Bill Summary – FastDemocracy

LB1305                                                                             LB1305
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                                 LEGISLATURE OF NEBRASKA
                           ONE HUNDRED EIGHTH LEGISLATURE
                                        SECOND SESSION
                       LEGISLATIVE BILL 1305
     Introduced by Hansen, 16.
     Read first time January 17, 2024
     Committee: Revenue
 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
         77-101,   77-106,    and     77-2704.66,    Reissue Revised Statutes of
         Nebraska, and section 77-2716, Revised Statutes Supplement, 2023; to
         prohibit tax liability on the purchase, sale, or exchange of gold or
         silver bullion; to define and redefine terms; to change sales tax
         exemptions provisions relating to currency and bullion; to provide
         an income tax adjustment for net capital losses and gains of the
         sale or exchange of gold or silver bullion; to provide an operative
         date; and to repeal the original sections.
     Be it enacted by the people of the State of Nebraska,
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         Section 1. Section 77-101, Reissue Revised Statutes of Nebraska, is
     amended to read:
        77-101 For purposes of Chapter 77 and any statutes dealing with
    taxation, unless the context otherwise requires, the definitions found in
    sections 77-102 to 77-132 and section 3 of this act shall be used.
         Sec. 2. Section 77-106, Reissue Revised Statutes of Nebraska, is
  amended to read:
         77-106 The term money includes all kinds of coin and all kinds of
  paper, issued by or under authority of the United States, circulating as
  money. Money does not include central bank digital currency.
        Sec. 3.     Central bank digital currency means any digital currency,
     digital medium of exchange, or digital monetary unit of account issued by
 the United States Federal Reserve System, a federal agency, a foreign
    government, a foreign central bank, or a foreign reserve system, that is
    made directly available to a consumer by such entities, and includes any
     such digital currency, digital medium of exchange, or digital monetary
     unit of account that is processed or validated directly by such entities.
         Sec. 4. Section 77-2704.66, Reissue Revised Statutes of Nebraska, is
  amended to read:
         77-2704.66 (1) Sales and use taxes shall not be imposed on the gross
  receipts from the sale, lease, or rental of and the storage, use, or
  other consumption in this state of currency or bullion.
         (2) For purposes of this section:
         (a) Bullion means coins, bars, ingots, notes, leaf, foil, film, or
  commemorative medallions of gold, silver, platinum, or palladium, or a
  combination of these, for which the value of the metal depends primarily
  on its content and not the form; and
        (b) Currency means a coin or currency made of gold, silver, or other
    metal or paper which is or has been used as legal tender.
        Sec.   5.   Section   77-2716,   Revised Statutes Supplement,   2023,   is
    amended to read:
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        77-2716      (1)   The following adjustments to   federal adjusted gross
     income or, for corporations and fiduciaries, federal taxable income shall
  be made for interest or dividends received:
        (a)(i) There shall be subtracted interest or dividends received by
     the owner of obligations of the United States and its territories and
  possessions or of any authority, commission, or instrumentality of the
  United States to the extent includable in gross income for federal income
 tax purposes but exempt from state income taxes under the laws of the
    United States; and
         (ii) There shall be subtracted interest received by the owner of
 obligations of the State of Nebraska or its political subdivisions or
    authorities which are Build America Bonds to the extent includable in
    gross income for federal income tax purposes;
         (b) There shall be subtracted that portion of the total dividends
 and other income received from a regulated investment company which is
     attributable to    obligations described in    subdivision     (a)    of this
 subsection as    reported to    the recipient by    the regulated investment
    company;
         (c) There shall be added interest or dividends received by the owner
  of obligations of the District of Columbia, other states of the United
 States, or their political subdivisions, authorities, commissions, or
    instrumentalities to the extent excluded in the computation of gross
     income for federal income tax purposes except that such interest or
 dividends shall not be added if received by a corporation which is a
    regulated investment company;
        (d) There shall be added that portion of the total dividends and
     other income received from    a regulated investment company which is
    attributable to    obligations described in    subdivision     (c)    of this
     subsection and excluded for federal income tax purposes as reported to
     the recipient by the regulated investment company; and
        (e)(i) Any amount subtracted under this subsection shall be reduced
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 by any interest on indebtedness incurred to carry the obligations or
  securities described in    this subsection or     the investment in     the
  regulated investment company and by   any expenses incurred in     the
  production of interest or dividend income described in this subsection to
  the extent that such expenses, including amortizable bond premiums, are
  deductible in determining federal taxable income.
