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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1113
Introduced by Meyer, 41; Albrecht, 17; Ballard, 21; Bosn, 25; Brandt, 32;
DeKay, 40; Dorn, 30; Hansen, 16; Holdcroft, 36; Hughes, 24;
Ibach, 44; Jacobson, 42; Kauth, 31; Lippincott, 34; Lowe,
37; Murman, 38; Sanders, 45; von Gillern, 4.
Read first time January 10, 2024
Committee: Revenue
1 A BILL FOR AN ACT relating to the ImagiNE Nebraska Act; to amend section
2 77-6831, Revised Statutes Cumulative Supplement, 2022; to change
3 provisions relating to the types of property receiving a property
4 tax exemption; and to repeal the original section.
5 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-6831, Revised Statutes Cumulative Supplement,
2 2022, is amended to read:
3 77-6831 (1) A taxpayer shall be entitled to the sales and use tax
4 incentives contained in subsection (2) of this section if the taxpayer:
5 (a) Attains a cumulative investment in qualified property of at
6 least five million dollars and hires at least thirty new employees at the
7 qualified location or locations before the end of the ramp-up period;
8 (b) Attains a cumulative investment in qualified property of at
9 least two hundred fifty million dollars and hires at least two hundred
10 fifty new employees at the qualified location or locations before the end
11 of the ramp-up period; or
12 (c) Attains a cumulative investment in qualified property of at
13 least fifty million dollars at the qualified location or locations before
14 the end of the ramp-up period. To receive incentives under this
15 subdivision, the taxpayer must meet the following conditions:
16 (i) The average compensation of the taxpayer's employees at the
17 qualified location or locations for each year of the performance period
18 must equal at least one hundred fifty percent of the Nebraska statewide
19 average hourly wage for the year of application;
20 (ii) The taxpayer must offer to its employees who constitute full-
21 time employees as defined and described in section 4980H of the Internal
22 Revenue Code of 1986, as amended, and the regulations for such section,
23 at the qualified location or locations for each year of the performance
24 period, the opportunity to enroll in minimum essential coverage under an
25 eligible employer-sponsored plan, as those terms are defined and
26 described in section 5000A of the Internal Revenue Code of 1986, as
27 amended, and the regulations for such section; and
28 (iii) The taxpayer must offer a sufficient package of benefits as
29 described in subdivision (1)(j) of section 77-6828.
30 (2) A taxpayer meeting the requirements of subsection (1) of this
31 section shall be entitled to the following sales and use tax incentives:
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1 (a) A refund of all sales and use taxes paid under the Local Option
2 Revenue Act, the Nebraska Revenue Act of 1967, the Qualified Judgment
3 Payment Act, and sections 13-319, 13-324, and 13-2813 from the date of
4 the complete application through the meeting of the required levels of
5 employment and investment for all purchases, including rentals, of:
6 (i) Qualified property used at the qualified location or locations;
7 (ii) Property, excluding motor vehicles, based in this state and
8 used in both this state and another state in connection with the
9 qualified location or locations except when any such property is to be
10 used for fundraising for or for the transportation of an elected
11 official;
12 (iii) Tangible personal property by a contractor or repairperson
13 after appointment as a purchasing agent of the owner of the improvement
14 to real estate when such property is incorporated into real estate at the
15 qualified location or locations. The refund shall be based on fifty
16 percent of the contract price, excluding any land, as the cost of
17 materials subject to the sales and use tax;
18 (iv) Tangible personal property by a contractor or repairperson
19 after appointment as a purchasing agent of the taxpayer when such
20 property is annexed to, but not incorporated into, real estate at the
21 qualified location or locations. The refund shall be based on the cost of
22 materials subject to the sales and use tax that were annexed to real
23 estate; and
24 (v) Tangible personal property by a contractor or repairperson after
25 appointment as a purchasing agent of the taxpayer when such property is
26 both (A) incorporated into real estate at the qualified location or
27 locations and (B) annexed to, but not incorporated into, real estate at
28 the qualified location or locations. The refund shall be based on fifty
29 percent of the contract price, excluding any land, as the cost of
30 materials subject to the sales and use tax; and
31 (b) An exemption from all sales and use taxes under the Local Option
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1 Revenue Act, the Nebraska Revenue Act of 1967, the Qualified Judgment
2 Payment Act, and sections 13-319, 13-324, and 13-2813 on the types of
3 purchases, including rentals, listed in subdivision (a) of this
4 subsection for such purchases, including rentals, occurring during each
5 year of the performance period in which the taxpayer is at or above the
6 required levels of employment and investment, except that the exemption
7 shall be for the actual materials purchased with respect to subdivisions
8 (2)(a)(iii), (iv), and (v) of this section. The Tax Commissioner shall
9 issue such rules, regulations, certificates, and forms as are appropriate
10 to implement the efficient use of this exemption.
