Nebraska Advantage
Rural Development Act
Description of Benefits


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General Information:

The Nebraska Advantage Rural Development Act requires a taxpayer involved in a qualifying business to file an application with the Department. For a list of qualified business activities, click here. There are three different application levels under Nebraska Advantage Rural Development: Level 1, Level 2, and Livestock Modernization.


Application Information:

An application may be filed on or after the first day of the tax year. The application requests the total amount of expected credits for additional investment and employment in the year the application is filed and the following tax year. There is a statutory limit on the total benefits that may be approved for a year. The requested benefits are applied to the limit in the order in which the complete applications were filed.

For applications filed on or after October 1, 2009, taxpayers must utilize E-verify to verify that new employees are legally able to work in the United States.


Rural Development Act Available Funds and Requested Benefits:

Fiscal Year Ending

Number of Applicants

 Total Requested Benefits

 Statutory Limit on Benefits

6/30/2010

10

 $1,271,854

 $4,000,000

6/30/2009

34

 3,000,000

3,000,000

6/30/2008

34

3,000,000

3,000,000

6/30/2007

15

 1,555,250

3,000,000

6/30/2006

15

2,086,000

2,500,000

6/30/2005

12

713,000

2,500,000


Requirements by Application Level:

Level 1. Project applications under Level 1 require a plan of expansion that includes a minimum of two new full-time equivalent (FTE) employees who are paid at least the minimum required wage, and $125,000 of net, new investment. The expansion must occur in a county with a population of less than 15,000 inhabitants, in an enterprise zone, a village, or an eligible census tract. Level 1 applications were first accepted for tax years beginning on or after January 1, 2006.  For more information on the required wage rate and whether a location is eligible under Level 1, click here.

Level 2. Project applications under Level 2 require a plan of expansion that includes a minimum of five new FTE employees who are paid at least the minimum required wage, and $250,000 of net, new investment. The expansion must occur in a county with a population of less than 25,000 inhabitants, in an enterprise zone, or a city of second class. Level 2 applications were first accepted for tax years beginning on or after January 1, 2004.  For more information on the required wage rate and whether a location is eligible under Level 2, click here.

Livestock Modernization. Livestock Modernization is defined as the construction, improvement, or acquisition of depreciable buildings, facilities, or equipment for livestock housing, confinement, feeding, production, and waste management. The project must have a net, new investment of at least $50,000. The expansion may occur in any county in Nebraska.  There is no employment increase required. Livestock Modernization project applications were first accepted as of January 1, 2007.


Benefits by Application Level:

Level 1 and Level 2. If the Level 1 or Level 2 taxpayer reaches and maintains the required levels of investment and employment, it is eligible for a $3,000 credit for each new FTE employee, and a $2,750 credit for each $50,000 net gain in qualified investment. The credits may be used: to obtain a refund of state sales and use taxes paid; against the income tax liability of the taxpayer; or as a refundable credit claimed on the income tax return of the taxpayer.

Livestock Modernization. If the Livestock Modernization taxpayer reaches and maintains the required level of investment, it is eligible to earn credits at 10% of investment. Each project is limited to a maximum of $30,000 in credits. The credits may be used: to obtain a refund of state sales and use taxes paid; against the income tax liability of the taxpayer; or as a refundable credit claimed on the income tax return of the taxpayer.


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