Although the 2026 Nebraska Legislative Session did not produce as many tax law changes as some policymakers had anticipated, lawmakers still enacted several significant measures affecting sales and use taxes, tax incentives, administrative enforcement practices, property tax procedures, and economic development. The session also included revisions to Nebraska’s Foreign Adversarial Company law and several new taxes and tax rate increases.

Together, these measures reflect Nebraska’s continuing efforts to modernize revenue collection, refine economic development incentives, improve property tax transparency, and address emerging policy concerns. The following summarizes the most significant changes and their implications for Nebraska taxpayers and tax professionals.

LB 803: First-Time HomeBuyer Savings Accounts and Property Tax Procedures

Beginning in 2027, Nebraska will allow first-time homebuyers to establish tax-advantaged savings accounts to help them purchase or construct a primary residence in Nebraska. Qualified expenses include down payments, closing costs, appraisal and inspection fees, mortgage origination fees, and other financing costs associated with acquiring or building a home.

Annual contributions are limited to $5,000 for individuals and $10,000 for joint filers, with lifetime contribution limits of $25,000 and $50,000, respectively. Contributions, along with interest and investment earnings, are deductible for Nebraska income tax purposes, although tax benefits may be recaptured if funds are not ultimately used for qualified expenses.

LB 803 also revised Nebraska’s property tax notice and hearing procedures. County assessors must continue mailing notices of changed valuations by June 1 whenever assessed values differ from the prior year. In addition, counties, cities, and school districts levying property taxes within a county must now participate in joint public hearings between July 1 and July 15. Representatives from each taxing authority, including at least one voting member from each governing body and the county assessor, are required to attend and discuss preliminary budget information. These changes are intended to improve transparency and public understanding of local budgeting and property tax decisions.

LB 901: Nebraska’s Comprehensive Tax Package

LB 901 was the Legislature’s primary tax bill and included broad changes to tax exemptions, Department of Revenue administration, economic development incentives, and tax collection procedures.

Sales and Use Tax Changes

The legislation repealed several existing sales and use tax exemptions, including exemptions involving certain community-based energy development projects, mineral oil used as a grain dust suppressant, research biochips, certain nonprofit transfers, game birds, and certain data center property used outside Nebraska. It also eliminated a personal property tax exemption for equipment temporarily brought into Nebraska for assembly before being shipped elsewhere.

In addition, beginning with applications filed on or after July 1, 2026, waste treatment and disposal businesses will no longer qualify for incentives under the ImagiNE Nebraska Act.

Department of Revenue Administration

LB 901 significantly expanded the Department of Revenue’s administrative authority by authorizing new assessment, collection, protest, and application fees. Beginning July 1, 2026, the Department may impose collection and assessment fees generally equal to the greater of $25 or 10% of the tax liability. New filing fees also apply to protests of tax assessments, requests to waive interest or penalties, and tax sale certificate clearance applications. Beginning in 2027, these fees will be adjusted periodically for inflation.

The legislation also strengthens the Department’s collection authority by allowing additional costs to be added to delinquent tax liabilities and authorizing the Tax Commissioner to register certain delinquent tax claims as judgments in Lancaster County District Court. Together, these provisions increase the financial consequences for taxpayers who fail to resolve outstanding tax liabilities.

LB 901 also authorizes the Department of Revenue and the Department of Health and Human Services to share otherwise confidential information when necessary to administer their respective programs.

LB 1165: Grow the Good Life Act

LB 1165 created the Grow the Good Life Act, a targeted economic development program intended to encourage major Nebraska employers to retain headquarters operations and workforce following mergers or business combinations with large out-of-state companies.

To qualify, employers generally must have maintained headquarters in Nebraska for at least 10 years, employed more than 3,000 Nebraska workers before the transaction, retain at least 90% of their Nebraska workforce, and otherwise qualify under the ImagiNE Nebraska Act. Applications may be submitted to the Department of Economic Development from Jan. 1, 2027, through May 31, 2029.

