Issue: Proper Protest The Department of Revenue has firm regulations on the requirements needed to file a proper, legal protest to a Department assessment. We are brought in at all stages of a dispute to help that dispute be resolved as favorably as possible. Still, when we’re brought in after an assessment is issued, we work with our clients to ensure that their protest meets all the Department’s regulatory requirements to challenge an assessment and that the protest properly requests a full administrative hearing. We’ve also addressed, in Issue 1, 2023 of the Nebraska CPA magazine, when legal counsel is required to be involved in a protest or appeal to a Department assessment. Using the Tax Incentive Protocol Optimal results can be achieved for each of these issues by following the “State and Local Tax and Incentives Resolution Protocol” available at www.NebraskaStateTax.com. Nick Niemann and Matt Ottemann are partners with McGrath North Law Firm. As state and local tax and incentives attorneys, they collaborate with CPAs to help clients and companies evaluate, defend, and resolve tax matters and obtain various business expansion incentives. For more information, go to www.NebraskaStateTax.com and www.NebraskaIncentives.com. For a copy of their full publication, “The Anatomy of Resolving State Tax Matters,” or their “Nebraska Business Expansion Decision Guide,” visit their websites or contact them at (402) 341-3070 or at nniemann@mcgrathnorth.com or mottemann@mcgrathnorth.com, respectively. Issue: Contractor Sales Tax Compliance Sales tax compliance is a significant issue for contractors and those selling building materials. Issue: Common & Contract Carriers Property used by common and contract carriers may be exempt from tax, but classification as a carrier comes with a variety of specific conditions. Issue: Taxation of Aircraft The ownership or lease of a private aircraft in Nebraska comes with several issues, including whether the initial purchase is eligible for a tax exemption in Nebraska. Issue: Data Processing & Data Centers The Department has been working to treat a portion of otherwise nontaxable data processing and data center fees as taxable security service fees. Issue: Tangible Property Versus Real Property The taxation of the purchase of personal property varies significantly from the purchase of real property. Classification of property as being real or personal is based on a multi-factor test. Issue: Sampling & Projection The Department’s sampling and projection methods often have a significant impact on the results under a sales and use tax audit. A good deal of challenges can be brought against an inappropriate method. Issue: New Technology & New Business Models As new technologies and new business models are being developed, the Department has been continuously looking at ways to impose taxation. Issue: Transfers Between Owners & Their Entities or Between Related Entities While many transfers between owners, and related entities, can be tax free, a number of conditions must be met under Nebraska tax law for that to be the result. Issue: Product-Based Exemptions These types of exemptions depend on the true nature of the product. Issue: Agricultural Exemptions Nebraska has several exemptions available for agricultural producers, but these have various requirements that must be met to qualify. Issue: Energy Use Exemption Nebraska’s exemption for energy usage is significant but contains multiple conditions that can be the subject of questions with the Department of Revenue. Issue: Entity-Based Exemption The issue here is whether the entity meets the requirements for being sales-tax exempt. Issue: Lease or Purchase Whether a transaction, despite its form, is fundamentally a lease or purchase impacts the sales taxation. Issue: Pollution Control Refund Nebraska law establishes a tax refund available for equipment used in pollution control. Qualification is a multi-step process that includes review by the Nebraska Department of Environment and Energy. Issue: Property Used by Business or Component Part of Another Product For businesses, it is often a question of whether an item is consumed by that business (and therefore taxable) or whether it becomes a component part of the products that the business itself makes. 27 www.nescpa.org
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