LB596 LB596
2021 2021
LEGISLATURE OF NEBRASKA
ONE HUNDRED SEVENTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 596
Introduced by Albrecht, 17.
Read first time January 20, 2021
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend section
2 77-908, Reissue Revised Statutes of Nebraska, and sections
3 77-2715.07, 77-2717, 77-2734.03, and 77-3806, Revised Statutes
4 Cumulative Supplement, 2020; to adopt the Nebraska Higher Blend Tax
5 Credit Act; to harmonize provisions; and to repeal the original
6 sections.
7 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 8 of this act shall be known and may be
2 cited as the Nebraska Higher Blend Tax Credit Act.
3 Sec. 2. For purposes of the Nebraska Higher Blend Tax Credit Act:
4 (1) Department means the Department of Revenue;
5 (2) E-15 means ethanol blended gasoline formulated with a percentage
6 of fifteen percent by volume of ethanol;
7 (3) E-25 means ethanol blended gasoline formulated with a percentage
8 of twenty-five percent by volume of ethanol;
9 (4) E-30 means ethanol blended gasoline formulated with a percentage
10 of thirty percent by volume of ethanol;
11 (5) E-85 means ethanol blended gasoline formulated with a percentage
12 of fifty-one percent to eighty-three percent by volume of ethanol;
13 (6) Motor fuel pump means a meter or similar commercial weighing and
14 measuring device used to measure and dispense motor fuel originating from
15 a motor fuel storage tank;
16 (7) Retail dealer means a person engaged in the business of storing
17 and dispensing motor fuel from a motor fuel pump for sale on a retail
18 basis;
19 (8) Retail motor fuel site means a geographic location in this state
20 where a retail dealer sells and dispenses motor fuel from a motor fuel
21 pump on a retail basis; and
22 (9) Taxpayer means any natural person or any limited liability
23 company, partnership, private domestic or private foreign corporation, or
24 domestic or foreign nonprofit corporation certified pursuant to section
25 501(c)(3) of the Internal Revenue Code of 1986, as amended.
26 Sec. 3. (1) Any taxpayer who is a retail dealer and who sold and
27 dispensed E-15 or higher blend on a retail basis during the prior
28 calendar year through a motor fuel pump located at the taxpayer's retail
29 motor fuel site shall be eligible to receive tax credits under the
30 Nebraska Higher Blend Tax Credit Act.
31 (2) The tax credit shall be in an amount equal to (a) three cents
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1 multiplied by the total number of gallons of E-15 sold by the taxpayer on
2 a retail basis during the prior calendar year through a motor fuel pump
3 located at the taxpayer's retail motor fuel site and (b) five cents
4 multiplied by the total number of gallons of E-25 or higher blend sold by
5 the taxpayer on a retail basis during the prior calendar year through a
6 motor fuel pump located at the taxpayer's retail motor fuel site.
7 (3) The tax credit shall be a refundable credit that may be used
8 against any income tax imposed by the Nebraska Revenue Act of 1967 or any
9 tax imposed pursuant to sections 77-907 to 77-918 or 77-3801 to 77-3807.
10 (4) Tax credits allowed under this section may be claimed for
11 taxable years beginning or deemed to begin on or after January 1, 2021,
12 under the Internal Revenue Code of 1986, as amended.
13 (5) To receive tax credits, a taxpayer shall submit an application
14 to the department on a form prescribed by the department. The application
15 shall include the following information:
16 (a) The name and address of the taxpayer;
17 (b) The total number of gallons of E-15 sold by the taxpayer on a
18 retail basis during the prior calendar year through a motor fuel pump
19 located at the taxpayer's retail motor fuel site;
20 (c) The total number of gallons of E-25 sold by the taxpayer on a
21 retail basis during the prior calendar year through a motor fuel pump
22 located at the taxpayer's retail motor fuel site;
23 (d) The total number of gallons of E-30 sold by the taxpayer on a
24 retail basis during the prior calendar year through a motor fuel pump
25 located at the taxpayer's retail motor fuel site;
26 (e) The total number of gallons of E-85 sold by the taxpayer on a
27 retail basis during the prior calendar year through a motor fuel pump
28 located at the taxpayer's retail motor fuel site; and
29 (f) Any other documentation required by the department.
30 Sec. 4. (1) If the department determines that an application is
31 complete and that the taxpayer qualifies for tax credits, the department
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1 shall approve the application within the limits set forth in this section
2 and shall certify the amount of tax credits approved to the taxpayer.
