Revenue Ruling 29-14-1
Nebraska Advantage Tax Incentives

Supersedes Revenue Ruling 29-13-4, issued November 5, 2013

Wage and Investment Levels for
2015 Nebraska Advantage Act Applications

October 24, 2014

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

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Issue

What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2015?

Conclusion

Beginning with applications filed on or after January 1, 2015, an applicant must meet the following minimum wage and investment requirements to qualify for benefits under the Nebraska Advantage Act:

Analysis

The Nebraska Advantage Act requires investment thresholds for all projects, except for Tier 5 renewable energy projects, to be indexed for inflation on October 1 of each year. These new investment thresholds apply to all applications filed on or after January 1 of the following year. See Neb. Rev. Stat. § 77-5725(9). The index is calculated as the result of the 12 most recent Producer Price Indexes (PPI) (published monthly by the U.S. Department of Labor, Bureau of Labor Statistics), divided by the PPI for the first quarter of 2006 for Tier 1, Tier 2, Tier 4, and Tier 5 applicants, the first quarter of 2008 for Tier 6 applicants, or the first quarter of 2012 for Tier 2 large data center applicants, multiplied by the applicable investment threshold for each respective tier. See Neb. Rev. Stat. § 77-5725(1). The result is rounded to the next lowest $1 million. Adjustments do not apply to projects after the year of application.

Under the Nebraska Advantage Act, Tier 1, Tier 2, Tier 2 large data center project, Tier 3, and Tier 4 applicants may be entitled to a credit of 3% to 6% of the average wage paid to new employees, if the wage equals at least 60% of the Nebraska average annual wage for the year of application. Tier 6 applicants may be entitled to a credit of 10% of the average wage paid to all employees employed at the project (excluding base-year employees) if the wage exceeds the greater of 200% of the county average weekly wage, or 150% of the state average weekly wage for the year of application. Wages are defined as compensation subject to the federal Medicare tax. Also, the wage credit is not available for compensation in excess of $1 million paid in a year to any employee for a project in any tier. See Neb. Rev. Stat. § 77-5725(3) and (4).

Wage levels for the Nebraska Advantage Rural Development Act are set by Neb. Rev. Stat. § 77-27,188(1)(b) based on the growth in the rural Nebraska average wage. The wage limit for the Nebraska Advantage Microenterprise Tax Credit Act is established in Neb. Rev. Stat. § 77-5903 at 150% of the Nebraska average weekly wage.

Nebraska Advantage Act
Tier
2014 Required Investment
2015 Required Investment
Tier 1
$1 million
$1 million
Tier 2
$3 million
$3 million
Tier 2 Large Data Center
$201 million
$203 million
Tier 4
$12 million
$12 million
Tier 5
$37 million
$37 million
Tier 5 Renewable Energy
$20 million
$20 million
Tier 6
$11 million or $110 million
$11 million or $111 million
Compensation Credit
2014 Required
Annual Wage Level
2015 Required
Annual Wage Level
3%
$23,561
$23,979
4%
$29,451
$29,974
5%
$39,268
$39,965
6%
$49,085
$49,956
10%
  $58,902*
  $58,948*

*Tier 6 only, state-wide average. Wage levels for each county available here.

Nebraska Advantage Rural Development Act
2014 Required Wage Level
2015 Required Wage Level
$11.96 per hour
$12.33 per hour

Nebraska Advantage Microenterprise Tax Credit Act
2014 Required Wage Level
2015 Required Wage Level
$1,133 per week
$1,154 per week

APPROVED:
Kim Conroy
Tax Commissioner

October 24, 2014