Nebraska ~ Sales and Use Tax: Municipal Inspection of Records Allowed, Deduction of Refunds Delayed

Legislation authorizing the inspection of confidential sales and use tax records by a Nebraska municipality has been enacted. The legislation also delays the deduction of local option sales and use tax refunds made pursuant to certain tax incentive programs from sales taxes remitted to municipalities.

Upon written request to the Tax Commissioner, a municipality that has imposed a local option sales tax may certify an employee to inspect confidential tax records of businesses with a sales tax permit for locations within the boundaries of that municipality. The information must be viewed at the premises of the Department of Revenue. The employee certified for such an inspection may not disclose any information obtained during the review. If a disclosure occurs, the employee will be subject to a Class I misdemeanor.

Beginning January 1, 2014, the deduction of local option sales tax refunds made pursuant to the Employment and Investment Growth Act or the Nebraska Advantage Act from sales taxes remitted to municipalities is delayed for one year after the refund is made to the taxpayer. The department must notify the municipality of the pending refund, the amount of the refund, and the month in which the deduction will be made. However, if the amount of a refund claimed under either tax incentive program exceeds 25% of the municipality’s total sales and use tax receipts (net of any refunds or sales tax collection fees) for the prior fiscal year, the department must deduct the refund over the period of one year in equal monthly amounts, beginning after the one-year notification period.

L.B. 209, Laws 2012, effective three months after adjournment of the Nebraska Legislature

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Wolters Kluwer Tax and Accounting

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