2026 NEBRASKA TAX AND INCENTIVE UPDATES A STATE TAX BRIEFING BY NICK NIEMANN AND MATT OTTEMANN, McGRATH NORTH LAW FIRM Although the 2026 Nebraska Legislative Session did not produce as many tax law changes as some policymakers had anticipated, lawmakers still enacted several significant measures affecting sales and use taxes, tax incentives, administrative enforcement practices, property tax procedures, and economic development. The session also included revisions to Nebraska’s Foreign Adversarial Company law and several new taxes and tax rate increases. Together, these measures reflect Nebraska’s continuing efforts to modernize revenue collection, refine economic development incentives, improve property tax transparency, and address emerging policy concerns. The following summarizes the most significant changes and their implications for Nebraska taxpayers and tax professionals. LB 803: FIRST-TIME HOMEBUYER SAVINGS ACCOUNTS AND PROPERTY TAX PROCEDURES Beginning in 2027, Nebraska will allow first-time homebuyers to establish tax-advantaged savings accounts to help them purchase or construct a primary residence in Nebraska. Qualified expenses include down payments, closing costs, appraisal and inspection fees, mortgage origination fees, and other financing costs associated with acquiring or building a home. Annual contributions are limited to $5,000 for individuals and $10,000 for joint filers, with lifetime contribution limits of $25,000 and $50,000, respectively. Contributions, along with interest and investment earnings, are deductible for Nebraska income tax purposes, although tax benefits may be recaptured if funds are not ultimately used for qualified expenses. LB 803 also revised Nebraska’s property tax notice and hearing procedures. County assessors must continue mailing notices of changed valuations by June 1 whenever assessed values differ from the prior year. In addition, counties, cities, and school districts levying property taxes within a county must now participate in joint public hearings between July 1 and July 15. Representatives from each taxing authority, including at least one voting member from each governing body and the county assessor, are required to attend and discuss preliminary budget information. These changes are intended to improve transparency and public understanding of local budgeting and property tax decisions. LB 901: NEBRASKA’S COMPREHENSIVE TAX PACKAGE LB 901 was the Legislature’s primary tax bill and included broad changes to tax exemptions, Department of Revenue administration, economic development incentives, and tax collection procedures. Sales and Use Tax Changes The legislation repealed several existing sales and use tax exemptions, including exemptions involving certain community-based energy development projects, mineral oil used as a grain dust suppressant, research biochips, certain nonprofit transfers, game birds, and certain data center property used outside Nebraska. It also eliminated a personal property tax exemption for equipment temporarily brought into Nebraska for assembly before being shipped elsewhere. In addition, beginning with applications filed on or after July 1, 2026, waste treatment and disposal businesses will no longer qualify for incentives under the ImagiNE Nebraska Act. Department of Revenue Administration LB 901 significantly expanded the Department of Revenue’s administrative authority by authorizing new assessment, 13 nescpa.org
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