Nebraska Administrative Code
Topic - REVENUE, DEPARTMENT OF
Title 350 - Nebraska Department of Revenue, Property Assessment Division
Chapter 40 - Property Tax Exemption Regulations
Section 350-40-012 - BEGINNING FARMER PERSONAL PROPERTY EXEMPTION
Universal Citation: 350 NE Admin Rules and Regs ch 40 ยง 012
Current through September 17, 2024
012.01 Definitions
012.01A Agricultural assets means
agricultural land, livestock, farming or livestock production facilities, or
buildings and machinery and equipment used for farming or livestock
production.
012.01B Board means the
Beginning Farmer Board comprised of the Director of Agriculture (or his or her
designee), the Tax Commissioner (or his or her designee), one individual
representing lenders of agricultural credit, one individual of the academic
community involved in agricultural economics, and one individual from each of
the three congressional districts that are involved in farming and livestock
production.
012.01C Depreciable
tangible personal property is subject to personal property taxation.
Depreciable tangible personal property means tangible personal property which
is used in a trade or business or used for the production of income, and which
has a determinable life of longer than one year.
012.01C(1) Depreciable tangible personal
property also includes tangible personal property which is eligible for
depreciation for purposes of federal income tax, but which the owner chooses
not to depreciate.
012.01C(2)
Depreciable tangible personal property also includes all other tangible
personal property for which a taxpayer is claiming depreciation, amortization,
or Internal Revenue Code (IRC) § 179 deductions for purposes of federal
income tax.
012.01C(3) Depreciable
tangible personal property also includes capital expenses incurred because of
major repairs, parts, labor, and installation costs that prolong the useful
life, increase the value of an asset, or adapt the asset for a different
use.
012.01C(4) The taxable value
of depreciable tangible personal property is the net book value of the
property.
012.01D
Nebraska adjusted basis means the adjusted basis of tangible personal property
as determined under the IRC as it exists on the assessment date, increased by
the total amount allowed under the IRC for depreciation or amortization, or
pursuant to an election to expense depreciable property under IRC § 179,
as amended. Generally, this is the original cost of the item and includes any
costs incurred in purchasing and placing the item in service such as sales or
excise taxes, freight charges, installation, and testing charges.
012.01E The Nebraska depreciation factor is
the percentage of the Nebraska adjusted basis that is taxable. The following
table provides the depreciation factors, based on year acquired and recovery
period:
| Year | Recovery Period (in years) | |||||
| 3 | 5 | 7 | 10 | 15 | 20 | |
| 1 | 75.00 % | 85.00 % | 89.29 % | 92.50 % | 95.00 % | 96.25 % |
| 2 | 37.50 % | 59.50 % | 70.16 % | 78.62 % | 85.50 % | 89.03 % |
| 3 | 12.50 % | 41.65 % | 55.13 % | 66.83 % | 76.95 % | 82.35 % |
| 4 | 0.00 % | 24.99 % | 42.88 % | 56.81 % | 69.25 % | 76.18 % |
| 5 | 8.33 % | 30.63 % | 48.07 % | 62.32 % | 70.46 % | |
| 6 | 0.00 % | 18.38 % | 39.33 % | 56.09 % | 65.18 % | |
| 7 | 6.13 % | 30.59 % | 50.19 % | 60.29 % | ||
| 8 | 0.00 % | 21.85 % | 44.29 % | 55.77 % | ||
| 9 | 13.11 % | 38.38 % | 51.31 % | |||
| 10 | 4.37 % | 32.48 % | 46.85 % | |||
| 11 | 0.00 % | 26.57 % | 42.38 % | |||
| 12 | 20.67 % | 37.92 % | ||||
| 13 | 14.76 % | 33.46 % | ||||
| 14 | 8.86 % | 29.00 % | ||||
| 15 | 2.95 % | 24.54 % | ||||
| 16 | 0.00 % | 20.08 % | ||||
| 17 | 15.62 % | |||||
| 18 | 11.15 % | |||||
| 19 | 6.69 % | |||||
| 20 | 2.23 % | |||||
| 21 | 0.00 % | |||||
012.01E(1) In
the table, the factor shown for year one is the percentage used January 1 of
the year following the year of acquisition of the property. The factor shown
for year two is the percentage used January 1 of the second year following the
year of acquisition of the property, etc. When property becomes depreciable in
a year other than the year it is acquired, it is subject to taxation on the
first assessment date following the date it became depreciable. The net book
depreciation factor for the property is based on the year it is acquired.
012.01F Net book value
is the Nebraska adjusted basis of depreciable tangible personal property
multiplied by the appropriate Nebraska depreciation factor.
012.01G Personal property includes all
property other than real property or franchises.
012.01G(1) Tangible personal property
includes all personal property possessing a physical existence, but excluding
money.
012.01G(2) Intangible
personal property includes property that has no intrinsic value by itself, but
is representative or evidence of value, such as stocks, bonds, promissory
notes, contract rights, bank accounts, money, and other such property.
012.01H Qualified
beginning farmer or livestock producer means an individual who is a resident of
this state, who intends to enter farming or livestock production, and who meets
the eligibility guidelines in Neb. Rev. Stat. §
77-5209
and other qualifications as determined by the Beginning Farmer Board.
012.02 Procedures
012.02A Taxpayer Filing Responsibilities.
012.02A(1) Any qualified beginning farmer or
livestock producer seeking an exemption from tangible personal property tax on
agricultural and horticultural machinery and equipment used in his or her
operation (whether this machinery or equipment is owned or leased), must apply
for the exemption. The application must be filed with the county assessor on or
before December 31 of the year preceding the year the exemption from personal
property tax begins. The application must be made on the Exemption Application
for Qualified Beginning Farmer or Livestock Producer, Form 1027.
