A provision in LB901 will double the tax on cash devices—and most Nebraska business owners haven't heard about it yet.
Most Nebraska restaurant owners don't realize that a tax change buried deep in LB901 could significantly affect their bottom line if they operate skill-based amusement machines—commonly called cash devices or gaming machines.
Here's what's happening: Nebraska law currently taxes the net operating revenue from these machines at a rate of 5%. Under LB901, that rate will jump to 10%, effective three calendar months after the 2026 legislative session adjourns. That means your quarterly tax obligation on these devices will double.
This change applies directly to any Nebraska restaurant, bar, or small business that owns or operates cash devices—skill-based amusement machines that generate net operating revenue. If you have even one machine, the tax increase applies to you. Distributors who place machines in multiple locations will see the impact across their entire portfolio.
The change is codified in Section 35 of LB901, which amends Section 77-3012 (found on page 22 of the bill). The operative date is specified in Section 39, page 25: three calendar months after the 2026 legislative session concludes.
The math is straightforward but significant. If a machine generates $10,000 in net operating revenue in a quarter, you currently pay $500 in tax. Under the new rate, that same revenue will be taxed at $1,000—a $500 quarterly increase per machine.
For operators with multiple machines or those who rely on this revenue stream, the cumulative effect can be material. A business with five machines generating average quarterly revenue could see their annual tax obligation increase by $10,000 or more.
This is the kind of change that affects pricing decisions, reinvestment plans, and profitability forecasts. If you're currently factoring a 5% tax rate into your business model, you'll need to recalculate.
The change won't take effect immediately—it becomes operative three calendar months after the 2026 legislative session adjourns. That gives you time to plan, but not unlimited time. The Nebraska Legislature typically adjourns in spring, which would place the effective date sometime in summer 2026.
If you operate cash devices, now is the time to review your current tax obligations, understand your machine revenue, and factor this increase into your 2026 financial planning.
LB901 made numerous other changes to Nebraska tax law, including provisions on the ImagiNE Nebraska Act, the Kratom Consumer Protection Act, and several other areas. The cash device tax increase, however, is the provision most directly relevant to restaurant and bar operators.
Source: LB901, 129th Nebraska Legislature, Section 35 (Section 77-3012, page 22) and Section 39 (page 25).