Approved employers may earn wage retention credits equal to 5% of qualifying compensation paid to retained Nebraska employees earning at least the statewide average wage. Credits are subject to annual and statewide caps and may offset either Nebraska income tax or withholding tax liabilities. The program also authorizes workforce retention and attraction grants of up to $300,000 for economic development organizations assisting qualifying employers.

Changes to the ImagiNE Nebraska Act

LB 1165 also made several significant revisions to the ImagiNE Nebraska Act.

One of the most notable changes allows businesses with ImagiNE agreements to use earned tax credits to pay up to 50% of employees’ dependent childcare expenses. Unlike several other provisions, this benefit is immediately available to all businesses operating under existing ImagiNE agreements, regardless of application date.

The legislation increased wage credit percentages for several qualifying projects, including increasing rural manufacturing credits from 6% to 7% and urban manufacturing credits from 4% to 5%. Quality Jobs projects may qualify for credits ranging from 6% to 10%, depending on average wage levels.

Investment credits for qualifying manufacturing projects also increased from 4% to 5% for investments under $10 million and from 7% to 8% once qualified investment exceeds $10 million.

Businesses qualifying under the Grow the Good Life Act that create at least 500 Nebraska positions paying at least $100,000 annually may receive additional 1% wage and investment credits for eligible new or relocated employees.

LB 1165 also modified the Nebraska Advantage Act by extending the attainment period for certain Tier 6 projects while imposing a new application fee.

LB 1096: Foreign Adversarial Company Revisions

LB 1096 amended Nebraska’s Foreign Adversarial Company (FAC) law, originally enacted in 2025.

The law continues to prohibit qualifying foreign adversarial companies from receiving benefits under numerous Nebraska incentive programs, including the Nebraska Advantage Act, ImagiNE Nebraska Act, Rural Development Act, Urban Redevelopment Act, Nebraska Advantage Research and Development Act, and Nebraska Relocation Incentive Act.

The legislation narrows the FAC definition by removing parent-company status as an automatic basis for disqualification. As a result, a parent company is no longer automatically ineligible because one of its subsidiaries qualifies as a Foreign Adversarial Company. However, incentive benefits must still be apportioned to ensure foreign adversarial affiliates do not receive prohibited tax benefits.

LB 1096 also clarifies that direct or indirect ownership, operation, or control by a foreign adversarial government may result in FAC status.

Despite these revisions, significant concerns remain. The law continues to create uncertainty because even relatively small ownership interests by foreign adversarial entities may affect eligibility for Nebraska incentives. Questions also remain regarding the treatment of previously executed incentive agreements, an issue that many businesses believe creates uncertainty for Nebraska’s business climate.

New Taxes and Tax Rate Increases

The Legislature also enacted several new taxes and tax rate increases.

Beginning Oct. 1, 2026, LB 815 subjects dyed diesel fuel to a motor fuel tax of one-quarter cent per gallon.

LB 838 imposes a 25% excise tax on certain remittance transfers to residents of China, Russia, Iran, and North Korea.

Beginning Jan. 1, 2027, LB 901 imposes a 10% excise tax on retail sales of kratom products. The tax applies in addition to existing sales and other applicable taxes.

LB 1067 temporarily increases Nebraska’s documentary stamp tax from $2.32 to $3.32 through Jan. 1, 2032. Additional revenue generated by the increase will support the Rural Workforce Housing Investment Fund and the Middle-Income Workforce Housing Development Fund.

LB 1114 also revises Nebraska’s Tax Increment Financing statutes by expanding several definitions under the Community Development Act, including modifications affecting blighted and extremely blighted areas and redevelopment projects.

Looking Ahead

Although the 2026 legislative session did not fundamentally reshape Nebraska’s tax system, it produced several meaningful changes affecting taxpayers, businesses, and tax practitioners. The legislation expands certain economic development incentives, modifies property tax procedures, strengthens the Department of Revenue’s enforcement authority, creates new taxes, and continues Nebraska’s evolving approach to business incentives and foreign ownership restrictions.

As state leaders continue to evaluate Nebraska’s tax structure and budget priorities, additional tax legislation is likely to emerge during the 2027 legislative session. CPAs advising Nebraska individuals and businesses should remain attentive to further developments as lawmakers continue refining the state’s tax and incentive laws.