenue Code; and
8 (b) A credit for taxes paid to another state as provided in section
9 77-2730.
10 (2) There shall be allowed to qualified resident individuals against
11 the income tax imposed by the Nebraska Revenue Act of 1967:
12 (a) For returns filed reporting federal adjusted gross incomes of
13 greater than twenty-nine thousand dollars, a nonrefundable credit equal
14 to twenty-five percent of the federal credit allowed under section 21 of
15 the Internal Revenue Code of 1986, as amended, except that for taxable
16 years beginning or deemed to begin on or after January 1, 2015, such
17 nonrefundable credit shall be allowed only if the individual would have
18 received the federal credit allowed under section 21 of the code after
19 adding back in any carryforward of a net operating loss that was deducted
20 pursuant to such section in determining eligibility for the federal
21 credit;
22 (b) For returns filed reporting federal adjusted gross income of
23 twenty-nine thousand dollars or less, a refundable credit equal to a
24 percentage of the federal credit allowable under section 21 of the
25 Internal Revenue Code of 1986, as amended, whether or not the federal
26 credit was limited by the federal tax liability. The percentage of the
27 federal credit shall be one hundred percent for incomes not greater than
28 twenty-two thousand dollars, and the percentage shall be reduced by ten
29 percent for each one thousand dollars, or fraction thereof, by which the
30 reported federal adjusted gross income exceeds twenty-two thousand
31 dollars, except that for taxable years beginning or deemed to begin on or
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1 after January 1, 2015, such refundable credit shall be allowed only if
2 the individual would have received the federal credit allowed under
3 section 21 of the code after adding back in any carryforward of a net
4 operating loss that was deducted pursuant to such section in determining
5 eligibility for the federal credit;
6 (c) A refundable credit as provided in section 77-5209.01 for
7 individuals who qualify for an income tax credit as a qualified beginning
8 farmer or livestock producer under the Beginning Farmer Tax Credit Act
9 for all taxable years beginning or deemed to begin on or after January 1,
10 2006, under the Internal Revenue Code of 1986, as amended;
11 (d) A refundable credit for individuals who qualify for an income
12 tax credit under the Angel Investment Tax Credit Act, the Nebraska
13 Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research
14 and Development Act, or the Volunteer Emergency Responders Incentive Act;
15 and
16 (e) A refundable credit equal to ten percent of the federal credit
17 allowed under section 32 of the Internal Revenue Code of 1986, as
18 amended, except that for taxable years beginning or deemed to begin on or
19 after January 1, 2015, such refundable credit shall be allowed only if
20 the individual would have received the federal credit allowed under
21 section 32 of the code after adding back in any carryforward of a net
22 operating loss that was deducted pursuant to such section in determining
23 eligibility for the federal credit.
24 (3) There shall be allowed to all individuals as a nonrefundable
25 credit against the income tax imposed by the Nebraska Revenue Act of
26 1967:
27 (a) A credit for personal exemptions allowed under section
28 77-2716.01;
29 (b) A credit for contributions to certified community betterment
30 programs as provided in the Community Development Assistance Act. Each
31 partner, each shareholder of an electing subchapter S corporation, each
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1 beneficiary of an estate or trust, or each member of a limited liability
2 company shall report his or her share of the credit in the same manner
3 and proportion as he or she reports the partnership, subchapter S
4 corporation, estate, trust, or limited liability company income;
5 (c) A credit for investment in a biodiesel facility as provided in
6 section 77-27,236;
7 (d) A credit as provided in the New Markets Job Growth Investment
8 Act;
9 (e) A credit as provided in the Nebraska Job Creation and Mainstreet
10 Revitalization Act;
11 (f) A credit to employers as provided in sections 77-27,238 and
12 77-27,240; and
13 (g) A credit as provided in the Affordable Housing Tax Credit Act.
