The business/government partnership is alive and well in Nebraska. Emphasizing the state's ongoing commitment to vibrant economic growth, the Legislature has passed a series of groundbreaking laws designed to make Nebraska an even better place to do business.
The Nebraska Advantage Act is designed to provide businesses with a meaningful incentives package to reduce their taxes on income, sales, withholding and personal property for up to 15 years.
Nebraska's principal incentive package consists of several components; Nebraska Advantage, Nebraska Rural Advantage Levels One and Two,Nebraska Customized Job-Training Advantage, Nebraska Research and Development Advantage and Nebraska Microenterprise Tax Credit Advantage.
Through Community Improvement Financing, firms that buy land to develop projects in blighted areas can benefit from public improvements associated with private development projects that are financed based on projected increases in property tax revenues.
The Nebraska Advantage package benefits businesses with:
- Investment credits
- Wage credits
- Sales tax refund
- Customized job training
- State and local sales tax exemptions for purchases of manufacturing machinery, equipment and related services
- Research and development tax credits
- Microenterprise tax credits
- Inventory tax exemptions
Nebraska also offers:
- Employees with an unmatched work ethic
- Central location offering an integrated system of interstates, mainline railroads, and airports
- Industrial sites and buildings ready for immediate occupancy
- A 100% public power system – the only state that offers it – providing customers with electrical power at some of the lowest rates in the nation
Expand or grow your business in Nebraska, and see how it will positively impact your bottom line.
Visit the Nebraska Advantage website at www.nebraskaadvantage.biz
• Nebraska Advantage Brochure
Community Improvement Financing
Community Improvement Financing (CIF), Nebraska's version of tax increment financing, is a method of financing public improvements associated with a private development project in a blighted area by using the projected increase in the property tax revenue resulting from the private development. This tax revenue increase is used to pay for the public improvements or is pledged to repay bonds issued by the local government or loans used to finance these improvements.
In effect, CIF can reduce developer capitalization to a level that makes investment feasible. Revenue bonds can be issued to finance all or part of a site's public pre-construction improvements. Public improvements include land purchase, clearance and sale, construction of streets, sidewalks, utilities, parks or other similar public spaces necessary in site preparation.
Community Development Block Grants
The Community Development Block Grant Program is geared towards business development that "creates jobs." This loan program mixes interest rates to reduce the financing costs of the participating business. A beneficial interest rate is created with the involvement of a local bank and a federal loan guarantee program.
These direct loans or loan guarantees can be used for fixed assets, real estate and working capital for projects.
Nebraska Customized Job-Training Advantage
Provides a flexible and discretionary job-training program that will offer $15 million in customized job-training assistance designated for 2006 and 2007. You can design your own training, or a statewide training team can assist with the training needs assessments; training plans, curriculum development and training instruction. To view additional information, please see the Nebraska Customized Job Training Advantage web page at www.nebraskaadvantage.biz/customizedjobtraining.htm .
Nebraska Worker Training Program
The Nebraska Worker Training Program (WTP), administered by the Department of Labor, provides grants to established businesses to fund training projects for existing workers in the state.
Grants are distributed based on:
1) size of the business (40 percent to small businesses with less than 100 employees; 40 percent to medium to large businesses with 100 or more employees; and 20 percent to employer demonstration projects)
2) type of industry
3) geographic location
4) number of demand-occupations that benefit the economy and broaden the worker skill-pool
Established, for-profit businesses that contribute to the State Unemployment Insurance Trust fund are eligible for the program (except employee-leasing firms). Businesses provide matching contributions equal to or greater than the grant funds requested.
For additional information please visit the Nebraska Workforce Development Worker Training web page at http://www.dol.state.ne.us/nwd/center.cfm?PRICAT=2&SUBCAT=2B .
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit (WOTC), administered by the Nebraska Department of Labor, provides a credit against federal income tax liability of up to $2,400 for each qualified person hired. For those employees working 400 hours or more, the credit is 40 percent of the first $6,000 in wages. For those employees working less than 400 hours but at least 120 hours, the credit is 25 percent of the first $6,000 in wages. Also, 16 and 17 year-old summer youth employees who are residents of a federally designated Enterprise Zone are eligible for WOTC benefits on the first $3,000 of wages.
