April 12, 2024
Nebraska Proposed New 7.5% Gross Receipts Tax on Advertising Services
Authored by: Emilia Jarrin and Penny Sweeting, CPA
Nebraska proposed Bill LB388 to implement a new gross receipts tax on advertising services. Previous bills (LB1310 and LB1354) creating an Advertising Services Tax Act never passed the Revenue Committee. The new bill combines the gross receipts tax with property tax reform. The Act will impose a tax on companies operating in Nebraska whose combined gross advertising revenue exceeds one billion dollars. If passed, the Nebraska tax would apply to all forms of advertising services, including digital ads. The proposed gross receipts tax rate is 7.5% on the “assessable base.” The Act defines “assessable base” as the “portion of gross advertising revenue that is derived from sales to customers where services are delivered within Nebraska.” For sourcing, gross revenue from digital advertising is considered within Nebraska if it is received on a user’s device with an IP address located within Nebraska.
If you have questions about state digital advertising taxes, please reach out to a member of the Withum SALT Team.
September 7, 2023
Nebraska Adopts an Elective Pass-Through Entity Tax
Authored by: Jessie Racioppi and Jonathan Weinberg, JD, LLM, Principal
Nebraska Department of Revenue Legislation Bill 754 (LB754) enables eligible partnerships and S corporations to make an irrevocable pass-through entity tax election. Under LB754, taxpayers may make retroactive elections for tax years back to January 1, 2018. For tax years beginning on or after January 1, 2023, the election must be made prior to the filing due date of the income tax return, including any extensions. Pass-Through Entity Tax (PTET) elections must be uploaded to the Nebraska Department of Revenue website.
Eligible partnerships include any entity, including limited liability corporations, treated as a partnership for federal tax purposes and are not publicly traded. An eligible S corporation includes any entity that is subject to tax under Internal Revenue Code Subchapter S.
If you have questions about making Pass-Through Entity Tax elections, please reach out to a member of the Withum SALT Team.
July 29, 2022
Nebraska High Court Rejects Trade-In Sales Tax Credit Argument
Authored by: Brandon Vance and Bonnie Susmano,JD, MBA
In Nebraska, Gelco Fleet Trust (Gelco), a fleet management company, appealed to the court that they were entitled to a trade-in sales tax credit on the purchase of a new vehicle from CTC of Virginia (CTC). In August of 2019, Gelco sold a Chevrolet Equinox with the certificate of title showing CTC as the buyer. However, further documentation shows that the vehicle was sold at an auction house, then later purchased by CTC. In October of that same year, Gelco purchased a GMC Terrain from CTC. Gelco submitted a sales tax refund claim for $749.93 for the GMC purchase. Gelco argued that the sales price should have been reduced by the trade-in credit for the Equinox.
The Nebraska High Court upheld the decision of refusal to furnish the refund. Their reason for refusal was that the trade-in did not occur at the time of the Terrain sale. The Court determined that for a credit to be granted, both vehicles needed to be included in the same transaction. In the case at issue, the vehicles were sold in two separate transactions and therefore no sales tax refund would be granted.
April 29, 2022
Nebraska Implements Corporate Income Tax Rate Reductions
On April 13, 2022, Governor Rickets signed L.B. 873 which reduces Nebraska’s corporate income tax rate over the next five years. This will apply to corporate taxpayers with taxable income exceeding $100,000 for taxable years beginning on or after January 1, 2022, through taxable years beginning on or after January 1, 2027. The phased rate reductions are as follows:
- For taxable years beginning 2022, the top corporate tax rate is 7.5%;
- For taxable years beginning 2023, the top corporate tax rate is 7.25%;
- For taxable years beginning 2024, the top corporate tax rate is 6.50%;
- For taxable years beginning 2025, the top corporate tax rate is 6.24%;
- For taxable years beginning 2026, the top corporate tax rate is 6.00%; and
- For taxable years beginning 2027 and after, the top corporate tax rate will be reduced to 5.84%.
April 3, 2020
Nebraska Update on Extension of Filing Deadline
The Department of Revenue has alerted taxpayers that it is following the federal extension for the 2020 individual income tax return and payments. The return and payment deadlines are extended to May 17, 2021. However, the extension does not apply to estimated tax payments. ( Notice: Nebraska to Follow IRS Extending Individual Income Tax Filing Date, Neb. Dept. of Revenue, 03/19/2021 .)
April 3, 2020
Tax Filing and Deadline Extended
Nebraskans will have until July 15, 2020 to pay state income taxes to give additional flexibility to those impacted by COVID-19. Nebraskans who are not impacted by the virus should consider filing by the traditional April 15th date. State income tax payments and estimated payments that were originally due on April 15, 2020. The Tax Commissioner may grant penalty or interest relief upon request depending on individual circumstances.
