LB235 LB235
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 235
Introduced by Wayne, 13.
Read first time January 10, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to the ImagiNE Nebraska Act; to amend sections
2 77-6801, 77-6803, 77-6831, and 77-6832, Revised Statutes Cumulative
3 Supplement, 2022; to transfer a definition; to change provisions
4 relating to the use of credits for certain child care expenses; to
5 harmonize provisions; and to repeal the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-6801, Revised Statutes Cumulative Supplement,
2 2022, is amended to read:
3 77-6801 Sections 77-6801 to 77-6843 and section 3 of this act shall
4 be known and may be cited as the ImagiNE Nebraska Act.
5 Sec. 2. Section 77-6803, Revised Statutes Cumulative Supplement,
6 2022, is amended to read:
7 77-6803 For purposes of the ImagiNE Nebraska Act, the definitions
8 found in sections 77-6804 to 77-6825 and section 3 of this act shall be
9 used.
10 Sec. 3. Economic redevelopment area means an area in which (1) the
11 average rate of unemployment in the area during the period covered by the
12 most recent federal decennial census or American Community Survey 5-Year
13 Estimate is at least one hundred fifty percent of the average rate of
14 unemployment in the state during the same period and (2) the average
15 poverty rate in the area exceeds twenty percent for the total federal
16 census tract or tracts or federal census block group or block groups in
17 the area.
18 Sec. 4. Section 77-6831, Revised Statutes Cumulative Supplement,
19 2022, is amended to read:
20 77-6831 (1) A taxpayer shall be entitled to the sales and use tax
21 incentives contained in subsection (2) of this section if the taxpayer:
22 (a) Attains a cumulative investment in qualified property of at
23 least five million dollars and hires at least thirty new employees at the
24 qualified location or locations before the end of the ramp-up period;
25 (b) Attains a cumulative investment in qualified property of at
26 least two hundred fifty million dollars and hires at least two hundred
27 fifty new employees at the qualified location or locations before the end
28 of the ramp-up period; or
29 (c) Attains a cumulative investment in qualified property of at
30 least fifty million dollars at the qualified location or locations before
31 the end of the ramp-up period. To receive incentives under this
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1 subdivision, the taxpayer must meet the following conditions:
2 (i) The average compensation of the taxpayer's employees at the
3 qualified location or locations for each year of the performance period
4 must equal at least one hundred fifty percent of the Nebraska statewide
5 average hourly wage for the year of application;
6 (ii) The taxpayer must offer to its employees who constitute full-
7 time employees as defined and described in section 4980H of the Internal
8 Revenue Code of 1986, as amended, and the regulations for such section,
9 at the qualified location or locations for each year of the performance
10 period, the opportunity to enroll in minimum essential coverage under an
11 eligible employer-sponsored plan, as those terms are defined and
12 described in section 5000A of the Internal Revenue Code of 1986, as
13 amended, and the regulations for such section; and
14 (iii) The taxpayer must offer a sufficient package of benefits as
15 described in subdivision (1)(j) of section 77-6828.