3 (2) The department shall consider applications in the order in which
4 they are received and may approve up to two million dollars in tax
5 credits in any calendar year.
6 Sec. 5. (1) A taxpayer shall claim the tax credit by attaching the
7 tax credit certification received from the department under section 4 of
8 this act to the taxpayer's tax return.
9 (2) Any credit in excess of the taxpayer's tax liability shall be
10 refunded to the taxpayer. In lieu of claiming a refund, the taxpayer may
11 elect to have the excess carried forward to subsequent taxable years. A
12 taxpayer may carry forward the excess tax credits until fully utilized.
13 Sec. 6. Any tax credit allowable to a partnership, a limited
14 liability company, a subchapter S corporation, or an estate or trust may
15 be distributed to the partners, limited liability company members,
16 shareholders, or beneficiaries in the same manner as income is
17 distributed.
18 Sec. 7. There shall be no new applications filed under the Nebraska
19 Higher Blend Tax Credit Act after December 31, 2025. All applications and
20 all tax credits pending or approved before such date shall continue in
21 full force and effect.
22 Sec. 8. The department may adopt and promulgate rules and
23 regulations to carry out the Nebraska Higher Blend Tax Credit Act.
24 Sec. 9. Section 77-908, Reissue Revised Statutes of Nebraska, is
25 amended to read:
26 77-908 Every insurance company organized under the stock, mutual,
27 assessment, or reciprocal plan, except fraternal benefit societies, which
28 is transacting business in this state shall, on or before March 1 of each
29 year, pay a tax to the director of one percent of the gross amount of
30 direct writing premiums received by it during the preceding calendar year
31 for business done in this state, except that (1) for group sickness and
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1 accident insurance the rate of such tax shall be five-tenths of one
2 percent and (2) for property and casualty insurance, excluding individual
3 sickness and accident insurance, the rate of such tax shall be one
4 percent. A captive insurer authorized under the Captive Insurers Act that
5 is transacting business in this state shall, on or before March 1 of each
6 year, pay to the director a tax of one-fourth of one percent of the gross
7 amount of direct writing premiums received by such insurer during the
8 preceding calendar year for business transacted in the state. The taxable
9 premiums shall include premiums paid on the lives of persons residing in
10 this state and premiums paid for risks located in this state whether the
11 insurance was written in this state or not, including that portion of a
12 group premium paid which represents the premium for insurance on Nebraska
13 residents or risks located in Nebraska included within the group when the
14 number of lives in the group exceeds five hundred. The tax shall also
15 apply to premiums received by domestic companies for insurance written on
16 individuals residing outside this state or risks located outside this
17 state if no comparable tax is paid by the direct writing domestic company
18 to any other appropriate taxing authority. Companies whose scheme of
19 operation contemplates the return of a portion of premiums to
20 policyholders, without such policyholders being claimants under the terms
21 of their policies, may deduct such return premiums or dividends from
22 their gross premiums for the purpose of tax calculations. Any such
23 insurance company shall receive a credit on the tax imposed as provided
24 in the Community Development Assistance Act, the Nebraska Job Creation
25 and Mainstreet Revitalization Act, the New Markets Job Growth Investment
26 Act, the Nebraska Higher Blend Tax Credit Act, and the Affordable Housing
27 Tax Credit Act.
28 Sec. 10. Section 77-2715.07, Revised Statutes Cumulative Supplement,
29 2020, is amended to read:
30 77-2715.07 (1) There shall be allowed to qualified resident
31 individuals as a nonrefundable credit against the income tax imposed by
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1 the Nebraska Revenue Act of 1967:
2 (a) A credit equal to the federal credit allowed under section 22 of
3 the Internal Revenue Code; and
4 (b) A credit for taxes paid to another state as provided in section
5 77-2730.
