2010 Nebraska Legislative Tax Changes


by Matt Ottemann

Ottemann, Matthew
mottemann@mcgrathnorth.com
(402) 341-3070

The following is a summary of key changes to Nebraska’s tax laws passed by the Nebraska Legislature in its 2010 session:

Income Tax

  • Electronic Submission Of Wage And Tax Statements. For wage and tax statements (including W-2, 1099-R, and 1099-MISC) due after January 1, 2011, the State shall require an employer who issues more than 50 W-2s in a year to file such statements electronically.
  • Filing Deadline For Wage And Tax Statements. Effective January 1, 2011, for wage and tax statements (including W-2, 1099-R, and 1099-MISC) due after January 1, 2011, all employers must file them with the Tax Commissioner by February 1st, rather than March 15th.
  • Interest Payments On Income Tax Refunds.  Effective January 1, 2011, for individual income tax returns due on or after January 1, 2011, no interest will be paid on overpayments of income tax unless the taxpayer electronically filed its return with the State of Nebraska.
  • Decisions On Protested Refund Claims. Effective October 1, 2010, the decision of the Tax Commissioner to disallow an income tax refund claim will become final 30 days after the mailing of the notice denying the claim, unless the taxpayer seeks a judicial review of the decision.  Currently, a taxpayer has sixty days to appeal the Commissioner’s decision.

Nebraska Advantage Act Incentives

  • Materials Purchased By Contractors. For applications filed on or after July 15, 2010, the Department will assume that 50% of the contract price includes both building materials and equipment on which sales tax is due if the contract includes property annexed to real estate and property incorporated into real estate. For contracts solely for annexed property which is not incorporated into real estate, the contractor and subcontractors must provide the percentage of the contract price that represents the cost of materials. Taxpayers with applications prior to July 15, 2010 may make a one time election to use the 50% estimate of materials.
  • Cloud Computing. For applications filed on or after July 15, 2010, any business involved in the qualifying business activities of software development, computer systems design, product testing, guidance and surveillance systems design, or licensing of technology may include access to such services over the internet when determining if at least 75% of such services, systems, or products are either sold to the federal government or to customers located outside Nebraska. Previously, cloud computing services were not specifically included in the 75% requirement.
  • Taxpayer Definition. For applications filed on or after July 15, 2010, an applicant for Nebraska Advantage incentives may not include any partnership, LLC, cooperative or joint venture where 20% or more is owned by political subdivisions or charitable organizations.  Previously, the limit for such ownership was 10% or more.
  • Tier 2 Property Tax Exemption. For applications filed on or after July 15, 2010, a taxpayer who meets the required levels of employment and investment for a Tier 2 project ($3 million investment and 30 new employees) for an Internet web-portal or data center project is entitled to a personal property tax exemption on purchases of computer systems and peripherals used at the project.

Property Assessment

  • Property Tax Exemption For Wind Energy Generation Facilities. Effective July 15, 2010, any personal property used directly in the generation of electricity using wind as the fuel source, such as wind turbines, routers and blades, will be exempt from property tax.
  • Property Tax Exemption Application Deadline. Effective January 1, 2011, educational, religious, and charitable organizations that acquire or convert taxable property to an exempt use after January 1, now have until July 1 (instead of August 1), to apply for an exemption on real and personal property.
  • Appeal Of County Board Of Equalization Decisions. Effective April 14, 2010, besides the County Assessor, the Tax Commissioner and the Property Tax Administrator may appeal a County Board of Equalization’s final decision approving or denying an exemption of real or personal property to the Tax Equalization and Review Commission.

Miscellaneous

  • Delinquent Taxpayer Website. Effective July 15, 2010, the Department of Revenue may post to its website a list of delinquent taxpayers who owe taxes or fees in excess of $20,000 and for which a notice of lien has been filed. The website may include delinquencies for tax programs administered by the Department of Revenue. Taxpayers will be notified at least 30 days before their names are posted to the website.
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