A provision buried in LB901 will cut the after-tax revenue from gaming and amusement devices in half—and most Nebraska business owners haven't heard about it yet.
Most Nebraska restaurant and bar owners don't realize that a tax on their gaming and amusement devices is about to double. The change is written into LB901, the Domestic Violence and Human Trafficking Service Providers Tax Credit Act, which passed the 2024 legislative session. But tucked into a bill with dozens of other provisions, this one has flown under the radar.
Section 35 of LB901 (page 22) amends Nebraska Revised Statute §77-3012 to increase the tax on the net operating revenue of cash devices—including video lottery terminals, pull-tab machines, and similar equipment—from 5% to 10%. That's a doubling of the tax rate.
For operators and distributors, this is a direct hit to the bottom line. If you currently keep 95 cents of every dollar of net device revenue after the 5% tax, you'll keep only 90 cents after the increase. The difference represents roughly half of your current tax-net margin on that revenue stream.
This applies to any Nebraska establishment operating cash devices—restaurants, bars, convenience stores, and other retail locations that use these machines as a revenue source. Distributors who place and service the devices are also affected, since their revenue share is calculated on the after-tax amount.
For small businesses running thin margins, a 5-percentage-point increase in a tax on a specific revenue stream can meaningfully change profitability and cash flow decisions.
The change becomes operative three calendar months after adjournment of the 2026 legislative session (see Section 39, page 25 of LB901). This gives operators time to plan, but not years. If you rely on device revenue as part of your business model, now is the time to understand the impact and adjust projections accordingly.
Many business owners are unaware this provision exists because it's embedded in a bill focused on domestic violence and human trafficking services. The bill also touches tax credits, the ImagiNE Nebraska Act, kratom regulation, and several other revenue and exemption changes. The cash device tax increase got little public attention, but it's real and binding.
Understanding the effective date and the exact percentage change allows you to make informed decisions about device placement, pricing, staffing, and overall business strategy before the tax takes effect.
If you operate devices or depend on that revenue, review your current device revenue and net margin. Calculate what a 5-percentage-point tax increase means in dollars. Consider whether your pricing, device mix, or placement strategy needs adjustment. And if you're part of a trade group or association, now is a reasonable time to discuss the impact collectively and explore any available options.
For a more detailed breakdown of LB901's provisions affecting your business, contact your local chamber of commerce or trade association. Many have prepared business-specific summaries of the bill's key changes.