LB524 LB524
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 524
Introduced by Fredrickson, 20.
Read first time January 17, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2701, 77-2715.07, 77-2717, and 77-2734.03, Revised Statutes
3 Cumulative Supplement, 2022; to provide an income tax credit for
4 food donations as prescribed; to harmonize provisions; 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 77-2701, Revised Statutes Cumulative Supplement,
2 2022, is amended to read:
3 77-2701 Sections 77-2701 to 77-27,135.01, 77-27,222, 77-27,235,
4 77-27,236, and 77-27,238 to 77-27,240 and section 2 of this act shall be
5 known and may be cited as the Nebraska Revenue Act of 1967.
6 Sec. 2. (1) For purposes of this section:
7 (a) Food pantry or food bank means an organization in this state
8 that:
9 (i) Is exempt from federal income taxation under section 501(c)(3)
10 of the Internal Revenue Code of 1986, as amended; and
11 (ii) Distributes emergency food supplies to low-income individuals
12 in this state who would otherwise not have access to such food supplies;
13 (b) Grocery store retailer means a retailer located in this state
14 that is primarily engaged in business activities classified as code
15 445110 under the North American Industry Classification System; and
16 (c) Restaurant means a business located in this state that is
17 primarily engaged in business activities classified as code 722511,
18 722513, 722514, or 722515 under the North American Industry
19 Classification System.
20 (2) For taxable years beginning or deemed to begin on or after
21 January 1, 2024, under the Internal Revenue Code of 1986, as amended, any
22 grocery store retailer or restaurant that donates food to a food pantry
23 or food bank during the taxable year shall be eligible for a credit
24 against the income tax imposed by the Nebraska Revenue Act of 1967.
25 (3) The credit provided in this section shall be a nonrefundable
26 credit in an amount equal to fifty percent of the value of the food
27 donations made during the taxable year, not to exceed two thousand five
28 hundred dollars. For purposes of this section, donated food shall be
29 valued at its wholesale value. Any amount of the credit that the grocery
30 store retailer or restaurant is prohibited from claiming in a taxable
31 year may be carried forward to any of the three subsequent taxable years.
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1 (4) Any amount relating to such food donations that was subtracted
2 from the grocery store retailer's or restaurant's federal adjusted gross
3 income or federal taxable income must be added back in the determination
4 of Nebraska adjusted gross income or Nebraska taxable income before the
5 credit provided in this section may be claimed.
6 (5) Each grocery store retailer and restaurant claiming a credit
7 under this section shall file an affidavit with the retailer's or
8 restaurant's state income tax return verifying the amount of food donated
9 during the taxable year.
10 (6) The cumulative amount of credits under this section that may be
11 allocated to grocery store retailers and restaurants in any one fiscal
12 year shall not exceed one million seven hundred fifty thousand dollars.
13 The Tax Commissioner shall establish a procedure by which the cumulative
14 amount of credits is apportioned among all grocery store retailers and
15 restaurants claiming the credit by April 15 of the fiscal year in which
16 the credit is claimed. To the maximum extent possible, the Tax
17 Commissioner shall establish the procedure described in this subsection
18 in such a manner as to ensure that all grocery store retailers and
19 restaurants can claim all of the tax credits possible up to the
20 cumulative amount of credits available for the fiscal year.
21 (7) No credit granted under this section shall be transferred, sold,
22 or assigned. No grocery store retailer or restaurant shall be eligible to
23 receive a credit under this section if such retailer or restaurant
24 employs persons who are not authorized to work in the United States under
25 federal law. No grocery store retailer or restaurant shall be able to
26 claim more than one credit under this section for a single donation.
27 (8) A food pantry or food bank may accept or reject any donation of
28 food made under this section for any reason. Any food donated after its
29 expiration date shall not qualify for a credit under this section.
30 (9) The Department of Revenue may adopt and promulgate rules and
31 regulations to carry out this section.
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1 Sec. 3. Section 77-2715.07, Revised Statutes Cumulative Supplement,
2 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 and .
15 (h) A credit to grocery store retailers and restaurants as provided
16 in section 2 of this act.
