Nebraska Advantage
The Nebraska Advantage package was designed to create a business climate that makes Nebraska the preferred location for starting and growing your business. The Nebraska Advantage rewards businesses that invest in the state and hire Nebraskans. In this progressive, pro-business tax climate, corporate income and sales taxes are reduced or virtually eliminated. Nebraska Advantage contains 6 tiers of benefit:
- Tier 1 - $1 million investment/10 new jobs
Refund of ½ the sales tax paid on project’s capital purchases, the full sliding scale job credit of 3, 4, 5 or 6% depending on wage level, and a 3% investment tax credit.
- Tier 2 - $3 million investment/30 new jobs
Refund on all sales tax paid on project’s capital purchases, the full sliding scale job credit of 3, 4, 5 or 6% depending on wage level, and a 10% investment credit.
- Tier 2 – $200,000,000 new investment and 30 new jobs at data center
This new tier qualifies for refund of all sales and use taxes on 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 includes a personal property tax exemption up to 10 years on all project’s personal property.
- Tier 3 – No investment/30 new jobs
Requires creation of 30 new jobs. Companies receive the full sliding scale job credit of 3, 4, 5 or 6% depending on wage level. No capital investment is required.
- Tier 4 - $11 million investment/100 new jobs
Refund on all sales tax paid on project’s capital purchases, the full sliding scale job credit of 3, 4, 5 or 6% depending on wage level, a 10% investment credit, and a personal property tax exemption on turbine-powered aircraft, computers systems, agricultural processing machinery and personal property used in distribution facilities for up to 10 years.
- Tier 5 – $33 million investment/Maintain Employment
Refund of all sales tax paid on project’s capital purchases and a personal property tax exemption on computer systems for internet web portal for up to 10 years.
- Super Tier 6 – $10 million investment/75 jobs or $100 million investment/50 jobs
Refund of all sales tax paid on project’s capital purchases, a 10% job credit on wages above specific threshold, a 15% investment credit, and a personal property tax exemption for up to 10 years.
- Nebraska Research and Development Advantage
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 percent 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 percent 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
- 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.
- Customized Job Training Program
Provides training assistance to qualifying companies that sell goods/services primarily to a non-Nebraska market. Eligible training projects include new investment in Nebraska that create full-time jobs or require retraining of existing full-time positions in order to retain those positions in Nebraska.
- InternNE Program
Creates new internship opportunities for college and university students to gain job experience working with companies across the state. InternNE grants can reimburse up to a 50% of an intern’s wages, up to $5,000 per internship. If the intern is receiving a federal Pell Grant, InternNE can reimburse up to 75% of wages, up to $7,500 per internship. Program information and applications can be found here.
- Site & Building Development Fund
Provides financial assistance to eligible local governments and Nebraska non-profit organizations to prepare parcels of land and buildings for future industrial growth and development. Eligible activities may include land and building acquisition, building construction or rehabilitation, site preparation, infrastructure development and improvements, engineering and design costs, technical assistance and planning, and other preapproved costs involved in the development of industrial-ready sites and buildings.
Additional incentives available in Lincoln
- Community Improvement Financing
Tax increment financing (TIF) of the cost of public improvements for projects located in blighted and substandard areas. Its purpose is to reduce developer capitalization to a level that makes investment feasible. Public improvements include land purchase, clearance and sale, construction of streets, sidewalks, utilities, parks or other similar public spaces necessary in site preparation.
- New Market Tax Credits (NMTC)
The New Markets program helps revitalize targeted urban and rural geographic areas through the retention and creation of jobs, the renovation and expansion of vacant business properties, community facilities, and the purchase of major equipment for business expansion. Eligible borrowers can obtain loans with lower interest rates and terms up to 25 years, creating a lower monthly payment and allowing borrowers to keep more cash in their businesses. The New Markets loan enables borrowers to expand and renovate their existing properties, buy the properties outright, or purchase additional property for business expansion. For loan information link to:
- Capital Gains Exemption
One-time exemption from state personal income tax on gains realized from selling or exchanging stock of a corporation acquired by an employee with the corporation. The corporation must do business in Nebraska for at least three years and must have a minimum of five shareholders. The provision is an excellent recruitment tool for growth-oriented companies that use company stock options as part of employee compensation or retirement programs.
- Nebraska Worker Training Program
Provides grants to assist firms in the retraining and upgrading of existing employees. Grants are awarded on a quarterly cycle. A match of at least one dollar of employer’s funds (including wages for participating employees) for each dollar of state funds is required. Use of program funds is extremely flexible. The type and length of training programs, training vendors and materials are chosen by the company. Click here to learn more about the Worker Training Program.
- Work Opportunity Tax Credit (WOTC)
Provides a credit against federal income tax liability of up to $2,400 for each qualified hire. Qualified employees include 18 to 24-year-old food stamp recipients, disabled persons, low-income ex-felons, and persons receiving SSI benefits. Here is additional information on this program.
- In addition to specific incentives, the business climate is enhanced by:
- No state-levied property tax.
- ‘Sales-only’ corporate income tax apportionment factor.
- No property tax on business inventories.
- No tax on intangibles.
- Performance-based state and local sales tax credits and refunds for qualifying firms.
- Personal property tax depreciation schedules permitting full 100% depreciation.
- No sales tax on electricity, coal, gas and fuel oils when more than one-half used directly in processing or manufacturing.
- No sales or use tax on ingredients used in manufacturing or processing of a product destined for ultimate retail use.
- No sales tax on most food or prescription drugs.
- No sales tax on common carriers’ vehicles and replacement parts.
Sales tax refund on air and water pollution control equipment.
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