Nebraska Advantage Act Multi-Tiered Benefits

Tier 1 - $1 Million New Investment and 10 New Jobs

Qualifying businesses under this tier are eligible for a half refund of the sales tax paid for qualified capital purchases at the project, the full sliding scale wage credit of 3%, 4%, 5%, or 6% depending on wage level, and a 3% investment tax credit.

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Tier 2 - $200 Million New Investment and 30 New Jobs at Data Center

This new tier qualifies for a refund of all sales and use taxes on the project’s tangible personal property from the date of acquisition through the entitlement period, the sliding scale wage credit, and a 10% investment credit. Also, it includes a personal property tax exemption up to 10 years on all of the project’s personal property.

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Tier 3 - 30 New Jobs (No Investment)

For the creation of 30 new jobs, the company receives the sliding scale wage credit. No capital investment is required.

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Tier 4 - $12 Million New Investment and 100 New Jobs

In addition to the sales tax refund, jobs credit, and the investment credit, qualifying businesses under this tier receive a personal property tax exemption on turbine-powered aircraft, personal computer systems, agricultural product processing machinery, and personal property used in a distribution facility for up to 10 years.

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Tier 5 - $37 Million New Investment and Must Maintain Employment

Companies receive a refund of all sales taxes paid on capital purchases with the project. Also, it includes a personal property tax exemption on computer systems for an Internet web portal or data center.

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Super Tier 6 - $10 Million New Investment and 75 New Jobs or $109 Million New Investment and 50 New Jobs

Any business activity other than retail qualifies. Refund of all sales tax on project’s capital purchases, 10% job credit on new employee “compensation”—wage thresholds per new position are the greater of 200% of the county average wage or 150% of the Nebraska average wage, 15% investment credit, and personal property tax exemption for all personal property at the project for up to 10 years.

 

Components Incorporated into the

Nebraska Advantage Package

 

Rural Development Advantage

Provides qualified businesses with refundable tax incentives for projects that create two new jobs and invest $125,000 in counties with less than 15,000 residents. Tele-workers count as new employees. In addition, $250,000-investment and five-job thresholds remain in place for counties with populations of 15,000–25,000.

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Nebraska Customized Job Training Advantage

Provides a flexible and discretionary job training program with grants from $800 to $4,000 per qualified new job. Additional grant funds may be available for new jobs created in rural and high-poverty areas. You can design your own training, or a statewide training team can assist with training needs and assessments, training plans, curriculum development, and training instruction.

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Nebraska Advantage Research and Development Credit

Offers a refundable tax credit for qualified research and development activities undertaken by a business entity for 21 years. The credit is equal to 15% of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for research and development. The credit is increased to 35% of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for expenditures on the campus of a college or university in Nebraska or a facility owned by a college or university in Nebraska.

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Nebraska Advantage Microenterprise Tax Credit

Provides a 20% refundable tax credit to microbusinesses on increased compensation for employees or increased investment in targeted communities. Applicants may qualify for a maximum of $10,000 throughout the life of the program. The credit is limited to companies with five or fewer employees at the time the application is filed, including start-ups. Credits are approved on a first-in-first-out basis through an application process with the Nebraska Department of Revenue. The credits are earned on increased expenditures for wages, buildings, certain expenses, and non-vehicle depreciable personal property.

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Community Development Block Grant (CDBG)

Designed to create quality jobs and promote new investment, CDBG funds must be used to benefit low- to moderate-income persons, aid in the prevention or elimination of slums or blight, or meet other community development emergency needs. CDBG funds can be used to purchase machinery, equipment, and inventory, meet working capital needs, develop community infrastructure, construct or renovate existing buildings, and purchase real estate.

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Capital Gains and Extraordinary Dividend Exclusion

Exemption from state personal income tax on capital gains realized from selling or exchanging stock of one corporation acquired by an employee with that corporation. The employee can also exclude extraordinary dividends that exceed 20% of the value of the stock for the same corporation. The corporation must have done business in Nebraska for at least three years and must have a minimum of five shareholders, and related shareholders cannot own more than 90% of the stock.

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State and Local Sales Tax Exemptions of Manufacturing Machinery, Equipment, and Related Services

Manufacturing machinery and equipment is defined to include: equipment for transporting raw materials or components; molds and dies for forming cast or injected products or its packaging materials; machinery to maintain the integrity of the product or environmental conditions; testing equipment for quality control; computers that control a manufacturing process; machinery used to produce steam, electricity, catalysts, and solutions; repair or replacement parts; and all installation, repair, and maintenance service performed on such equipment.

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