17 (4) There shall be allowed as a credit against the income tax
18 imposed by the Nebraska Revenue Act of 1967:
19 (a) A credit to all resident estates and trusts for taxes paid to
20 another state as provided in section 77-2730;
21 (b) A credit to all estates and trusts for contributions to
22 certified community betterment programs as provided in the Community
23 Development Assistance Act; and
24 (c) A refundable credit for individuals who qualify for an income
25 tax credit as an owner of agricultural assets under the Beginning Farmer
26 Tax Credit Act for all taxable years beginning or deemed to begin on or
27 after January 1, 2009, under the Internal Revenue Code of 1986, as
28 amended. The credit allowed for each partner, shareholder, member, or
29 beneficiary of a partnership, corporation, limited liability company, or
30 estate or trust qualifying for an income tax credit as an owner of
31 agricultural assets under the Beginning Farmer Tax Credit Act shall be
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1 equal to the partner's, shareholder's, member's, or beneficiary's portion
2 of the amount of tax credit distributed pursuant to subsection (6) of
3 section 77-5211.
4 (5)(a) For all taxable years beginning on or after January 1, 2007,
5 and before January 1, 2009, under the Internal Revenue Code of 1986, as
6 amended, there shall be allowed to each partner, shareholder, member, or
7 beneficiary of a partnership, subchapter S corporation, limited liability
8 company, or estate or trust a nonrefundable credit against the income tax
9 imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the
10 partner's, shareholder's, member's, or beneficiary's portion of the
11 amount of franchise tax paid to the state under sections 77-3801 to
12 77-3807 by a financial institution.
13 (b) For all taxable years beginning on or after January 1, 2009,
14 under the Internal Revenue Code of 1986, as amended, there shall be
15 allowed to each partner, shareholder, member, or beneficiary of a
16 partnership, subchapter S corporation, limited liability company, or
17 estate or trust a nonrefundable credit against the income tax imposed by
18 the Nebraska Revenue Act of 1967 equal to the partner's, shareholder's,
19 member's, or beneficiary's portion of the amount of franchise tax paid to
20 the state under sections 77-3801 to 77-3807 by a financial institution.
21 (c) Each partner, shareholder, member, or beneficiary shall report
22 his or her share of the credit in the same manner and proportion as he or
23 she reports the partnership, subchapter S corporation, limited liability
24 company, or estate or trust income. If any partner, shareholder, member,
25 or beneficiary cannot fully utilize the credit for that year, the credit
26 may not be carried forward or back.
27 (6) There shall be allowed to all individuals nonrefundable credits
28 against the income tax imposed by the Nebraska Revenue Act of 1967 as
29 provided in section 77-3604 and refundable credits against the income tax
30 imposed by the Nebraska Revenue Act of 1967 as provided in section
31 77-3605.
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1 (7)(a) For taxable years beginning or deemed to begin on or after
2 January 1, 2020, and before January 1, 2026, under the Internal Revenue
3 Code of 1986, as amended, a nonrefundable credit against the income tax
4 imposed by the Nebraska Revenue Act of 1967 in the amount of five
5 thousand dollars shall be allowed to any individual who purchases a
6 residence during the taxable year if such residence:
7 (i) Is located within an area that has been declared an extremely
8 blighted area under section 18-2101.02;
9 (ii) Is the individual's primary residence; and
10 (iii) Was not purchased from a family member of the individual or a
11 family member of the individual's spouse.
12 (b) The credit provided in this subsection shall be claimed for the
13 taxable year in which the residence is purchased. If the individual
14 cannot fully utilize the credit for such year, the credit may be carried
15 forward to subsequent taxable years until fully utilized.
16 (c) No more than one credit may be claimed under this subsection
17 with respect to a single residence.
18 (d) The credit provided in this subsection shall be subject to
19 recapture by the Department of Revenue if the individual claiming the
20 credit sells or otherwise transfers the residence or quits using the
21 residence as his or her primary residence within five years after the end
22 of the taxable year in which the credit was claimed.
23 (e) For purposes of this subsection, family member means an
24 individual's spouse, child, parent, brother, sister, grandchild, or
25 grandparent, whether by blood, marriage, or adoption.
26 (8) There shall be allowed to all individuals refundable credits
27 against the income tax imposed by the Nebraska Revenue Act of 1967 as
28 provided in the Nebraska Higher Blend Tax Credit Act, the Nebraska
29 Property Tax Incentive Act, and the Renewable Chemical Production Tax
30 Credit Act.
31 (9)(a) For taxable years beginning or deemed to begin on or after