         (ii) Any amount added under this subsection shall be reduced by any
  expenses incurred in    the production of    such income to   the extent
  disallowed in the computation of federal taxable income.
         (2) There shall be allowed a net operating loss derived from or
  connected with Nebraska sources computed under rules and regulations
  adopted and promulgated by the Tax Commissioner consistent, to the extent
  possible under the Nebraska Revenue Act of 1967, with the laws of the
  United States. For a resident individual, estate, or trust, the net
  operating loss computed on    the federal income tax return shall be
     adjusted by    the modifications contained in       this section.     For     a
     nonresident individual, estate, or trust or for a partial-year resident
     individual, the net operating loss computed on the federal return shall
  be adjusted by   the modifications contained in   this section and any
  carryovers or carrybacks shall be limited to the portion of the loss
     derived from or connected with Nebraska sources.
         (3) There shall be subtracted from federal adjusted gross income for
  all taxable years beginning on or after January 1, 1987, the amount of
  any state income tax refund to the extent such refund was deducted under
  the Internal Revenue Code, was not allowed in the computation of the tax
  due under the Nebraska Revenue Act of 1967, and is included in federal
  adjusted gross income.
         (4) Federal adjusted gross income, or, for a fiduciary, federal
  taxable income shall be modified to exclude the portion of the income or
  loss received from a small business corporation with an election in
     effect under subchapter S of the Internal Revenue Code or from a limited
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 liability company organized pursuant to the Nebraska Uniform Limited
     Liability Company Act that is not derived from or connected with Nebraska
  sources as determined in section 77-2734.01.
         (5) There shall be subtracted from federal adjusted gross income or,
  for corporations and fiduciaries,        federal taxable income dividends
  received or deemed to be received from corporations which are not subject
  to the Internal Revenue Code.
         (6) There shall be subtracted from federal taxable income a portion
     of the income earned by a corporation subject to the Internal Revenue
  Code of 1986 that is actually taxed by a foreign country or one of its
  political subdivisions at a rate in excess of the maximum federal tax
  rate for corporations. The taxpayer may make the computation for each
     foreign country or for groups of foreign countries. The portion of the
  taxes that may be deducted shall be computed in the following manner:
        (a) The amount of federal taxable income from operations within a
     foreign taxing jurisdiction shall be reduced by the amount of taxes
  actually paid to the foreign jurisdiction that are not deductible solely
  because the foreign tax credit was elected on the federal income tax
  return;
         (b) The amount of after-tax income shall be divided by one minus the
     maximum tax rate for corporations in the Internal Revenue Code; and
         (c)    The result of   the calculation in     subdivision    (b)    of this
  subsection shall be subtracted from the amount of federal taxable income
  used in   subdivision        (a)   of this subsection.        The result of    such
     calculation,     if greater than zero,    shall be    subtracted from federal
  taxable income.
         (7) Federal adjusted gross income shall be modified to exclude any
     amount repaid by the taxpayer for which a reduction in federal tax is
  allowed under section 1341(a)(5) of the Internal Revenue Code.
         (8)(a)       Federal adjusted gross income or,   for corporations and
 fiduciaries,        federal taxable income shall be    reduced,     to the extent
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 included, by income from interest, earnings, and state contributions
     received from the Nebraska educational savings plan trust created in
 sections          85-1801   to    85-1817       and any account established under the
     achieving      a better life experience program as    provided in    sections
  77-1401 to 77-1409.
            (b)     Federal adjusted gross income or,    for corporations and
  fiduciaries, federal taxable income shall be reduced by any contributions
  as    a participant in    the Nebraska educational savings plan trust or
  contributions to an account established under the achieving a better life
  experience program made for the benefit of a beneficiary as provided in
  sections 77-1401 to 77-1409, to the extent not deducted for federal
  income tax purposes, but not to exceed five thousand dollars per married
  filing separate return or ten thousand dollars for any other return. With
  respect to a qualified rollover within the meaning of section 529 of the
  Internal Revenue Code from another state's plan, any interest, earnings,
  and state contributions received from the other state's educational
     savings plan which is qualified under section 529 of the code shall
  qualify for the reduction provided in this subdivision. For contributions
  by a custodian of a custodial account including rollovers from another
  custodial account, the reduction shall only apply to funds added to the
  custodial account after January 1, 2014.