6 (2) There shall be allowed to qualified resident individuals against
7 the income tax imposed by the Nebraska Revenue Act of 1967:
8 (a) For returns filed reporting federal adjusted gross incomes of
9 greater than twenty-nine thousand dollars, a nonrefundable credit equal
10 to twenty-five percent of the federal credit allowed under section 21 of
11 the Internal Revenue Code of 1986, as amended, except that for taxable
12 years beginning or deemed to begin on or after January 1, 2015, such
13 nonrefundable credit shall be allowed only if the individual would have
14 received the federal credit allowed under section 21 of the code after
15 adding back in any carryforward of a net operating loss that was deducted
16 pursuant to such section in determining eligibility for the federal
17 credit;
18 (b) For returns filed reporting federal adjusted gross income of
19 twenty-nine thousand dollars or less, a refundable credit equal to a
20 percentage of the federal credit allowable under section 21 of the
21 Internal Revenue Code of 1986, as amended, whether or not the federal
22 credit was limited by the federal tax liability. The percentage of the
23 federal credit shall be one hundred percent for incomes not greater than
24 twenty-two thousand dollars, and the percentage shall be reduced by ten
25 percent for each one thousand dollars, or fraction thereof, by which the
26 reported federal adjusted gross income exceeds twenty-two thousand
27 dollars, except that for taxable years beginning or deemed to begin on or
28 after January 1, 2015, such refundable credit shall be allowed only if
29 the individual would have received the federal credit allowed under
30 section 21 of the code after adding back in any carryforward of a net
31 operating loss that was deducted pursuant to such section in determining
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1 eligibility for the federal credit;
2 (c) A refundable credit as provided in section 77-5209.01 for
3 individuals who qualify for an income tax credit as a qualified beginning
4 farmer or livestock producer under the Beginning Farmer Tax Credit Act
5 for all taxable years beginning or deemed to begin on or after January 1,
6 2006, under the Internal Revenue Code of 1986, as amended;
7 (d) A refundable credit for individuals who qualify for an income
8 tax credit under the Angel Investment Tax Credit Act, the Nebraska
9 Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research
10 and Development Act, or the Volunteer Emergency Responders Incentive Act;
11 and
12 (e) A refundable credit equal to ten percent of the federal credit
13 allowed under section 32 of the Internal Revenue Code of 1986, as
14 amended, except that for taxable years beginning or deemed to begin on or
15 after January 1, 2015, such refundable credit shall be allowed only if
16 the individual would have received the federal credit allowed under
17 section 32 of the code after adding back in any carryforward of a net
18 operating loss that was deducted pursuant to such section in determining
19 eligibility for the federal credit.
20 (3) There shall be allowed to all individuals as a nonrefundable
21 credit against the income tax imposed by the Nebraska Revenue Act of
22 1967:
23 (a) A credit for personal exemptions allowed under section
24 77-2716.01;
25 (b) A credit for contributions to certified community betterment
26 programs as provided in the Community Development Assistance Act. Each
27 partner, each shareholder of an electing subchapter S corporation, each
28 beneficiary of an estate or trust, or each member of a limited liability
29 company shall report his or her share of the credit in the same manner
30 and proportion as he or she reports the partnership, subchapter S
31 corporation, estate, trust, or limited liability company income;
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1 (c) A credit for investment in a biodiesel facility as provided in
2 section 77-27,236;
3 (d) A credit as provided in the New Markets Job Growth Investment
4 Act;
5 (e) A credit as provided in the Nebraska Job Creation and Mainstreet
6 Revitalization Act;
7 (f) A credit to employers as provided in section 77-27,238; and
8 (g) A credit as provided in the Affordable Housing Tax Credit Act.
9 (4) There shall be allowed as a credit against the income tax
10 imposed by the Nebraska Revenue Act of 1967:
11 (a) A credit to all resident estates and trusts for taxes paid to
12 another state as provided in section 77-2730;
13 (b) A credit to all estates and trusts for contributions to
14 certified community betterment programs as provided in the Community
15 Development Assistance Act; and
16 (c) A refundable credit for individuals who qualify for an income
17 tax credit as an owner of agricultural assets under the Beginning Farmer
18 Tax Credit Act for all taxable years beginning or deemed to begin on or
19 after January 1, 2009, under the Internal Revenue Code of 1986, as
20 amended. The credit allowed for each partner, shareholder, member, or
21 beneficiary of a partnership, corporation, limited liability company, or
22 estate or trust qualifying for an income tax credit as an owner of
23 agricultural assets under the Beginning Farmer Tax Credit Act shall be
24 equal to the partner's, shareholder's, member's, or beneficiary's portion
25 of the amount of tax credit distributed pursuant to subsection (6) of
26 section 77-5211.
27 (5)(a) For all taxable years beginning on or after January 1, 2007,
28 and before January 1, 2009, under the Internal Revenue Code of 1986, as
29 amended, there shall be allowed to each partner, shareholder, member, or
30 beneficiary of a partnership, subchapter S corporation, limited liability
31 company, or estate or