Categories of workers eligible for WOTC benefits include Enterprise Zone residents, members of families that have received Aid to Families with Dependent Children or Temporary Assistance for needy families, low income veterans, 18 to 24 year-old food stamp recipients, 16 and 17 year-old residents of federally designated Enterprise Zones hired for summer employment, disabled persons who have completed or are completing rehabilitative services, low income ex-felons and persons who have received Supplementary Security Income (SSI).
Nebraska Research and Development Advantage
Offers a tax credit for research and development activities undertaken by any business entity. The credit is equal to 3 percent of research and development expenditures that are greater than the average of the previous two years of research and development spending. An important feature: businesses with little or no income may take advantage of the tax credit by receiving a sales tax refund or a refundable income tax credit.
Nebraska Microenterprise Tax Credit Advantage
Provides a 20 percent refundable investment tax credit to micro-businesses on new investment in targeted communities. Applicants may qualify for a minimum $10,000 throughout the life of the program. The credit is geared to companies with five or fewer employees, including start-ups. Credits are approved through an application process with the Nebraska Department of Revenue and evaluated on expected local economic impact. The credits would apply to new expenditures for wages, buildings and non-vehicle depreciable personal property. To view the application, please visit the Nebraska Advantage website's Microenterprise Development Fund Enhancement web page at http://www.nebraskaadvantage.biz/microenterprise.htm .
Capital Gains Exemption
Nebraska law provides for a one-time exemption from state personal income tax on gains realized from selling or exchanging the stock of a corporation acquired by an employee with that corporation. The corporation must have done business in Nebraska for at least three years, and must have a minimum of five shareholders.
This provision is of major value to growth-oriented companies that use company stock options as part of employee compensation or retirement programs, thus providing a company with an attractive recruiting device.
Small Business Innovation Research Program (SBIR)
The objectives of this federal program are to stimulate technological innovation, help small businesses meet federal government research and development needs, encourage participation of minority and disadvantaged persons, and increasing private sector commercialization of federal research and development projects. Grants are provided through eleven federal agencies having research and development budgets of over $100 million and are awarded to projects meeting the research needs of these agencies. Funding agencies include the Departments of Agriculture, Commerce, Defense, Education, Energy, Transportation, Health and Human Services, and the Environmental Protection Agency.
Funding is provided in two phases. In Phase I, companies may use funds to evaluate and demonstrate the technical feasibility of a project. Phase I research efforts are typically six months in duration and awards do not normally exceed $100,000. In Phase II, funding is to be used to continue development of the technology and include the principal R&D effort. Phase II grants are typically 24 months in duration and generally do not exceed $750,000.
To be eligible for an SBIR grant, a company must meet all of the following criteria.
· No more than 500 employees (including affiliates).
· A for-profit organization.
· Located in the United States.
· At least 50% owned and controlled by U. S. citizens or lawfully admitted permanent residents.
Other aspects of state tax law that provide positive investment factors for businesses are:
- No property tax on business inventories, including raw materials, goods in process and finished goods.
- No tax on intangibles.
- Sales tax refund for pollution-control equipment.
- No sales or use tax on ingredients used in manufacturing or processing of a product destined for ultimate retail use.
- Sales tax exemption on sales of common carrier vehicles and replacement parts to recognized common carriers.
- No sales tax on water used to irrigate agricultural land or in manufacturing.
- For firms engaged in international commerce, Omaha has an established general-purpose "foreign trade zone." Businesses may exhibit, store and assemble goods, use them in manufacturing, or otherwise process goods within the zone, and defer paying duties until the goods enter U.S. Customs territory from the zone. If these goods are exported, no duty or excise taxes are due.
- Purchases of electricity, coal, gas, fuel oil, diesel fuel, tractor fuel, propane, coke, nuclear fuel, and butane are exempted from sales and use tax when more than 50 percent of the amount purchased is used directly in the processing, manufacturing, or refining of tangible property, or in the generation of electricity.
- Personal property tax depreciation schedules permitting full, 100 percent depreciation for property tax assessment purposes.
View the list of links for Economic Development