LB176 LB176
2021 2021
LEGISLATURE OF NEBRASKA
ONE HUNDRED SEVENTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 176
Introduced by Lindstrom, 18.
Read first time January 08, 2021
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, 2020; to provide an income tax credit for
4 certain agricultural producers; to harmonize provisions; and to
5 repeal 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 2020, 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, 77-27,238, and 77-27,239 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 taxable years beginning or deemed to begin on or
7 after January 1, 2022, under the Internal Revenue Code of 1986, as
8 amended, an agricultural producer who qualifies for the Conservation
9 Stewardship Program or the Environmental Quality Incentives Program of
10 the United States Department of Agriculture during the taxable year shall
11 be allowed a nonrefundable credit against the income tax imposed by the
12 Nebraska Revenue Act of 1967. The credit shall be equal to two thousand
13 five hundred dollars.
14 (2) The credit shall be claimed for the taxable year in which the
15 agricultural producer qualifies for a program described in subsection (1)
16 of this section. If the agricultural producer cannot fully utilize the
17 credit for such taxable year, the credit may be carried forward to
18 subsequent taxable years until fully utilized.
19 (3) For purposes of this section:
20 (a) Agricultural land and horticultural land has the same meaning as
21 in section 77-1359; and
22 (b) Agricultural producer means any individual, corporation,
23 partnership, limited liability company, trust, estate, or other entity
24 that (i) is subject to the income tax imposed by the Nebraska Revenue Act
25 of 1967 and (ii) is an owner of agricultural land and horticultural land
26 in this state.
27 Sec. 3. Section 77-2715.07, Revised Statutes Cumulative Supplement,
28 2020, is amended to read:
29 77-2715.07 (1) There shall be allowed to qualified resident
30 individuals as a nonrefundable credit against the income tax imposed by
31 the Nebraska Revenue Act of 1967:
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1 (a) A credit equal to the federal credit allowed under section 22 of
2 the Internal Revenue Code; and
3 (b) A credit for taxes paid to another state as provided in section
4 77-2730.
5 (2) There shall be allowed to qualified resident individuals against
6 the income tax imposed by the Nebraska Revenue Act of 1967:
7 (a) For returns filed reporting federal adjusted gross incomes of
8 greater than twenty-nine thousand dollars, a nonrefundable credit equal
9 to twenty-five percent of the federal credit allowed under section 21 of
10 the Internal Revenue Code of 1986, as amended, except that for taxable
11 years beginning or deemed to begin on or after January 1, 2015, such
12 nonrefundable credit shall be allowed only if the individual would have
13 received the federal credit allowed under section 21 of the code after
14 adding back in any carryforward of a net operating loss that was deducted
15 pursuant to such section in determining eligibility for the federal
16 credit;
17 (b) For returns filed reporting federal adjusted gross income of
18 twenty-nine thousand dollars or less, a refundable credit equal to a
19 percentage of the federal credit allowable under section 21 of the
20 Internal Revenue Code of 1986, as amended, whether or not the federal
21 credit was limited by the federal tax liability. The percentage of the
22 federal credit shall be one hundred percent for incomes not greater than
23 twenty-two thousand dollars, and the percentage shall be reduced by ten
24 percent for each one thousand dollars, or fraction thereof, by which the
25 reported federal adjusted gross income exceeds twenty-two thousand
26 dollars, except that for taxable years beginning or deemed to begin on or
27 after January 1, 2015, such refundable credit shall be allowed only if
28 the individual would have received the federal credit allowed under
29 section 21 of the code after adding back in any carryforward of a net
30 operating loss that was deducted pursuant to such section in determining
31 eligibility for the federal credit;
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1 (c) A refundable credit as provided in section 77-5209.01 for
2 individuals who qualify for an income tax credit as a qualified beginning
3 farmer or livestock producer under the Beginning Farmer Tax Credit Act
4 for all taxable years beginning or deemed to begin on or after January 1,
5 2006, under the Internal Revenue Code of 1986, as amended;
6 (d) A refundable credit for individuals who qualify for an income
7 tax credit under the Angel Investment Tax Credit Act, the Nebraska
8 Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research
9 and Development Act, or the Volunteer Emergency Responders Incentive Act;
10 and
11 (e) A refundable credit equal to ten percent of the federal credit
12 allowed under section 32 of the Internal Revenue Code of 1986, as
13 amended, except that for taxable years beginning or deemed to begin on or
14 after January 1, 2015, such refundable credit shall be allowed only if
15 the individual would have received the federal credit allowed under
16 section 32 of the code after adding back in any carryforward of a net
17 operating loss that was deducted pursuant to such section in determining
18 eligibility for the federal credit.
