LB79 LB79
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 79
Introduced by Erdman, 47; Brewer, 43; Clements, 2; Halloran, 33;
McDonnell, 5; Murman, 38.
Read first time January 05, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 13-319, 13-501, 13-2813, 18-2147, 77-27,148, 77-3507, and 85-2231,
3 Reissue Revised Statutes of Nebraska, and sections 77-201, 77-2004,
4 77-2005, 77-2006, 77-2701, 77-3506, 77-3508, 77-6406, 77-6827, and
5 79-1001, Revised Statutes Cumulative Supplement, 2022; to adopt the
6 Nebraska EPIC Option Consumption Tax Act; to terminate the Nebraska
7 Budget Act, tax-increment financing, the property tax, the
8 inheritance tax, sales and use taxes, the income tax, the homestead
9 exemption, the Tax Equity and Educational Opportunities Support Act,
10 and the Community College Aid Act as prescribed; to change an
11 application deadline under the ImagiNE Nebraska Act; and to repeal
12 the original sections.
13 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 54 of this act shall be known and may be
2 cited as the Nebraska EPIC Option Consumption Tax Act, where the acronym
3 EPIC stands for the elimination of property, income, and corporate taxes.
4 Sec. 2. For purposes of the Nebraska EPIC Option Consumption Tax
5 Act:
6 (1) Affiliated firms means two or more firms that are affiliated
7 with each other. A firm is affiliated with another if one firm owns fifty
8 percent or more of:
9 (a) The voting shares in a corporation; or
10 (b) The capital interests of a business firm that is not a
11 corporation;
12 (2) Consumption tax means the tax imposed pursuant to the Nebraska
13 EPIC Option Consumption Tax Act;
14 (3) Designated commercial private courier service means a firm
15 designated as such by the Tax Commissioner, upon application by the firm,
16 if the firm:
17 (a) Provides its services to the general public; and
18 (b) Records electronically to its database kept in the regular
19 course of its business the date on which an item was given to such firm
20 for delivery;
21 (4) Education and training means tuition for primary, secondary, or
22 postsecondary level education and job-related training courses. Such term
23 does not include room, board, sports activities, recreational activities,
24 hobbies, games, arts or crafts, or cultural activities;
25 (5) Groceries means food items purchased for personal human
26 consumption;
27 (6) Gross payments means payments for taxable property or services,
28 including taxes imposed in the Nebraska EPIC Option Consumption Tax Act;
29 (7)(a) Intangible property includes copyrights, trademarks, patents,
30 goodwill, financial instruments, securities, commercial paper, debts,
31 notes and bonds, and other property deemed intangible by common law.
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1 (b) Intangible property does not include tangible personal property
2 or rents or leaseholds of any term thereon, real property or rents or
3 leaseholds of any term thereon, or computer software;
4 (8) Person means any individual, association, estate, trust,
5 partnership, corporation, or other entity of any kind;
6 (9)(a) Produce, provide, render, or sell taxable property or
7 services shall have the following meaning: A taxable property or service
8 is something used to produce, provide, render, or sell a taxable property
9 or service if such property or service is purchased by a person engaged
10 in a trade or business for the purpose of employing or using such taxable
11 property or service in the production, provision, rendering, or sale of
12 other taxable property or services in the ordinary course of that trade
13 or business.
14 (b) Taxable property or services used in a trade or business for the
15 purposes of research, experimentation, testing, and development shall be
16 treated as used to produce, provide, render, or sell taxable property or
17 services.
18 (c) Taxable property or services purchased by an insurer on behalf
19 of an insured shall be treated as used to produce, provide, render, or
20 sell taxable property or services if the premium for the insurance
21 contract giving rise to the insurer's obligation was subject to tax
22 pursuant to section 27 of this act.
