Neb. Admin. Code § 316-36-012 — Security for Payment and Collection of Tax

012.01 The Tax Commissioner may require any taxpayer to file a bond or other security (security), to ensure payment and collection of any tax, in an amount that the Tax Commissioner prescribes and as provided by 012.04. 012.02 Security may be required in the following circumstances. 012.02A Existing Permitholders. Existing permitholders may be required to post security in the following circumstances: 012.02A(1) If the taxpayer files returns on an annual basis and has had one or more delinquencies in remitting tax or filing timely returns during the last 24 months; 012.02A(2) If the taxpayer files returns on a quarterly basis and has had two or more delinquencies in remitting tax or filing timely returns during the last 24 months; or 012.02A(3) If the taxpayer files returns on a monthly or more frequent basis and has had four or more delinquencies in remitting tax or filing timely deposits or returns during the last 24 months. 012.02B Applicants for New Permits. Applicants for new permits may be required to post security in the following circumstances: 012.02B(1) When the applicant has previously held a tax permit and met one of the conditions of 012.02A(1) through 012.02A(3) at that time; 012.02B(2) When the applicant previously held a sales tax permit that was revoked; 012.02B(3) When the business location was previously used for a similar business or businesses that met one of the conditions of 012.02A(1) through 012.02A(3) at that time; or 012.02B(4) When an investigation of the applicant's financial status by the Department shows that the applicant will likely be unable to timely remit the tax. 012.03 Security may be posted by the taxpayer to release a state tax lien, or secure the return of property seized from the taxpayer. 012.04 Amount of Security. If one of the conditions in 012.02A or 012.02B is met, or if the taxpayer chooses to post security to avoid a collection action, the Tax Commissioner may require up to three times the average reporting period liability on any permit. 012.04A If the permitholder has been habitually delinquent, the Tax Commissioner may require up to five times the average reporting period liability. A permitholder will be considered habitually delinquent if the permitholder is delinquent for three or more months or has previously had a permit revoked for nonpayment of taxes. 012.04B A specific amount of security may be required in an order for continuance issued following the scheduling of a revocation hearing, or may be an amount reasonably determined by the Department. 012.05 Length of Time of Security. If security is required, it may be held for three years after the security is posted, if there are no violations. It may be held for a reasonable time after termination of a permit to allow for an audit or examination of the taxpayer's records. 012.06 Forms of Acceptable Security. The following may be posted as security: 012.06A Nebraska state tax bond, underwritten by a surety company licensed to transact business in this state by the Nebraska Department of Insurance; 012.06B Certificate of deposit, issued by a federally insured Nebraska financial institution; 012.06C Passbook savings account, issued by a federally insured Nebraska financial institution; 012.06D Irrevocable letter of credit issued by a federally insured Nebraska financial institution; 012.06E Cash, cashier's checks, money orders, or certified checks, if they will be held for less than 60 days. Any of these forms of security which are held, or expected to be held, longer than 60 days should be converted to a passbook or certificate of deposit; 012.06F Any other security must be approved by the Department in writing. 012.07 Form of Ownership. Certificates of deposit or passbook savings accounts must be held in the Department's name. If any changes are made to the security, the form of ownership must be updated. 012.07A The financial institution must be provided the taxpayer's federal identification number or Social Security number for interest reporting purposes. 012.07B All withdrawals from any form of security must be made in the form of a bank draft or cashier's check. 012.08 To enforce collection of any tax, interest, penalties, and costs not paid when due, the Tax Commissioner may make demand upon any security which has been submitted to the Tax Commissioner on behalf of the taxpayer. If necessary, the security may be sold by the Tax Commissioner in the manner provided by Neb. Rev. Stat. § 77-27,131. (Neb. Rev. Stat. §§ 77-2710, 77-27,131, and 77-3907. July 3, 2013.)