Revenue omnibus advanced to second round

Lawmakers gave first-round approval March 6 to a package of measures intended to increase state revenue.

The Revenue Committee introduced LB901 as a shell bill. A committee amendment, adopted 35-1, replaced the bill with provisions of four other proposals heard by the committee this session.

Elkhorn Sen. R. Brad von Gillern, committee chairperson, said the measure would increase state revenue by approximately $26 million annually.

The amended provisions of LB890, sponsored by Sen. Stan Clouse of Kearney, would update the Mechanical Amusement Device Tax Act. The proposal would increase the application fee for a cash device from $500 to $650 and the annual decal fee from $250 to $350, beginning in 2027.

Clouse said the measure also would increase the occupation tax on mechanical amusement devices that are not cash devices, such as pool tables and pinball machines, from $35 to $70.

Occupation taxes collected under the act currently are directed to the General Fund. Under Clouse’s proposal, 20% would be credited to the Department of Revenue Enforcement Fund, and 80% would be allocated to the General Fund.

Beginning in 2028, the department would adjust the fees and occupation tax for inflation annually.

The proposal also would increase the tax on cash devices from 5% of net operating revenue to 10% and change how the tax is distributed.

Currently, 40% of the proceeds are credited to the Property Tax Credit Cash Fund. The committee amendment would eliminate that distribution and increase the amount credited to the General Fund from 2.5% to 71.75%.

Von Gillern offered an amendment, adopted 33-0, that instead would distribute 6.5% to the Property Tax Credit Cash Fund and 65.25% to the General Fund.

Current law limits the number of cash devices permitted at a retail establishment to either four or the number of devices it takes to generate 40% of the establishment’s gross operating revenue, whichever is less.

Von Gillern offered another amendment, adopted 31-0, that would increase the number to five except in establishments located in a qualified census tract.

His amendment also would require the department to replace a cash device decal without an additional fee in certain circumstances.

Sen. Ashlei Spivey of Omaha supported the committee amendment, saying it includes certain provisions from her LB920 that are intended to prevent the advertising of cash devices to minors.

Another provision would prohibit operators from making a cash device available for play at a retail establishment unless an attendant is physically present and capable of actively supervising play by visually confirming the player’s age and intervening to prevent play by anyone under 21.

The amended provisions of LB1109, introduced by von Gillern at the request of Gov. Jim Pillen, would repeal several sales and use tax exemptions.

As introduced, the bill would have eliminated a sales and use tax exemption for purchases made by Wyuka Cemetery in Lincoln. The committee amendment would leave the exemption in place.

Von Gillern said the provisions of his LB1110 would expand the allowable uses of the Department of Revenue Enforcement Fund. They would require the department to use money in the fund for the administration and enforcement of any activity or function administered by the state tax commissioner.

Beginning no later than Oct. 31, the measure also would require the state Department of Revenue and the state Department of Health and Human Services to share confidential information about persons, businesses and state and local subdivisions with the other agency for the purpose of properly administering the law.

Von Gillern said the proposal also would require the state Department of Revenue to add a collection fee to delinquent tax claims as well as the actual costs incurred by the department in collecting the taxes. Fees and costs would be credited to the Department of Revenue Enforcement Fund.

The amended provisions of LB1131, sponsored by Lincoln Sen. Eliot Bostar, would require the state Department of Revenue to distribute $3 million annually in refundable, transferable state income tax credits to nonprofits that provide services to victims of domestic violence and human trafficking.

To fund the credits, Bostar said, the measure would repeal personal property and sales and use tax exemptions related to the assembly of certain data center equipment for use outside the state. Approximately $3 million per year would be returned to the General Fund, he said.

LB901 advanced to select file on a vote of 33-1.