            (c) For taxable years beginning or deemed to begin on or after
  January 1, 2021, under the Internal Revenue Code of 1986, as amended,
  federal adjusted gross income shall be reduced, to the extent included in
  the adjusted gross income of    an individual,         by the amount of    any
  contribution made by the individual's employer into an account under the
  Nebraska educational savings plan trust owned by the individual, not to
  exceed five thousand dollars per married filing separate return or ten
  thousand dollars for any other return.
            (d)     Federal adjusted gross income or,    for corporations and
  fiduciaries, federal taxable income shall be increased by:
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          (i) The amount resulting from the cancellation of a participation
    agreement refunded to the taxpayer as a participant in the Nebraska
    educational savings plan trust to the extent previously deducted under
    subdivision (8)(b) of this section; and
          (ii)   The amount of   any withdrawals by    the owner of    an account
    established under the achieving      a better life experience program as
    provided in sections 77-1401 to 77-1409 for nonqualified expenses to the
    extent previously deducted under subdivision (8)(b) of this section.
          (9)(a) For income tax returns filed after September 10, 2001, for
     taxable years beginning or deemed to begin before January 1, 2006, under
    the Internal Revenue Code of 1986, as amended, federal adjusted gross
     income or, for corporations and fiduciaries, federal taxable income shall
 be increased by eighty-five percent of any amount of any federal bonus
     depreciation received under the federal Job Creation and Worker
 Assistance Act of 2002 or the federal Jobs and Growth Tax Act of 2003,
    under section 168(k) or section 1400L of the Internal Revenue Code of
    1986, as amended, for assets placed in service after September 10, 2001,
    and before December 31, 2005.
          (b)    For   a partnership,        limited liability company,      cooperative,
    including any cooperative exempt from income taxes under section 521 of
     the Internal Revenue Code of    1986,    as amended,      limited cooperative
    association, subchapter S corporation, or joint venture, the increase
    shall be distributed to the partners, members, shareholders, patrons, or
    beneficiaries in the same manner as income is distributed for use against
  their income tax liabilities.
          (c) For a corporation with a unitary business having activity both
    inside and outside the state,    the increase shall be    apportioned to
    Nebraska in the same manner as income is apportioned to the state by
    section 77-2734.05.
           (d) The amount of bonus depreciation added to federal adjusted gross
    income or, for corporations and fiduciaries, federal taxable income by
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  this subsection shall be subtracted in a later taxable year. Twenty
     percent of the total amount of bonus depreciation added back by this
  subsection for tax years beginning or deemed to begin before January 1,
  2003,       under the Internal Revenue Code of    1986,    as amended,     may be
  subtracted in the first taxable year beginning or deemed to begin on or
 after January 1, 2005, under the Internal Revenue Code of 1986, as
    amended, and twenty percent in each of the next four following taxable
     years. Twenty percent of the total amount of bonus depreciation added
  back by this subsection for tax years beginning or deemed to begin on or
 after January 1, 2003, may be subtracted in the first taxable year
     beginning or deemed to begin on or after January 1, 2006, under the
  Internal Revenue Code of 1986, as amended, and twenty percent in each of
  the next four following taxable years.
            (10) For taxable years beginning or deemed to begin on or after
     January 1, 2003, and before January 1, 2006, under the Internal Revenue
     Code of   1986,      as amended,     federal adjusted gross income or,     for
     corporations and fiduciaries, federal taxable income shall be increased
     by the amount of any capital investment that is expensed under section
  179 of the Internal Revenue Code of 1986, as amended, that is in excess
  of twenty-five thousand dollars that is allowed under the federal Jobs
  and Growth Tax Act of   2003.   Twenty percent of   the total amount of
     expensing added back by this subsection for tax years beginning or deemed
     to b