19 (3) There shall be allowed to all individuals as a nonrefundable
20 credit against the income tax imposed by the Nebraska Revenue Act of
21 1967:
22 (a) A credit for personal exemptions allowed under section
23 77-2716.01;
24 (b) A credit for contributions to certified community betterment
25 programs as provided in the Community Development Assistance Act. Each
26 partner, each shareholder of an electing subchapter S corporation, each
27 beneficiary of an estate or trust, or each member of a limited liability
28 company shall report his or her share of the credit in the same manner
29 and proportion as he or she reports the partnership, subchapter S
30 corporation, estate, trust, or limited liability company income;
31 (c) A credit for investment in a biodiesel facility as provided in
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1 section 77-27,236;
2 (d) A credit as provided in the New Markets Job Growth Investment
3 Act;
4 (e) A credit as provided in the Nebraska Job Creation and Mainstreet
5 Revitalization Act;
6 (f) A credit to employers as provided in section 77-27,238; and
7 (g) A credit as provided in the Affordable Housing Tax Credit Act;
8 and .
9 (h) A credit for agricultural producers as provided in section 2 of
10 this act.
11 (4) There shall be allowed as a credit against the income tax
12 imposed by the Nebraska Revenue Act of 1967:
13 (a) A credit to all resident estates and trusts for taxes paid to
14 another state as provided in section 77-2730;
15 (b) A credit to all estates and trusts for contributions to
16 certified community betterment programs as provided in the Community
17 Development Assistance Act; and
18 (c) A refundable credit for individuals who qualify for an income
19 tax credit as an owner of agricultural assets under the Beginning Farmer
20 Tax Credit Act for all taxable years beginning or deemed to begin on or
21 after January 1, 2009, under the Internal Revenue Code of 1986, as
22 amended. The credit allowed for each partner, shareholder, member, or
23 beneficiary of a partnership, corporation, limited liability company, or
24 estate or trust qualifying for an income tax credit as an owner of
25 agricultural assets under the Beginning Farmer Tax Credit Act shall be
26 equal to the partner's, shareholder's, member's, or beneficiary's portion
27 of the amount of tax credit distributed pursuant to subsection (6) of
28 section 77-5211.
29 (5)(a) For all taxable years beginning on or after January 1, 2007,
30 and before January 1, 2009, under the Internal Revenue Code of 1986, as
31 amended, there shall be allowed to each partner, shareholder, member, or
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1 beneficiary of a partnership, subchapter S corporation, limited liability
2 company, or estate or trust a nonrefundable credit against the income tax
3 imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the
4 partner's, shareholder's, member's, or beneficiary's portion of the
5 amount of franchise tax paid to the state under sections 77-3801 to
6 77-3807 by a financial institution.
7 (b) For all taxable years beginning on or after January 1, 2009,
8 under the Internal Revenue Code of 1986, as amended, there shall be
9 allowed to each partner, shareholder, member, or beneficiary of a
10 partnership, subchapter S corporation, limited liability company, or
11 estate or trust a nonrefundable credit against the income tax imposed by
12 the Nebraska Revenue Act of 1967 equal to the partner's, shareholder's,
13 member's, or beneficiary's portion of the amount of franchise tax paid to
14 the state under sections 77-3801 to 77-3807 by a financial institution.
15 (c) Each partner, shareholder, member, or beneficiary shall report
16 his or her share of the credit in the same manner and proportion as he or
17 she reports the partnership, subchapter S corporation, limited liability
18 company, or estate or trust income. If any partner, shareholder, member,
19 or beneficiary cannot fully utilize the credit for that year, the credit
20 may not be carried forward or back.
21 (6) There shall be allowed to all individuals nonrefundable credits
22 against the income tax imposed by the Nebraska Revenue Act of 1967 as
23 provided in section 77-3604 and refundable credits against the income tax
24 imposed by the Nebraska Revenue Act of 1967 as provided in section
25 77-3605.