012.02A(2) For the initial year of
application, the applicant must also file with the county assessor, the
original certification from the Beginning Farmer Board stating that the
applicant is a qualified beginning farmer or livestock producer.
012.02A(3) Failure to furnish the required
documentation by December 31 will result in the loss of the personal property
tax exemption for the first year following the application date. Upon
furnishing the required documentation, the application for exemption from
personal property tax will be considered for the three years
thereafter.
012.02A(4) On or before
May 1 of each year, the applicant must file with the county assessor a personal
property return along with the supporting schedules and depreciation worksheet
showing a list of all depreciable taxable tangible personal property. The
exemption from personal property tax must not exceed $100,000 of net book value
of agricultural and horticultural machinery and equipment in any year.
012.02A(4)(a) Failure on the part of the
beginning farmer or livestock producer to file the personal property return,
supporting schedules, and depreciation worksheet on or before May 1 is a
forfeiture of the exemption from personal property tax for that year and will
result in the tangible personal property being subject to the personal property
tax, plus applicable late filing penalties.
012.02A(4)(b) Failure on the part of the
beginning farmer or livestock producer to file the personal property return,
supporting schedules, and depreciation worksheet on or before May 1 will result
in a loss of the year from the three-year period for exemption from personal
property tax.
012.02A(5)
When the date for filing an application, supporting documentation, personal
property return, supporting schedules, depreciation worksheet, or any other
requirement falls on a Saturday, Sunday, or legal holiday, the items will be
considered timely filed if delivered in person or postmarked on the next
business day. The postmark date for any documents mailed using regular U.S.
mail will determine the date filed. The certification or registration date of
any documents sent by certified or registered mail will determine the postmark
date.
012.02A(6) If the exemption
from personal property tax is granted or approved by the county assessor, it
will continue for a period of three years, or until the applicant discontinues
farming or livestock production.
012.02A(7) The Tax Commissioner may request
the Attorney General or any county attorney to institute proceedings against
any taxpayer or his or her agent for failure to comply with the provisions of
any property tax law administered by or subject to the administrative
jurisdiction of the Nebraska Department of Revenue.
012.02A(8) For further information on filing
a personal property return and taxpayer responsibilities, see Chapter 20,
Personal Property Regulations.
012.02B County Assessor's Powers and Duties.
012.02B(1) The county assessor, upon
receiving an application for exemption and the necessary documentation, as
required pursuant to
REG-40-012.01A(2)(2),
will verify the information regarding the status of the applicant. If all of
the information is accurate and complete, and all criteria for the exemption of
agricultural and horticultural machinery and equipment are met, the county
assessor will approve, sign the application, and on or before February 1, send
written notification of approval to the applicant. An approved application will
remain in effect for three years.
012.02B(2) After approving the exemption, the
county assessor will exempt no more than $100,000 of taxable personal property
value in any one year. If the total agricultural and horticultural machinery
and equipment schedule exceeds the $100,000 maximum exemption, the county
assessor will show the deduction for the exemption on the agricultural
machinery and equipment schedule and carry forward the net taxable valuation to
the front of the personal property return. The net taxable valuation of the
agricultural and horticultural machinery and equipment, plus the taxable value
of other nonexempt depreciable tangible personal property, will be the total
taxable value for tangible personal property of the beginning farmer and
livestock producer.
012.02B(3) If
the application is denied, the county assessor will, on or before February 1,
issue notice of his or her action to the applicant. The county assessor will
state the reasons why the application was denied.
012.02B(3)(a) The applicant may protest the
denial of the application for exemption to the county board of equalization
within 30 days after notice by the county assessor.
012.03 Protests to the County Board of Equalization
012.03A The applicant may protest the denial
of the application for exemption to the county board of equalization within 30
days after receipt of the county assessor notice of denial.
012.03A(1) The protest must be in writing,
signed, and filed with the county clerk of the county in which the property is
located.
012.03A(2) If the protest
is not timely filed, it will be dismissed automatically.
012.03A(3) The protest must contain a
physical description of the property and a written statement explaining why the
exemption should be allowed. If no description or statement is included or
attached, the protest will be dismissed automatically.
012.03B The county board of equalization must
decide the protest within 30 days after the filing of the protest.
012.03B(1) Within seven days of the county
board of equalization's decision, the county clerk must mail written notice of
the board's decision to the applicant. If the protest is denied, the notice
must state the reason for denial. The county clerk will also electronically
send all decisions of the county board of equalization regarding exemptions to
the Department within seven days of the board's decision pursuant to Neb. Rev.
Stat. §
77-202.04.
012.03C Within 30 days
of the date of the decision of the county board of equalization, the applicant
may appeal the board's decision to the Tax Equalization and Review Commission
pursuant to Neb. Rev. Stat. §
77-5013.
012.03D Persons, corporations, or
organizations may petition the Tax Equalization and Review Commission pursuant
to Neb. Rev. Stat. §
77-5013
on or before December 31 of the year in which the notice should have been sent,
for a determination of the taxable status of their depreciable tangible
personal property because the failure to give notice pursuant to
REG-40-012.02B(3)(3)
and
REG-40-012.03B(1)(1)
prevented timely filing of a protest or appeal.
012.03E No appeal or petition will in any
manner suspend the collection of any personal property tax or the duties of
officers charged with its collection during the pendency of the appeal or
petition, and all personal property taxes subject to collection will be
distributed as though no appeal or petition were pending.
012.03F If, by final order of the Tax
Equalization and Review Commission, it is determined that the personal property
tax or a part of it should be refunded, the county treasurer is authorized to
make the refund upon receiving a certified copy of the final order from the
Commission.
Disclaimer: These regulations may not be the most recent version. Nebraska may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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