16 (2) A taxpayer meeting the requirements of subsection (1) of this
17 section shall be entitled to the following sales and use tax incentives:
18 (a) A refund of all sales and use taxes paid under the Local Option
19 Revenue Act, the Nebraska Revenue Act of 1967, the Qualified Judgment
20 Payment Act, and sections 13-319, 13-324, and 13-2813 from the date of
21 the complete application through the meeting of the required levels of
22 employment and investment for all purchases, including rentals, of:
23 (i) Qualified property used at the qualified location or locations;
24 (ii) Property, excluding motor vehicles, based in this state and
25 used in both this state and another state in connection with the
26 qualified location or locations except when any such property is to be
27 used for fundraising for or for the transportation of an elected
28 official;
29 (iii) Tangible personal property by a contractor or repairperson
30 after appointment as a purchasing agent of the owner of the improvement
31 to real estate when such property is incorporated into real estate at the
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1 qualified location or locations. The refund shall be based on fifty
2 percent of the contract price, excluding any land, as the cost of
3 materials subject to the sales and use tax;
4 (iv) Tangible personal property by a contractor or repairperson
5 after appointment as a purchasing agent of the taxpayer when such
6 property is annexed to, but not incorporated into, real estate at the
7 qualified location or locations. The refund shall be based on the cost of
8 materials subject to the sales and use tax that were annexed to real
9 estate; and
10 (v) Tangible personal property by a contractor or repairperson after
11 appointment as a purchasing agent of the taxpayer when such property is
12 both (A) incorporated into real estate at the qualified location or
13 locations and (B) annexed to, but not incorporated into, real estate at
14 the qualified location or locations. The refund shall be based on fifty
15 percent of the contract price, excluding any land, as the cost of
16 materials subject to the sales and use tax; and
17 (b) An exemption from all sales and use taxes under the Local Option
18 Revenue Act, the Nebraska Revenue Act of 1967, the Qualified Judgment
19 Payment Act, and sections 13-319, 13-324, and 13-2813 on the types of
20 purchases, including rentals, listed in subdivision (a) of this
21 subsection for such purchases, including rentals, occurring during each
22 year of the performance period in which the taxpayer is at or above the
23 required levels of employment and investment, except that the exemption
24 shall be for the actual materials purchased with respect to subdivisions
25 (2)(a)(iii), (iv), and (v) of this section. The Tax Commissioner shall
26 issue such rules, regulations, certificates, and forms as are appropriate
27 to implement the efficient use of this exemption.
28 (3)(a) Upon execution of the agreement, the taxpayer shall be issued
29 a direct payment permit under section 77-2705.01, notwithstanding the
30 three million dollars in purchases limitation in subsection (1) of
31 section 77-2705.01, for each qualified location specified in the
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1 agreement, unless the taxpayer has opted out of this requirement in the
2 agreement. For any taxpayer who is issued a direct payment permit, until
3 such taxpayer makes the investment in qualified property and hires the
4 new employees at the qualified location or locations as specified in
5 subsection (1) of this section, the taxpayer must pay and remit any
6 applicable sales and use taxes as required by the Tax Commissioner.
7 (b) If the taxpayer makes the investment in qualified property and
8 hires the new employees at the qualified location or locations as
9 specified in subsection (1) of this section, the taxpayer shall receive
10 the sales tax refunds described in subdivision (2)(a) of this section.
11 For any year in which the taxpayer is not at the required levels of
12 employment and investment, the taxpayer shall report all sales and use
13 taxes owed for the period on the taxpayer's tax return.
14 (4) The taxpayer shall be entitled to one of the following credits
15 for payment of wages to new employees:
16 (a)(i) If a taxpayer attains a cumulative investment in qualified
17 property of at least one million dollars and hires at least ten new
18 employees at the qualified location or locations before the end of the
19 ramp-up period, the taxpayer shall be entitled to a credit equal to four
20 percent times the average wage of new employees times the number of new
21 employees. Wages in excess of one million dollars paid to any one
22 employee during the year shall be excluded from the calculations under
23 this subdivision;
24 (ii) If the taxpayer attains a cumulative investment in qualified
25 property of at least one million dollars and hires at least ten new
26 employees at the qualified location or locations before the end of the
27 ramp-up period and the number of new employees and investment are at a
28 qualified location in a county in Nebraska with a population of one
29 hundred thousand or greater, and at which the majority of the business
30 activities conducted are described in subdivision (1)(a) or (1)(n) of
31 section 77-6818, the taxpayer shall be entitled to a credit equal to four
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1 percent times the average wage of new employees times the number of new
2 employees. Wages in excess of one million dollars paid to any one
3 employee during the year shall be excluded from the calculations under
4 this subdivision; or
5 (iii) If the taxpayer attains a cumulative investment in qualified
6 property of at least one million dollars and hires at least ten new
7 employees at the qualified location or locations before the end of the
8 ramp-up period and the number of new employees and investment are at a
9 qualified location or locations within one or more counties in Nebraska
10 that each have a population of less than one hundred thousand, and at
11 which the majority of the business activities conducted are described in
12 subdivision (1)(a) or (1)(n) of section 77-6818, the taxpayer shall be
13 entitled to a credit equal to six percent times the average wage of new
14 employees times the number of new employees. For purposes of meeting the
15 ten-employee requirement of this subdivision, the number of new employees
16 shall be multiplied by two. Wages in excess of one million dollars paid
17 to any one employee during the year shall be excluded from the
18 calculations under this subdivision;
19 (b) If a taxpayer hires at least twenty new employees at the
20 qualified location or locations before the end of the ramp-up period, the
21 taxpayer shall be entitled to a credit equal to five percent times the
22 average wage of new employees times the number of new employees if the
23 average wage of the new employees equals at least one hundred percent of
24 the Nebraska statewide average hourly wage for the year of application.