23 (d) Education and training shall be treated as services used to
24 produce, provide, render, or sell taxable property or services;
25 (10) Registered seller means a person registered pursuant to section
26 11 of this act;
27 (11) Responsible officers and partners means:
28 (a) In the case of a corporation, any officer who is the president,
29 the chief executive officer, a vice-president, the secretary, the
30 treasurer, or the chief financial officer or who serves a similar
31 function for the corporation;
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1 (b) In the case of a partnership, any partner other than limited
2 partners; or
3 (c) In the case of a limited liability company, any officer serving
4 the function of a corporate president or chief executive officer,
5 treasurer or chief financial officer, or secretary and any member
6 actively engaged in the management of the company;
7 (12) Tax Commissioner means the Tax Commissioner of the State of
8 Nebraska;
9 (13) Tax inclusive fair market value means the fair market value of
10 taxable property or services plus the tax imposed by the Nebraska EPIC
11 Option Consumption Tax Act;
12 (14) Taxable employer includes:
13 (a) Any household employing domestic servants; and
14 (b) Any government except for government enterprises as defined in
15 section 25 of this act;
16 (15)(a) Taxable property or service means:
17 (i) Any property, including leaseholds of any term or rents with
18 respect to such property, but excluding:
19 (A) Intangible property; and
20 (B) Used property; and
21 (ii) Any service, including any financial intermediation services as
22 defined in section 27 of this act.
23 (b) For purposes of subdivision (15)(a) of this section, the term
24 service:
25 (i) Shall include any service performed by an employee for which the
26 employee is paid wages or a salary by a taxable employer; and
27 (ii) Shall not include any service performed by an employee for
28 which the employee is paid wages or a salary:
29 (A) By an employer in the regular course of the employer's trade or
30 business;
31 (B) By an employer that is a not-for-profit organization as defined
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1 in section 26 of this act;
2 (C) By an employer that is a government enterprise as defined in
3 section 25 of this act; or
4 (D) By taxable employers to employees directly providing education
5 and training;
6 (16) Used property means:
7 (a) Property on which the tax imposed by the Nebraska EPIC Option
8 Consumption Tax Act has already been collected and for which no credit
9 has been allowed;
10 (b) Property that was held other than for a business purpose in a
11 trade or business, as defined in subdivision (2)(b) of section 8 of this
12 act, on December 31, 2025;
13 (c) Property that a business has been using but intends to dispose
14 of; or
15 (d) Property owned by a private citizen prior to January 1, 2026;
16 and
17 (17) Wage or salary means all compensation paid for employment
18 service, including cash compensation, employee benefits, disability
19 insurance, wage replacement insurance payments, unemployment compensation
20 insurance, workers' compensation insurance, and the fair market value of
21 any other consideration paid by an employer to an employee in
22 consideration for employment services rendered.
23 Sec. 3. (1) The state income tax imposed pursuant to the Nebraska
24 Revenue Act of 1967 is hereby repealed effective at the end of the day on
25 December 31, 2025. The Department of Revenue may collect taxes due from
26 2025 during calendar year 2026, but income earned in 2026 shall not be
27 subject to the income tax.
28 (2) The state sales and use tax imposed pursuant to the Nebraska
29 Revenue Act of 1967 and all local sales and use taxes imposed pursuant to
30 the Local Option Revenue Act, the Qualified Judgment Payment Act, and
31 sections 13-319 and 13-2813 are hereby repealed effective at the end of
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1 the day on December 31, 2025. The Department of Revenue may collect sales
2 and use taxes due from 2025 during calendar year 2026, but no sales and
3 use taxes shall be imposed on purchases of goods and services beginning
4 January 1, 2026.
5 Sec. 4. The property tax imposed pursuant to Chapter 77 is hereby
6 repealed effective at the end of the day on December 31, 2025. Property
7 taxes due from 2025 may be collected during calendar year 2026, but no
8 property taxes shall be imposed on real or personal property beginning
9 January 1, 2026.
10 Sec. 5. The inheritance tax imposed pursuant to sections 77-2001 to
11 77-2040 is hereby repealed effective at the end of the day on December
12 31, 2025. Inheritance taxes due from 2025 may be collected during
13 calendar year 2026, but no inheritance taxes shall be imposed on a
14 deceased person's estate beginning January 1, 2026.