11 (3)(a) Upon execution of the agreement, the taxpayer shall be issued
12 a direct payment permit under section 77-2705.01, notwithstanding the
13 three million dollars in purchases limitation in subsection (1) of
14 section 77-2705.01, for each qualified location specified in the
15 agreement, unless the taxpayer has opted out of this requirement in the
16 agreement. For any taxpayer who is issued a direct payment permit, until
17 such taxpayer makes the investment in qualified property and hires the
18 new employees at the qualified location or locations as specified in
19 subsection (1) of this section, the taxpayer must pay and remit any
20 applicable sales and use taxes as required by the Tax Commissioner.
21 (b) If the taxpayer makes the investment in qualified property and
22 hires the new employees at the qualified location or locations as
23 specified in subsection (1) of this section, the taxpayer shall receive
24 the sales tax refunds described in subdivision (2)(a) of this section.
25 For any year in which the taxpayer is not at the required levels of
26 employment and investment, the taxpayer shall report all sales and use
27 taxes owed for the period on the taxpayer's tax return.
28 (4) The taxpayer shall be entitled to one of the following credits
29 for payment of wages to new employees:
30 (a)(i) If a taxpayer attains a cumulative investment in qualified
31 property of at least one million dollars and hires at least ten new
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1 employees at the qualified location or locations before the end of the
2 ramp-up period, the taxpayer shall be entitled to a credit equal to four
3 percent times the average wage of new employees times the number of new
4 employees. Wages in excess of one million dollars paid to any one
5 employee during the year shall be excluded from the calculations under
6 this subdivision;
7 (ii) If the taxpayer attains a cumulative investment in qualified
8 property of at least one million dollars and hires at least ten new
9 employees at the qualified location or locations before the end of the
10 ramp-up period and the number of new employees and investment are at a
11 qualified location in a county in Nebraska with a population of one
12 hundred thousand or greater, and at which the majority of the business
13 activities conducted are described in subdivision (1)(a) or (1)(n) of
14 section 77-6818, the taxpayer shall be entitled to a credit equal to four
15 percent times the average wage of new employees times the number of new
16 employees. Wages in excess of one million dollars paid to any one
17 employee during the year shall be excluded from the calculations under
18 this subdivision; or
19 (iii) If the taxpayer attains a cumulative investment in qualified
20 property of at least one million dollars and hires at least ten new
21 employees at the qualified location or locations before the end of the
22 ramp-up period and the number of new employees and investment are at a
23 qualified location or locations within one or more counties in Nebraska
24 that each have a population of less than one hundred thousand, and at
25 which the majority of the business activities conducted are described in
26 subdivision (1)(a) or (1)(n) of section 77-6818, the taxpayer shall be
27 entitled to a credit equal to six percent times the average wage of new
28 employees times the number of new employees. For purposes of meeting the
29 ten-employee requirement of this subdivision, the number of new employees
30 shall be multiplied by two. Wages in excess of one million dollars paid
31 to any one employee during the year shall be excluded from the
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1 calculations under this subdivision;
2 (b) If a taxpayer hires at least twenty new employees at the
3 qualified location or locations before the end of the ramp-up period, the
4 taxpayer shall be entitled to a credit equal to five percent times the
5 average wage of new employees times the number of new employees if the
6 average wage of the new employees equals at least one hundred percent of
7 the Nebraska statewide average hourly wage for the year of application.
