October 30, 2014

Drought-stricken livestock producers get a break from the IRS

CowsA policy change by the Internal Revenue Service gives Nebraska farmers and ranchers who were hit by drought more time for recovery.

IRS spokesman Christopher Miller says the agency has changed the rules when it comes to livestock losses.

Miller says farmers often sell off more livestock than usual during a drought and in order to take advantage of tax benefits under the law, they have to replace those livestock within a specified time.

That time limit had been four years, but the IRS has extended the deadline another year for those who were facing a December 31st deadline this year.

“That also means that impacted farmers can defer taxes on capital gains from that sale of the livestock,” Miller says.

The IRS regulations say the one-year extension applies to capital gains realized by eligible farmers and ranchers on sales of livestock held for draft, dairy or breeding purposes due to drought. Sales of other livestock, like those raised for slaughter or held for sporting purposes, and poultry are not eligible.

Miller says the overall goal is to provide a break to farmers who were impacted by the drought.

“You will have an extension of time to replace the livestock that you had to get rid of because of those conditions,” Miller says, “and you also have an extension of time to defer any taxes that you get because of the gain in selling that livestock.”

Miller urges Nebraskans to check to see if they qualify under the extension. They need to read IRS publication #225, available on the website www.IRS.gov.

 

Deadline is next week for extension on federal tax returns

There’s less than one week left for those Nebraskans who have been putting off filing their federal tax returns for 2013, according to IRS spokesman Christopher Miller.

“If you asked for an extension of time to file this year’s tax return, the IRS just wants to remind you that time is running out to get it done. Under the law, you have until October 15th to file a tax return if you asked for an extension this year,” Miller says.

If you haven’t filed that return yet, you are not alone. More than 45,000 Nebraskans asked for an extension to file their taxes this year.

“Interestingly, across the country nearly a quarter of the people who asked for an extension still have not filed their return,” Miller says. “So, it’s a good time to remind people that time is is running out.”

Miller says there are a host of reasons people are so far behind on paying their taxes.

“Often it’s simply because they don’t have the records, or the data, or the paperwork together that will support the deductions that they intend to claim,” Miller says.

He says those who haven’t filed the returns yet are not getting away without paying what they owe.

“An extension of time to file your taxes is not an extension of time to pay your taxes. So, for folks that did request and extension, hopefully if they did owe taxes, they paid as much as they are able to so they an avoid further interest and penalties,” according to Miller.

For more information, visit www.irs.gov.

 

Sales tax “penalty” for state’s farmers & ranchers vanishes

Corn combineA sales tax exemption is now in effect in Nebraska on repair and replacement parts for farm machinery and equipment.

The Nebraska Farm Bureau worked with the Unicameral in getting legislation passed that removed that tax burden on farmers and ranchers. Jay Rempe, the bureau’s vice president of government relations, says the savings will bring much-needed benefits to the state and local economies.

“The savings are projected to be about $9 to 10-million statewide with a couple of other benefits,” Rempe says. “Obviously, equipment dealers along the borders with our bordering states that didn’t have the sales tax, it should help them in terms of the business they see.”

The law change became effective when the calendar page flipped to October on Wednesday. Rempe says farm machinery has been exempt from sales tax for years, but Nebraska is one of eight states that has collected sales tax on repairs and parts.

“It really put our dealers and our farmers and ranchers at a competitive disadvantage,” he says. “We worked for many years alongside equipment dealers and others to try and remove this sales tax exemption and finally got the legislature to agree it was a wise policy decision and got it passed this spring.”

Rempe says many producers will use their saved dollars to improve their farmsteads.

“Farmers, when they see tax savings, they typically plow those dollars back into their operations,” he says. “New equipment or new technologies or other ways of improving their productivity. That benefits rural Nebraska as well. We see those dollars reverberating through the local economies like that.”

Rempe says Nebraska was one of only eight states that had that tax and none of Nebraska’s neighboring states collected it.

Senator Annette Dubas of Fullerton introduced LB-96 last winter. The legislature passed it in March and Governor Dave Heineman signed it into law in April.

Thanks to Paul Hughes, WJAG, Norfolk & Jerry Oster, WNAX, Yankton

 

 

Report: Nebraska would see millions in taxes from legal pot

A new report puts a price tag on what Nebraska might reap in new tax revenues if the state legalized marijuana.

The financial website NerdWallet took the data from an anonymous health survey that found just under 4% of Nebraskans over age 25 said they’d smoked pot in the past month.

Based on Nebraska’s population, that’s about 45,000 marijuana users.

From there, the report’s writers mirrored what Colorado has done and figured in a 15% excise tax on all marijuana sales.

The final tally exceeded $13-million which the website claims Nebraska could generate in taxes every year by making pot legal. Nationwide, the figure exceeds 3-billion if all states legalized it.

 

State tax revenue: what March giveth, April taketh away

What March gave, April took away.

State revenue surged in March only to plummet in April, according to numbers released by the Nebraska Department of Revenue.

The department reports net tax collections last month fell 7.2% below the prediction of the Nebraska Economic Forecasting Advisory Board.

Net tax receipts in April totaled $483 million, well below the projected $520 million.

The fall off can be attributed to a drop in state income tax receipts, both individual and corporate, as well as a drop in sales tax receipts.

The two month swing is mostly a wash. State revenue in March jumped $37.5 million ahead. In April, it fell back $37.7 million.

State tax revenue as a whole still is ahead of the forecast, about $3 million better than forecast.