15 Sec. 6. This section establishes the Nebraska Taxpayer's Bill of
16 Rights, which shall apply beginning January 1, 2026, and shall include
17 the following:
18 (1) The citizens of Nebraska are entitled to a fair and just tax
19 system, one which favors neither the poor nor the rich, neither rural
20 dwellers nor urban dwellers, neither business owners nor laborers, and
21 that is no respecter of race, religion, creed, or sex;
22 (2) The State of Nebraska shall never impose a tax on the income of
23 its citizens, whether such income tax be of a personal nature or of a
24 corporate nature;
25 (3) The State of Nebraska shall never impose a tax on the property
26 already owned by its citizens, regardless of whether such property is
27 real or personal, tangible or intangible;
28 (4) The State of Nebraska shall never impose a tax on the estate of
29 a deceased person or the inheritance of the heirs of a deceased person;
30 (5) Because the consumption tax manifests a security against
31 government excess, it shall be preferred above all other tax systems in
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1 the State of Nebraska;
2 (6) The Department of Revenue shall be subject to the citizens of
3 the State of Nebraska by readily correcting errors of taxation and
4 granting temporary relief to registered sellers suffering hardship due to
5 the burden of paying taxes;
6 (7) No service or new good shall ever be subjected to more than one
7 kind of tax by the State of Nebraska or any political subdivision
8 thereof;
9 (8) The State of Nebraska and any political subdivision thereof
10 shall be strictly prohibited from imposing a tax on groceries purchased
11 for off-premises consumption;
12 (9) The State of Nebraska and any political subdivision thereof
13 shall be strictly prohibited from imposing a tax on services or materials
14 used to manufacture products, including agricultural products, for sale
15 to the general public or to enhance services for sale to the general
16 public; and
17 (10) The State of Nebraska shall live within its revenue means in
18 the same way that a citizen lives within his or her revenue means.
19 Sec. 7. (1) Beginning January 1, 2026, there is hereby imposed a
20 tax on the use or consumption in the State of Nebraska of taxable
21 property or services.
22 (2) The rate of the consumption tax shall be seven and one-half
23 percent until changed by the Legislature.
24 (3) The person purchasing taxable property or services in the State
25 of Nebraska shall be liable for the tax.
26 (4) Except as otherwise provided in this section, the tax shall be
27 collected by the registered seller. The tax shall constitute a part of
28 the purchase price and until collected shall be a debt from the purchaser
29 to the registered seller. The tax required to be collected by the
30 registered seller from the purchaser constitutes a debt owed by the
31 registered seller to the State of Nebraska.
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1 (5) The registered seller shall, at the time of making the sale,
2 collect any tax which may be due from the purchaser and shall give to the
3 purchaser, upon request, a receipt therefor in the manner and form
4 prescribed by the Nebraska EPIC Option Consumption Tax Act.
5 (6) In order to prevent evasion of the consumption tax, it shall be
6 presumed that all gross payments from sales by registered sellers are
7 subject to the tax until the contrary is established. The burden of
8 proving that a sale is not a taxable sale is upon the registered seller
9 who makes the sale unless he or she takes and records from the purchaser
10 a tax-exempt certificate identification number.
11 (7) The Tax Commissioner, in order to enforce and facilitate the
12 proper administration of the consumption tax, may designate such person
13 or persons as he or she may deem necessary to be tax collectors and
14 delegate to such persons such authority as is necessary to collect any
15 such tax which is due and payable to the State of Nebraska. The Tax
16 Commissioner may require of all persons so designated a surety bond in
17 favor of the State of Nebraska to insure against any misappropriation of
18 state funds so collected. The Tax Commissioner may require any tax
19 official, city, county, or state, to collect the tax on behalf of the
20 state. All persons designated to or required to collect the tax shall
21 account for such collections in the manner prescribed by the Tax
22 Commissioner. Nothing in this subsection shall be so construed as to
23 prevent the Tax Commissioner or his or her employees from collecting any
24 taxes due and payable to the State of Nebraska.
25 (8) In the sale of new automobiles, trucks, trailers, semitrailers,
26 and truck-tractors as defined in the Motor Vehicle Registration Act, the
27 consumption tax shall be paid to the county treasurer of the county where
28 the transaction took place. In the rental or lease of automobiles,
29 trucks, trailers, semitrailers, and truck-tractors as defined in the
30 Motor Vehicle Registration Act, the consumption tax shall be collected by
31 the lessor on the rental or lease price.
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1 (9) In the case of taxable property or services purchased outside of
2 the State of Nebraska and brought into