25 The credit shall equal seven percent times the average wage of new
26 employees times the number of new employees if the average wage of the
27 new employees equals at least one hundred fifty percent of the Nebraska
28 statewide average hourly wage for the year of application. The credit
29 shall equal nine percent times the average wage of new employees times
30 the number of new employees if the average wage of the new employees
31 equals at least two hundred percent of the Nebraska statewide average
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1 hourly wage for the year of application. Wages in excess of one million
2 dollars paid to any one employee during the year shall be excluded from
3 the calculations under this subdivision;
4 (c) If a taxpayer attains a cumulative investment in qualified
5 property of at least five million dollars and hires at least thirty new
6 employees at the qualified location or locations before the end of the
7 ramp-up period, the taxpayer shall be entitled to a credit equal to five
8 percent times the average wage of new employees times the number of new
9 employees if the average wage of the new employees equals at least one
10 hundred percent of the Nebraska statewide average hourly wage for the
11 year of application. The credit shall equal seven percent times the
12 average wage of new employees times the number of new employees if the
13 average wage of the new employees equals at least one hundred fifty
14 percent of the Nebraska statewide average hourly wage for the year of
15 application. The credit shall equal nine percent times the average wage
16 of new employees times the number of new employees if the average wage of
17 the new employees equals at least two hundred percent of the Nebraska
18 statewide average hourly wage for the year of application. Wages in
19 excess of one million dollars paid to any one employee during the year
20 shall be excluded from the calculations under this subdivision;
21 (d) If a taxpayer attains a cumulative investment in qualified
22 property of at least two hundred fifty million dollars and hires at least
23 two hundred fifty new employees at the qualified location or locations
24 before the end of the ramp-up period, the taxpayer shall be entitled to a
25 credit equal to seven percent times the average wage of new employees
26 times the number of new employees if the average wage of the new
27 employees equals at least one hundred fifty percent of the Nebraska
28 statewide average hourly wage for the year of application. The credit
29 shall equal nine percent times the average wage of new employees times
30 the number of new employees if the average wage of the new employees
31 equals at least two hundred percent of the Nebraska statewide average
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1 hourly wage for the year of application. Wages in excess of one million
2 dollars paid to any one employee during the year shall be excluded from
3 the calculations under this subdivision; or
4 (e) If a taxpayer attains a cumulative investment in qualified
5 property of at least two hundred fifty thousand dollars but less than one
6 million dollars and hires at least five new employees at the qualified
7 location or locations before the end of the ramp-up period and the number
8 of new employees and investment are at a qualified location within an
9 economic redevelopment area, the taxpayer shall be entitled to a credit
10 equal to six percent times the average wage of new employees times the
11 number of new employees if the average wage of the new employees equals
12 at least seventy percent of the Nebraska statewide average hourly wage
13 for the year of application. Wages in excess of one million dollars paid
14 to any one employee during the year shall be excluded from the
15 calculations under this subdivision. For purposes of this subdivision,
16 economic redevelopment area means an area in which (i) the average rate
17 of unemployment in the area during the period covered by the most recent
18 federal decennial census or American Community Survey 5-Year Estimate is
19 at least one hundred fifty percent of the average rate of unemployment in
20 the state during the same period and (ii) the average poverty rate in the
21 area exceeds twenty percent for the total federal census tract or tracts
22 or federal census block group or block groups in the area.
23 (5) The taxpayer shall be entitled to one of the fo