Budget & Taxes (Tax Incentives)

LB 164, the Urban Development Incentive Act, creates a state grant program to support small and emerging developers in economically distressed areas of Nebraska. The bill provides funding for affordable commercial space development, rehabilitation, and sustainability features, with grants covering up to 20% of project costs (max $3.5 million per project) and specific categories for financing help, job training, and green building certification. It directly affects small developers (under 50 employees, <$5M revenue) working in areas meeting federal census criteria for high unemployment (≥150% state average) and poverty (≥20%). The program requires community engagement documentation and annual reporting to the Legislature on grant usage and job creation.

This bill would eliminate Nebraska's sales tax exemption for candy and soft drinks, requiring these items to be taxed starting October 1, 2025. Currently, candy (defined as sugar-based products without flour or refrigeration needs) and soft drinks (nonalcoholic sweetened beverages excluding milk-based or juice-heavy drinks) are exempt under state tax law, but this bill would remove them from the list of exempt items. The change would directly affect consumers purchasing these products and retailers selling them, as they would now pay the standard sales tax. This policy shift aligns with efforts to broaden the tax base for non-essential items.

This bill creates a property tax exemption for Nebraska landowners who place perpetual recreational trail easements on their land. The exemption provides $0.10 per square foot annually for qualifying easements that grant public nonmotorized access (such as walking, hiking, or biking) and connect to existing or planned trails. To qualify, easements must be held by eligible entities like municipalities, accredited land trusts, or specific nonprofits focused on public access and conservation, and landowners must apply through the Department of Revenue with proof of the recorded easement. The bill also updates filing procedures for easement documentation to support this tax program.

LB 647 creates two new tax programs and modifies multiple tax codes. It establishes a property tax exemption for landowners who grant permanent public access rights for recreational trails (like walking or biking paths), provided the easement connects to existing trails and is held by eligible entities like cities or accredited nonprofits. It also creates a 10% refundable state tax credit for Nebraska taxpayers who qualify for the federal adoption credit, effective for 2026 tax years. The bill further updates property tax calculation rules, municipal tax provisions, school district relief funding, and education savings plan eligibility without creating new major programs.