26 (7)(a) For taxable years beginning or deemed to begin on or after
27 January 1, 2020, and before January 1, 2026, under the Internal Revenue
28 Code of 1986, as amended, a nonrefundable credit against the income tax
29 imposed by the Nebraska Revenue Act of 1967 in the amount of five
30 thousand dollars shall be allowed to any individual who purchases a
31 residence during the taxable year if such residence:
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1 (i) Is located within an area that has been declared an extremely
2 blighted area under section 18-2101.02;
3 (ii) Is the individual's primary residence; and
4 (iii) Was not purchased from a family member of the individual or a
5 family member of the individual's spouse.
6 (b) The credit provided in this subsection shall be claimed for the
7 taxable year in which the residence is purchased. If the individual
8 cannot fully utilize the credit for such year, the credit may be carried
9 forward to subsequent taxable years until fully utilized.
10 (c) No more than one credit may be claimed under this subsection
11 with respect to a single residence.
12 (d) The credit provided in this subsection shall be subject to
13 recapture by the Department of Revenue if the individual claiming the
14 credit sells or otherwise transfers the residence or quits using the
15 residence as his or her primary residence within five years after the end
16 of the taxable year in which the credit was claimed.
17 (e) For purposes of this subsection, family member means an
18 individual's spouse, child, parent, brother, sister, grandchild, or
19 grandparent, whether by blood, marriage, or adoption.
20 (8) There shall be allowed to all individuals refundable credits
21 against the income tax imposed by the Nebraska Revenue Act of 1967 as
22 provided in the Nebraska Property Tax Incentive Act and the Renewable
23 Chemical Production Tax Credit Act.
24 Sec. 4. Section 77-2717, Revised Statutes Cumulative Supplement,
25 2020, is amended to read:
26 77-2717 (1)(a)(i) For taxable years beginning or deemed to begin
27 before January 1, 2014, the tax imposed on all resident estates and
28 trusts shall be a percentage of the federal taxable income of such
29 estates and trusts as modified in section 77-2716, plus a percentage of
30 the federal alternative minimum tax and the federal tax on premature or
31 lump-sum distributions from qualified retirement plans. The additional
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1 taxes shall be recomputed by (A) substituting Nebraska taxable income for
2 federal taxable income, (B) calculating what the federal alternative
3 minimum tax would be on Nebraska taxable income and adjusting such
4 calculations for any items which are reflected differently in the
5 determination of federal taxable income, and (C) applying Nebraska rates
6 to the result. The federal credit for prior year minimum tax, after the
7 recomputations required by the Nebraska Revenue Act of 1967, and the
8 credits provided in the Nebraska Advantage Microenterprise Tax Credit Act
9 and the Nebraska Advantage Research and Development Act shall be allowed
10 as a reduction in the income tax due. A refundable income tax credit
11 shall be allowed for all resident estates and trusts under the Angel
12 Investment Tax Credit Act, the Nebraska Advantage Microenterprise Tax
13 Credit Act, and the Nebraska Advantage Research and Development Act. A
14 nonrefundable income tax credit shall be allowed for all resident estates
15 and trusts as provided in the New Markets Job Growth Investment Act.
16 (ii) For taxable years beginning or deemed to begin on or after
17 January 1, 2014, the tax imposed on all resident estates and trusts shall
18 be a percentage of the federal taxable income of such estates and trusts
19 as modified in section 77-2716, plus a percentage of the federal tax on
20 premature or lump-sum distributions from qualified retirement plans. The
21 additional taxes shall be recomputed by substituting Nebraska taxable
22 income for federal taxable income and applying Nebraska rates to the
23 result. The credits provided in the Nebraska Advantage Microenterprise
24 Tax Credit Act and the Nebraska Advantage Research and Development Act
25 shall be allowed as a reduction in the income tax due. A refundable
26 income tax credit shall be allowed for all resident estates and trusts
27 under the Angel Investment Tax Credit Act, the Nebraska Advantage
28 Microenterprise Tax Credit Act, the Nebraska Advantage Research and
29 Development Act, the Nebraska Property Tax Incentive Act, and the
30 Renewable Chemical Production Tax Credit Act. A nonrefundable income tax
31 credit shall be allowed for all resident estates and trusts as provided