8 The credit shall equal seven percent times the average wage of new
9 employees times the number of new employees if the average wage of the
10 new employees equals at least one hundred fifty percent of the Nebraska
11 statewide average hourly wage for the year of application. The credit
12 shall equal nine percent times the average wage of new employees times
13 the number of new employees if the average wage of the new employees
14 equals at least two hundred percent of the Nebraska statewide average
15 hourly wage for the year of application. Wages in excess of one million
16 dollars paid to any one employee during the year shall be excluded from
17 the calculations under this subdivision;
18 (c) If a taxpayer attains a cumulative investment in qualified
19 property of at least five million dollars and hires at least thirty new
20 employees at the qualified location or locations before the end of the
21 ramp-up period, the taxpayer shall be entitled to a credit equal to five
22 percent times the average wage of new employees times the number of new
23 employees if the average wage of the new employees equals at least one
24 hundred percent of the Nebraska statewide average hourly wage for the
25 year of application. The credit shall equal seven percent times the
26 average wage of new employees times the number of new employees if the
27 average wage of the new employees equals at least one hundred fifty
28 percent of the Nebraska statewide average hourly wage for the year of
29 application. The credit shall equal nine percent times the average wage
30 of new employees times the number of new employees if the average wage of
31 the new employees equals at least two hundred percent of the Nebraska
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1 statewide average hourly wage for the year of application. Wages in
2 excess of one million dollars paid to any one employee during the year
3 shall be excluded from the calculations under this subdivision;
4 (d) If a taxpayer attains a cumulative investment in qualified
5 property of at least two hundred fifty million dollars and hires at least
6 two hundred fifty new employees at the qualified location or locations
7 before the end of the ramp-up period, the taxpayer shall be entitled to a
8 credit equal to seven percent times the average wage of new employees
9 times the number of new employees if the average wage of the new
10 employees equals at least one hundred fifty percent of the Nebraska
11 statewide average hourly wage for the year of application. The credit
12 shall equal nine percent times the average wage of new employees times
13 the number of new employees if the average wage of the new employees
14 equals at least two hundred percent of the Nebraska statewide average
15 hourly wage for the year of application. Wages in excess of one million
16 dollars paid to any one employee during the year shall be excluded from
17 the calculations under this subdivision; or
18 (e) If a taxpayer attains a cumulative investment in qualified
19 property of at least two hundred fifty thousand dollars but less than one
20 million dollars and hires at least five new employees at the qualified
21 location or locations before the end of the ramp-up period and the number
22 of new employees and investment are at a qualified location within an
23 economic redevelopment area, the taxpayer shall be entitled to a credit
24 equal to six percent times the average wage of new employees times the
25 number of new employees if the average wage of the new employees equals
26 at least seventy percent of the Nebraska statewide average hourly wage
27 for the year of application. Wages in excess of one million dollars paid
28 to any one employee during the year shall be excluded from the
29 calculations under this subdivision. For purposes of this subdivision,
30 economic redevelopment area means an area in which (i) the average rate
31 of unemployment in the area during the period covered by the most recent
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1 federal decennial census or American Community Survey 5-Year Estimate is
2 at least one hundred fifty percent of the average rate of unemployment in
3 the state during the same period and (ii) the average poverty rate in the
4 area exceeds twenty percent for the total federal census tract or tracts
5 or federal census block group or block groups in the area.
6 (5) The taxpayer shall be entitled to one of the following credits
7 for new investment:
8 (a)(i) If a taxpayer attains a cumulative investment in qualified
9 property of at least one million dollars and hires at least ten new
10 employees at the qualified location or locations before the end of the
11 ramp-up period, the taxpayer shall be entitled to a credit equal to four
12 percent of the investment made in qualified property at the qualified
13 location or locations;
14 (ii) If the taxpayer attains a cumulative investment in qualified
15 property of at least one million dollars and hires at least ten new
16 employees at the qualified location or locations before the end of the
17 ramp-up period and the number of new employees and investment are at a
18 qualified location in a county in Nebraska with a population of one
19 hundred thousand or greater, and at which the majority of the business
20 activities conducted are described in subdivision (1)(a) or (1)(n) of
21 section 77-6818, the taxpayer shall be entitled to a credit equal to four
22 percent of the investment made in qualified prope