Bill Summary – FastDemocracy

LB81                                                                                 LB81
                                                                               2025
                               LEGISLATURE OF NEBRASKA
                           ONE HUNDRED NINTH LEGISLATURE
                                    FIRST SESSION
                        LEGISLATIVE BILL 81
       Introduced by Hardin, 48; Brandt, 32; Conrad, 46.
       Read first time January 09, 2025
       Committee:
  A BILL FOR AN ACT relating to the Nebraska Property Tax Incentive Act; to
      amend sections   77-6702   and   77-6703,   Revised Statutes Cumulative
       Supplement, 2024; to define a term; to change provisions relating to
      tax credits for school district taxes paid; to harmonize provisions;
      to repeal the original sections; and to declare an emergency.
  Be it enacted by the people of the State of Nebraska,
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LB81                                                                                            LB81
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         Section 1. Section 77-6702, Revised Statutes Cumulative Supplement,
   2024, is amended to read:
         77-6702 For purposes of the Nebraska Property Tax Incentive Act:
         (1) Allowable growth percentage means the percentage increase, if
   any, in the total assessed value of all real property in the state from
   the prior year to the current year, as determined by the department;
         (2) (1) Community college taxes means property taxes levied on real
  property in    this state by   a community college area,    excluding the
  following:
        (a) Any property taxes levied for bonded indebtedness;
         (b) Any property taxes levied as a result of an override of limits
   on property tax levies approved by voters pursuant to section 77-3444;
   and
         (c)   Any property taxes that,     as of    the time of   payment,    were
   delinquent for five years or more;
         (3) (2) Department means the Department of Revenue;
        (4)   (3)    Eligible taxpayer means any individual,     corporation,
   partnership, limited liability company, trust, estate, or other entity
   that pays school district taxes or community college taxes during a
   taxable year; and
         (5) (4) School district taxes means property taxes levied on real
   property in this state by a school district or multiple-district school
   system, excluding the following:
         (a) Any property taxes levied for bonded indebtedness;
         (b) Any property taxes levied as a result of an override of limits
   on property tax levies approved by voters pursuant to section 77-3444;
   and
         (c)   Any property taxes that,     as of    the time of   payment,    were
   delinquent for five years or more.
         Sec. 2. Section 77-6703, Revised Statutes Cumulative Supplement,
   2024, is amended to read:
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LB81                                                                                                  LB81
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       77-6703 (1) For taxable years beginning or deemed to begin on or
   after January     1,    2020,    and before January      1,   2025   2024,    under the
   Internal Revenue Code of 1986, as amended, there shall be allowed to each
   eligible taxpayer a refundable credit against the income tax imposed by
   the Nebraska Revenue Act of 1967 or against the franchise tax imposed by
   sections 77-3801 to 77-3807. The credit shall be equal to the credit
   percentage for the taxable year,    as set by   the department under
   subsection    (2)    of this section,   multiplied by   the amount of    school
   district taxes paid by the eligible taxpayer during such taxable year.
       (2)(a)     For taxable years beginning or    deemed to   begin during
   calendar year 2022, the department shall set the credit percentage so
   that the total amount of credits for such taxable years shall be five
   hundred forty-eight million dollars; and
       (b) For taxable years beginning or deemed to begin during calendar
   year 2023, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be five hundred
   sixty million seven hundred thousand dollars; and .
       (c) For taxable years beginning or deemed to begin during calendar
   year 2024, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be the maximum
   amount of credits allowed in the prior year increased by the allowable
   growth percentage.
       (3) If the school district taxes are paid by a corporation having an
   election in effect under subchapter S of the Internal Revenue Code, a
   partnership, a limited liability company, a trust, or an estate, the
   amount of school district taxes paid during the taxable year may be
   allocated to the shareholders, partners, members, or beneficiaries in the
   same proportion that income is distributed for taxable years beginning or
   deemed to begin before January 1, 2021, under the Internal Revenue Code
   of 1986, as amended. The department shall provide forms and schedules
   necessary for verifying eligibility for the credit provided in    this
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LB81                                                                                            LB81
                                                                                          2025
   section and for allocating the school district taxes paid. For taxable
   years beginning or deemed to begin on or after January 1, 2021, and
   before January 1, 2025 2024, under the Internal Revenue Code of 1986, as
   amended, the refundable credit shall be claimed by the corporation having
   an election in effect under subchapter S of the Internal Revenue Code,
   the partnership, the limited liability company, the trust, or the estate
   that paid the school district taxes.
       (4) For any fiscal year or short year taxpayer, the credit may be
   claimed in the first taxable year that begins following the calendar year
   for which the credit percentage was determined. The credit shall be taken
   for the school district taxes paid by the taxpayer during the immediately
   preceding calendar year.
       (5) For the first taxable year beginning or deemed to begin on or
   after January 1, 2021, and before January 1, 2022, under the Internal
   Revenue Code of 1986, as amended, for a corporation having an election in
   effect under subchapter S of the Internal Revenue Code, a partnership, a
   limited liability company,   a trust,    or an    estate that paid school
   district taxes in   calendar year   2020    but did not claim the credit
   directly or allocate such school district taxes to the shareholders,
   partners, members, or beneficiaries as permitted under subsection (3) of
   this section, there shall be allowed an additional refundable credit.
   This credit shall be equal to six percent, multiplied by the amount of
   school district taxes paid during 2020 by the eligible taxpayer.
       Sec. 3.        Original sections 77-6702 and 77-6703, Revised Statutes
   Cumulative Supplement, 2024, are repealed.
       Sec. 4.        Since an emergency exists, this act takes effect when
   passed and approved according to law.
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