Adopt the Domestic Violence and Human Trafficking Service Providers Tax Credit Act, change provisions related to the confidentiality of shared information, the distribution of certain tax revenue, contracts between the Tax Commissioner and collection agencies, the collection and enforcement of delinquent income tax claims, the ImagiNE Nebraska Act, the Kratom Consumer Protection Act, the Mechanical Amusement Device Tax Act, and the Nebraska Advantage Research and Development Act, provide for fees, provide an excise tax on kratom, eliminate certain personal property and sales and use tax exemptions and a tax credit, and terminate the Department of Revenue Miscellaneous Receipts Fund
LB901 is a broad revenue and tax package that makes numerous changes to Nebraska tax law and related administrative statutes. A major feature is the creation of the Domestic Violence and Human Trafficking Service Providers Tax Credit Act, which authorizes refundable income tax credits to be distributed among qualifying tribal domestic violence and sexual assault programs, a statewide coalition serving domestic abuse victims, and nonprofit shelters serving victims of domestic violence or human trafficking. The bill also authorizes the Department of Revenue and the Department of Health and Human Services to share certain confidential information for administration of their laws, and it expands or revises several Department of Revenue enforcement and collection provisions.
The bill also imposes a new excise tax on retail kratom products and tightens regulation of adulterated kratom, including testing, penalties, and enforcement authority. It revises the Mechanical Amusement Device Tax Act by changing licensing, inspection, advertising, age restrictions, and tax distribution rules for cash devices and other mechanical amusement devices, and it creates or redirects several funds tied to gaming and enforcement. In addition, it changes provisions related to the Behavioral Health Services Fund, the Department of Revenue Enforcement Fund, the Department of Revenue Miscellaneous Receipts Fund, and the Charitable Gaming Operations Fund.
LB901 makes extensive changes to Nebraska’s tax credit and exemption structure. It eliminates certain property tax exemptions and sales-and-use tax exemptions, repeals or sunsets some existing credits, and revises several income tax credits, including credits tied to economic development, research and development, biodiesel, higher blends, affordable housing, child care, pregnancy help, caregivers, and beginning farmers. It also modifies the ImagiNE Nebraska Act and Nebraska Advantage statutes, changes the treatment of delinquent tax claims and collection agency contracts, and updates the state tax expenditure reporting requirements.
The bill’s impact on state law is substantial: it amends many sections of the Nebraska Revised Statutes, creates new funds and administrative structures, and repeals or outright removes several prior provisions. It also changes how certain tax revenues are allocated among the General Fund, enforcement funds, behavioral health programs, gambling-related funds, and local governments. Because it includes both revenue-raising measures and targeted credits/exemptions, it affects taxpayers, retailers of kratom, gambling-device operators and distributors, nonprofits serving victims, and state agencies responsible for tax administration and human services.
The overall sentiment reflected in the voting history was strongly favorable, with repeated committee and floor amendments adopted overwhelmingly and final passage occurring 36-13 with an emergency clause. That pattern suggests broad support for the bill as amended, though the final vote indicates some continuing opposition. The main points of contention appear to have centered on the bill’s large scope, the new kratom tax and regulation, the mechanical amusement device/cash device provisions, and the elimination of certain tax exemptions and credits, all of which likely affected different stakeholder groups in different ways.
LB901 substantially revises Nebraska tax and revenue law by creating new refundable and nonrefundable income tax credits, imposing a new excise tax on kratom, changing sales, use, and property tax exemptions, and updating tax collection and enforcement procedures. It also creates or repurposes several state funds and changes revenue distributions to the General Fund, enforcement funds, behavioral health programs, gambling-related funds, and local governments. The bill affects taxpayers, retailers, nonprofits, gambling-device operators, and state agencies administering revenue and human services programs.
The bill appears to have had generally favorable legislative support, as shown by multiple adopted amendments with little opposition and final passage on a 36-13 vote with an emergency clause. The amendment history suggests the bill was actively negotiated and refined, but the final vote also shows that a meaningful minority remained opposed. Overall, the sentiment was supportive of the package, especially after amendments, but not unanimous.
The most notable areas of contention were the bill’s breadth and its mix of unrelated tax and regulatory changes. Potentially controversial provisions included the new kratom excise tax and product restrictions, the changes to mechanical amusement device and cash device regulation and taxation, and the elimination of certain tax exemptions and credits. Stakeholders likely differed on whether the bill was primarily a revenue measure, a public-health and enforcement measure, or a tax-relief/targeted-credit package, and the final 13 no votes suggest some legislators remained concerned about one or more of those components.