Farmers Co-op v. State, 296 Neb. 347

Farmers Cooperative and Frontier Cooperative sought refunds of Nebraska sales and use taxes paid on repairs and parts for agricultural machinery under Neb. Rev. Stat. § 77-2708.01 (refunds for "depreciable repairs or parts").
The Department of Revenue’s 2014 Information Guide defined "depreciable repairs or parts" consistent with the IRS Farmer’s Tax Guide: parts/repairs that appreciably prolong life, arrest deterioration, increase value/usefulness, and are capital expenditures deductible only via depreciation.
The Department denied portions of the Cooperatives’ refund claims for items it deemed nondepreciable (e.g., alternators, bolts, gaskets, sensors, hoses). Claimants did not provide personal property tax returns or depreciation schedules to prove those items were taxed as personal property.
Both Cooperatives appealed the partial denials to the district court without requesting an administrative hearing; the district court found the statutory phrase ambiguous, adopted the Department’s Information Guide definition, and affirmed the denials.
On appeal to the Nebraska Supreme Court the sole issue was the meaning of "depreciable repairs or parts" and whether the Cooperatives met their burden to show entitlement to refunds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Meaning of "depreciable repairs or parts" in § 77-2708.01	"Depreciable" should align with § 77-119 / § 094.01C — items with determinable life >1 year (i.e., depreciable tangible personal property).	The phrase is ambiguous and should be defined consistent with the Department’s Information Guide/IRS standard (capital expenditures that appreciably prolong life, increase value/usefulness, deductible only via depreciation).	Ambiguous; legislative history and purpose support Department/IRS-style definition (capital-type repairs that appreciably prolong life/increase value and are depreciable for tax purposes).
Evidentiary burden to obtain refund	Refund statute need not require submission of personal property tax returns; invoices suffice.	Claimant must prove entitlement to refund (analogous to tax exemption/refund); Department may require proof (personal property tax return or depreciation schedule) to prevent double taxation.	Claimants bear burden; Cooperatives failed to provide required evidence (property tax returns/depreciation schedules) and therefore were not entitled to the denied refunds.

Stewart v. Nebraska Dept. of Rev., 294 Neb. 1010 (statutory interpretation principles in administrative review)
Archer Daniels Midland Co. v. State, 290 Neb. 780 (use of statutory plain meaning and context)
Project Extra Mile v. Nebraska Liquor Control Comm., 283 Neb. 379 (statutory ambiguity and in pari materia analysis)
Trumble v. Sarpy County Board, 283 Neb. 486 (definitions controlling for statute when provided)
Bridgeport Ethanol v. Nebraska Dept. of Rev., 284 Neb. 291 (strict construction of tax exemptions)
Dean v. State, 288 Neb. 530 (legislative intent and statutory construction)
Goodyear Tire & Rubber Co. v. State, 275 Neb. 594 (tax refund/exemption burden principles)