14 (4) There shall be allowed as a credit against the income tax
15 imposed by the Nebraska Revenue Act of 1967:
16 (a) A credit to all resident estates and trusts for taxes paid to
17 another state as provided in section 77-2730;
18 (b) A credit to all estates and trusts for contributions to
19 certified community betterment programs as provided in the Community
20 Development Assistance Act; and
21 (c) A refundable credit for individuals who qualify for an income
22 tax credit as an owner of agricultural assets under the Beginning Farmer
23 Tax Credit Act for all taxable years beginning or deemed to begin on or
24 after January 1, 2009, under the Internal Revenue Code of 1986, as
25 amended. The credit allowed for each partner, shareholder, member, or
26 beneficiary of a partnership, corporation, limited liability company, or
27 estate or trust qualifying for an income tax credit as an owner of
28 agricultural assets under the Beginning Farmer Tax Credit Act shall be
29 equal to the partner's, shareholder's, member's, or beneficiary's portion
30 of the amount of tax credit distributed pursuant to subsection (6) of
31 section 77-5211.
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1 (5)(a) For all taxable years beginning on or after January 1, 2007,
2 and before January 1, 2009, under the Internal Revenue Code of 1986, as
3 amended, there shall be allowed to each partner, shareholder, member, or
4 beneficiary of a partnership, subchapter S corporation, limited liability
5 company, or estate or trust a nonrefundable credit against the income tax
6 imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the
7 partner's, shareholder's, member's, or beneficiary's portion of the
8 amount of franchise tax paid to the state under sections 77-3801 to
9 77-3807 by a financial institution.
10 (b) For all taxable years beginning on or after January 1, 2009,
11 under the Internal Revenue Code of 1986, as amended, there shall be
12 allowed to each partner, shareholder, member, or beneficiary of a
13 partnership, subchapter S corporation, limited liability company, or
14 estate or trust a nonrefundable credit against the income tax imposed by
15 the Nebraska Revenue Act of 1967 equal to the partner's, shareholder's,
16 member's, or beneficiary's portion of the amount of franchise tax paid to
17 the state under sections 77-3801 to 77-3807 by a financial institution.
18 (c) Each partner, shareholder, member, or beneficiary shall report
19 his or her share of the credit in the same manner and proportion as he or
20 she reports the partnership, subchapter S corporation, limited liability
21 company, or estate or trust income. If any partner, shareholder, member,
22 or beneficiary cannot fully utilize the credit for that year, the credit
23 may not be carried forward or back.
24 (6) There shall be allowed to all individuals nonrefundable credits
25 against the income tax imposed by the Nebraska Revenue Act of 1967 as
26 provided in section 77-3604 and refundable credits against the income tax
27 imposed by the Nebraska Revenue Act of 1967 as provided in section
28 77-3605.
29 (7)(a) For taxable years beginning or deemed to begin on or after
30 January 1, 2020, and before January 1, 2026, under the Internal Revenue
31 Code of 1986, as amended, a nonrefundable credit against the income tax
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1 imposed by the Nebraska Revenue Act of 1967 in the amount of five
2 thousand dollars shall be allowed to any individual who purchases a
3 residence during the taxable year if such residence:
4 (i) Is located within an area that has been declared an extremely
5 blighted area under section 18-2101.02;
6 (ii) Is the individual's primary residence; and
7 (iii) Was not purchased from a family member of the individual or a
8 family member of the individual's spouse.
9 (b) The credit provided in this subsection shall be claimed for the
10 taxable year in which the residence is purchased. If the individual
11 cannot fully utilize the credit for such year, the credit may be carried
12 forward to subsequent taxable years until fully utilized.
13 (c) No more than one credit may be claimed under this subsection
14 with respect to a single residence.
15 (d) The credit provided in this subsection shall be subject to
16 recapture by the Department of Revenue if the individual claiming the
17 credit sells or otherwise transfers the residence or quits using the
18 residence as his or her primary residence within five years after the end
19 of the taxable year in which the credit was claimed.
20 (e) For purposes of this subsection, family member means an
21 individual's spouse, child, parent, brother, sister, grandchild, or
22 grandparent, whether by blood, marriage, or adoption.
