Do I have to file an application to get Employment Expansion and Investment Incentive Act benefits, and what must the application show?

Plain-English summary

Nebraska's Employment Expansion and Investment Incentive Act rewards smaller-community businesses that add jobs and investment. In 2003, LB 608 changed the rules: starting with tax years beginning on or after January 1, 2004, a business must file an application before it can receive any benefits — the credits are no longer automatic. This ruling explains the new application requirement.

When and what to file. The application may be filed on or after the first day of the tax year and must request the total amount of desired benefits for additional investment and employment for both the year the application is filed and the following tax year.

The expansion the plan must show. The application must contain a plan of expansion that includes:

• a minimum of five (5) new full-time-equivalent Nebraska employees who will be paid above the minimum required wage, and
• $250,000 of net new investment.

The planned expansion must be located in counties each with a population of no more than 25,000, or in designated enterprise zones.

The annual cap and filing order. There is a statutory limit on the total benefits that may be approved for any year. Requested benefits are applied against the limit in the order complete applications are filed — so timing matters. An application is treated as filed on the day it is received by the Department, or on its U.S. postmark date if mailed. If an application is incomplete, the Department notifies the applicant within 15 business days, and the filing date becomes the last date the missing information is supplied. The Department isn't responsible for delays in completing the application.

The checklist and statutory items. A Department application checklist must be part of a complete application; each item must be completed or an explanation attached for why it doesn't apply. The statutory requirements the checklist satisfies are:

1. a written statement describing the full expected employment and investment for a qualified business in Nebraska;
2. sufficient documents, plans, and specifications required by the Tax Commissioner to support the plan and define a project; and
3. an application fee of five hundred dollars ($500).

What this means for you

A business planning to claim these incentives (2004 and later)

Don't assume you can simply claim the credit on your return — you have to apply first, and you should apply early in the tax year, because benefits are awarded against a capped pool in the order complete applications arrive. Build your application around the two thresholds (5 new FTE Nebraska jobs above the minimum wage and $250,000 net new investment) in an eligible location (a county of 25,000 or fewer, or a designated enterprise zone), use the Department's checklist, and include the $500 fee.

Getting the timing right

File a complete application. An incomplete one doesn't hold your place — your effective date slips to whenever you finally supply the missing information, which can cost you if the annual cap fills up.

Common questions

Q: Is the incentive automatic, or do I have to apply?
A: For tax years beginning on or after January 1, 2004, you must file an application before receiving any benefits under the Act.

Q: What are the minimum job and investment thresholds?
A: At least five new full-time-equivalent Nebraska employees paid above the minimum required wage, and $250,000 of net new investment.

Q: Where must the expansion be located?
A: In a county with a population of no more than 25,000, or in a designated enterprise zone.

Q: Is there a fee?
A: Yes — a $500 application fee is one of the statutory requirements.

Citations and references

• Laws 2003, LB 608 — amends the Employment Expansion and Investment Incentive Act to require an application for benefits for tax years beginning on or after January 1, 2004.
• Employment Expansion and Investment Incentive Act — the underlying Nebraska incentive program (five-employee / $250,000-investment thresholds; 25,000-population-county or enterprise-zone location).

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr290301_608_app.pdf

Original ruling text

Revenue Ruling 29-03-1
Economic Development Tax Incentives
December 18, 2003
Economic Development Tax Incentives -- LB 608 Application. AN APPLICATION IS
REQUIRED FOR RECEIPT OF BENEFITS UNDER THE EMPLOYMENT EXPANSION AND
INVESTMENT INCENTIVE ACT AS AMENDED BY LAWS 2003, LB 608.
For tax years beginning on or after January 1, 2004, an application is required before any benefits
may be received under the Employment Expansion and Investment Incentive Act. The application
may be filed on or after the first day of the tax year and must request the total amount of the desired
benefits for additional investment and employment for the year the application is filed and the
following tax year. The application must contain a plan of expansion that includes a minimum
of five (5) new full-time equivalent Nebraska employees who will be paid above the minimum
required wage, and $250,000 of net new investment. The planned expansion must be in counties
each with a population of no more than 25,000 or in designated enterprise zones.
There is a statutory limit on the total amount of benefits that may be approved for any year. The
requested benefits will be applied to the limit in the order in which the complete applications were
filed. A complete application will be considered filed on the day it is received by the Department,
or the day it was mailed if marked with a U.S. postmark. If an application is not complete when
submitted, the Nebraska Department of Revenue will send notification within 15 business days of
receipt of the application advising the applicant that it is not complete. The date of the application
will be the last date on which information necessary to complete the application is filed. The
Department is not responsible for any delay in completing the application.
The Nebraska Department of Revenue has prepared an application checklist that must be a part of
a complete application. Each item on the checklist must be completed or an explanation as to why
the item is not applicable must be attached. The application checklist is available on the website
of the Nebraska Department of Revenue, www.revenue.state.ne.us, or may be requested from the
Department.
When the checklist is completed, the application satisfies the statutory requirements which are:
(a) a written statement describing the full expected employment and investment for a qualified
business in this state;
(b) sufficient documents, plans, and specifications as required by the Tax Commissioner to
support the plan and to define a project; and
(c) an application fee of five hundred dollars.
APPROVED:

Mary Jane Egr
State Tax Commissioner
December 18, 2003

Nebraska Department of Revenue, PO Box 94818, Lincoln, Nebraska 68509-4818