Revenue omnibus clears final round

A package of measures increasing state revenue received final approval from lawmakers April 1.

The Revenue Committee introduced LB901 as a shell bill. As amended, it contains provisions of five other proposals heard by the committee this session.

The provisions of LB873, sponsored by Syracuse Sen. Bob Hallstrom, impose a 10% state excise tax on the retail sale of kratom products beginning in 2027.

They also revise the Kratom Consumer Protection Act, which prohibits the sale of adulterated kratom products in Nebraska.

Hallstrom’s measure prohibits the sale of any kratom product undergoing testing until the results verify that it is not adulterated. If an adulterated product is sold in violation of the act, the state Department of Revenue is required to remove it from the list of registered products on its website.

The amended provisions of LB890, sponsored by Sen. Stan Clouse of Kearney, update the Mechanical Amusement Device Tax Act.

The proposal increases the application fee for a cash device from $500 to $650 and the annual decal fee from $250 to $350, beginning in 2027. It also increases the cash device tax from 5% to 10% of net operating revenue.

The occupation tax on mechanical amusement devices that are not cash devices increases from $35 to $70.

The amended provisions of LB1109, introduced by Elkhorn Sen. R. Brad von Gillern at the request of Gov. Jim Pillen, repeal several sales and use tax exemptions, including those for sales of mineral oil applied to grain as a dust suppressant and biochips used in certain activities.

The measure removes waste treatment and disposal facilities from the list of locations eligible for tax incentives under the ImagiNE Nebraska Act.

It also sunsets a renewable energy tax credit effective July 1 and modifies a tax credit available under the Nebraska Advantage Research and Development Act so that it is no longer refundable.

The provisions of von Gillern’s LB1110 expand the allowable uses of the Department of Revenue Enforcement Fund. They 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.

The measure also requires the department 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.

Finally, the proposal requires 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.

The amended provisions of LB1131, sponsored by Lincoln Sen. Eliot Bostar, require the department 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, the measure repeals tax exemptions related to the assembly of certain data center equipment for use outside the state.

The department estimates that LB901 will increase total state revenue by $26 million in fiscal year 2026-27 and $30 million in FY2027-28.

The bill passed on a vote of 36-13 and takes effect immediately.