23 (8) There shall be allowed to all individuals refundable credits
24 against the income tax imposed by the Nebraska Revenue Act of 1967 as
25 provided in the Nebraska Higher Blend Tax Credit Act, the Nebraska
26 Property Tax Incentive Act, and the Renewable Chemical Production Tax
27 Credit Act.
28 (9)(a) For taxable years beginning or deemed to begin on or after
29 January 1, 2022, under the Internal Revenue Code of 1986, as amended, a
30 refundable credit against the income tax imposed by the Nebraska Revenue
31 Act of 1967 shall be allowed to the parent of a stillborn child if:
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1 (i) A fetal death certificate is filed pursuant to subsection (1) of
2 section 71-606 for such child;
3 (ii) Such child had advanced to at least the twentieth week of
4 gestation; and
5 (iii) Such child would have been a dependent of the individual
6 claiming the credit.
7 (b) The amount of the credit shall be two thousand dollars.
8 (c) The credit shall be allowed for the taxable year in which the
9 stillbirth occurred.
10 (10) For taxable years beginning or deemed to begin on or after
11 January 1, 2023, under the Internal Revenue Code of 1986, as amended, a
12 refundable credit against the income tax imposed by the Nebraska Revenue
13 Act of 1967 shall be allowed to any individual who rents a house,
14 apartment, or other residential unit in this state during the taxable
15 year for use as such individual's primary residence. The credit shall be
16 equal to the greater of (a) four percent of the total amount of rent paid
17 by the individual during the taxable year or (b) two hundred dollars, but
18 in no case shall the credit exceed one thousand dollars.
19 Sec. 2. Section 77-4212, Revised Statutes Cumulative Supplement,
20 2022, is amended to read:
21 77-4212 (1) For tax year 2007, the amount of relief granted under
22 the Property Tax Credit Act shall be one hundred five million dollars.
23 For tax year 2008, the amount of relief granted under the act shall be
24 one hundred fifteen million dollars. It is the intent of the Legislature
25 to fund the Property Tax Credit Act for tax years after tax year 2008
26 using available revenue. For tax year 2017, the amount of relief granted
27 under the act shall be two hundred twenty-four million dollars. For tax
28 years year 2020 through 2022 and each tax year thereafter, the minimum
29 amount of relief granted under the act shall be two hundred seventy-five
30 million dollars. For tax year 2023 and each tax year thereafter, the
31 amount of relief granted under the act shall be two hundred million
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1 dollars. If money is transferred or credited to the Property Tax Credit
2 Cash Fund pursuant to any other state law, such amount shall be added to
3 the minimum amount provided in required under this subsection when
4 determining the total amount of relief granted under the act. The relief
5 shall be in the form of a property tax credit which appears on the
6 property tax statement.
7 (2)(a) For tax years prior to tax year 2017, to determine the amount
8 of the property tax credit, the county treasurer shall multiply the
9 amount disbursed to the county under subdivision (4)(a) of this section
10 by the ratio of the real property valuation of the parcel to the total
11 real property valuation in the county. The amount determined shall be the
12 property tax credit for the property.
13 (b) Beginning with tax year 2017, to determine the amount of the
14 property tax credit, the county treasurer shall multiply the amount
15 disbursed to the county under subdivision (4)(b) of this section by the
16 ratio of the credit allocation valuation of the parcel to the total
17 credit allocation valuation in the county. The amount determined shall be
18 the property tax credit for the property.
19 (3) If the real property owner qualifies for a homestead exemption
20 under sections 77-3501 to 77-3529, the owner shall also be qualified for
21 the relief provided in the act to the extent of any remaining liability
22 after calculation of the relief provided by the homestead exemption. If
23 the credit results in a property tax liability on the homestead that is
24 less than zero, the amount of the credit which cannot be used by the
25 taxpayer shall be returned to the Property Tax Administrator by July 1 of
26 the year the amount disbursed to the county was disbursed. The Property
27 Tax Administrator shall immediately credit any funds returned under this
28 subsection to the Property Tax Credit Cash Fund. Upon the return of any
29 funds under this subsection, the county treasurer shall electronically
30 file a report with the Property Tax Administrator, on a form prescribed
31 by the Tax Commissioner, indicating the amount of funds distributed to