collection, protest, and application fees. Beginning July 1, 2026, the Department may impose collection and assessment fees generally equal to the greater of $25 or 10% of the tax liability. New filing fees also apply to protests of tax assessments, requests to waive interest or penalties, and tax sale certificate clearance applications. Beginning in 2027, these fees will be adjusted periodically for inflation. The legislation also strengthens the Department’s collection authority by allowing additional costs to be added to delinquent tax liabilities and authorizing the Tax Commissioner to register certain delinquent tax claims as judgments in Lancaster County District Court. Together, these provisions increase the financial consequences for taxpayers who fail to resolve outstanding tax liabilities. LB 901 also authorizes the Department of Revenue and the Department of Health and Human Services to share otherwise confidential information when necessary to administer their respective programs. LB 1165: GROW THE GOOD LIFE ACT LB 1165 created the Grow the Good Life Act, a targeted economic development program intended to encourage major Nebraska employers to retain headquarters operations and workforce following mergers or business combinations with large out-of-state companies. To qualify, employers generally must have maintained headquarters in Nebraska for at least 10 years, employed more than 3,000 Nebraska workers before the transaction, retain at least 90% of their Nebraska workforce, and otherwise qualify under the ImagiNE Nebraska Act. Applications may be submitted to the Department of Economic Development from Jan. 1, 2027, through May 31, 2029. Approved employers may earn wage retention credits equal to 5% of qualifying compensation paid to retained Nebraska employees earning at least the statewide average wage. Credits are subject to annual and statewide caps and may offset either Nebraska income tax or withholding tax liabilities. The program also authorizes workforce retention and attraction grants of up to $300,000 for economic development organizations assisting qualifying employers. CHANGES TO THE IMAGINE NEBRASKA ACT LB 1165 also made several significant revisions to the ImagiNE Nebraska Act. One of the most notable changes allows businesses with ImagiNE agreements to use earned tax credits to pay up to 50% of employees’ dependent childcare expenses. Unlike several other provisions, this benefit is immediately available to all businesses operating under existing ImagiNE agreements, regardless of application date. The legislation increased wage credit percentages for several qualifying projects, including increasing rural manufacturing credits from 6% to 7% and urban manufacturing credits from 4% to 5%. Quality Jobs projects may qualify for credits ranging from 6% to 10%, depending on average wage levels. Investment credits for qualifying manufacturing projects also increased from 4% to 5% for investments under $10 million and from 7% to 8% once qualified investment exceeds $10 million. Businesses qualifying under the Grow the Good Life Act that create at least 500 Nebraska positions paying at least $100,000 annually may receive additional 1% wage and investment credits for eligible new or relocated employees. LB 1165 also modified the Nebraska Advantage Act by extending the attainment period for certain Tier 6 projects while imposing a new application fee. LB 1096: FOREIGN ADVERSARIAL COMPANY REVISIONS LB 1096 amended Nebraska’s Foreign Adversarial Company (FAC) law, originally enacted in 2025. The law continues to prohibit qualifying foreign adversarial companies from receiving benefits under numerous Nebraska incentive programs, including the Nebraska Advantage Act, ImagiNE Nebraska Act, Rural Development Act, Urban Redevelopment Act, Nebraska Advantage Research and Development Act, and Nebraska Relocation Incentive Act. The legislation narrows the FAC definition by removing parent-company status as an automatic basis for disqualification. As a result, a parent company is no longer automatically ineligible because one of its subsidiaries qualifies as a Foreign Adversarial Company. However, incentive benefits must still be apportioned to ensure foreign adversarial affiliates do not receive prohibited tax benefits. LB 1096 also clarifies that direct or indirect ownership, operation, or control by a foreign adversarial government may result in FAC status. Despite these revisions, significant concerns remain. The law continues to create uncertainty because even relatively small ownership interests by foreign adversarial entities may affect eligibility for Nebraska incentives. Questions also remain regarding the treatment of previously executed incentive agreements, an issue that many businesses believe creates uncertainty for Nebraska’s business climate. NEW TAXES AND TAX RATE INCREASES The Legislature also enacted several new taxes and tax rate increases. Beginning Oct. 1, 2026, LB 815 subjects dyed diesel fuel to a motor fuel tax of one-quarter cent per gallon. LB 838 imposes a 25% excise tax on certain remittance transfers to residents of China, Russia, Iran, and North Korea. Beginning Jan. 1, 2027, LB 901 imposes a 10% excise tax on retail sales of kratom products. The tax applies in addition to existing sales and other applicable taxes. LB 1067 temporarily increases Nebraska’s documentary stamp tax from $2.32 to $3.32 through Jan. 1, 2032. Additional revenue generated by the increase will support the Rural Workforce Housing Investment Fund and the Middle-Income Workforce Housing Development Fund. 14 Nebraska CPA
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