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Nebraska Direct Financial Incentives

Nebraska's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment.

Q1 2014
The four-part Talent & Innovation Initiative (TI2) was developed to enhance momentum in Nebraska’s fastest growing industries and others positioned to integrate new technologies:

Nebraska Internship Program. The Intern Nebraska (InternNE) program connects college students and employers from across the state, providing a unique opportunity for them to co-invest in the future. The InternNE Grant Program provides financial assistance to companies in Nebraska who are creating new internships. The Program was established in 2011 and will undergo significant changes this fall through the passage of LB476. Starting October 1, 2013 the Program may provide grants up to 50 percent of the cost of the internship for eligible projects, up to $5,000. Businesses that hire students receiving Pell Grants will be eligible to receive up to 75 percent and up to $7,500 per internship. Businesses may be awarded up to 5 interns per location and up to 10 company-wide per year. Applications will be reviewed on a competitive bi-monthly cycle; review will begin the first day of all odd-numbered months. Businesses must apply to the InternNE Grant Program prior to hiring interns. For businesses with 100 or more employees each position must be newly created (cannot have existed during prior year). All internships must pay at least minimum wage and be of sufficient duration to allow students to gain valuable work experience. Internships cannot constitute more than 50 percent of the company’s Nebraska workforce or be for the purpose of meeting required residency or clinical hours for the intern.

Business Innovation Act is intended to help businesses develop new technologies to enhance quality job opportunities in the state. The program provides capital to Nebraska’s start-ups and technology-related businesses through competitive grants, equity financing, and debt financing. The capital can be used for market potential research at Nebraska post-secondary educational institutions, new product development and testing, prototype development, and commercialization. Various matching requirements apply depending on the program under the Act.

Site & Building Development Fund is intended to help increase industrial and commercial sites available and ready for business development. Communities will provide matching funds toward projects that can involve demolition, new construction, and rehabilitation. State funding will be focused on land and infrastructure costs with 40 percent of funding available to non-metro areas.

Angel Investment Tax Credit encourages investment in high-tech and other startup enterprises in Nebraska by providing refundable state income tax credits to qualified investors investing in qualified early-stage companies. Capped at $3 million annually, the program requires a minimum investment of $25,000 for individuals and $50,000 for investment funds. Eligible small businesses must have fewer than 25 employees, with the majority based in the state. The application cycle begins each January 1 and applications are accepted on a continuous basis throughout the year. Applications for the next calendar year are accepted starting December 1 of the prior year.

The Nebraska Progress Loan Fund (NPLF) makes loans to qualifying small businesses, generally existing and start-up businesses experiencing financing challenges. The minimum loan to any business is $50,000, with a maximum of $2 million. The NPLF also can apply for interim loans to qualifying small businesses for a term not to exceed three years. An interim loan maximum is $5 million with longer terms negotiated on a case-by-case basis. Funding must be matched 1 to 1 by private sources.

The Nebraska Angel Sidecar Fund encourages greater private investment in Nebraska-based start-up companies thereby increasing the overall investment impact. Invest Nebraska Corporation will award seed capital funds that match private angel fund investments. Seed capital may be used by the start-up company for advanced intellectual property development and evaluation, advanced proof of concept work for scientific discovery, advanced prototype design and development, key personnel hires, and related activities.

The Nebraska Advantage Act contains six tiers of benefits:
  • Tier 1: Nebraska Small Business Advantage—Businesses that invest $1 million and create 10 new jobs are eligible for a refund of half of the sales tax paid for qualified property purchases at the project, the full sliding scale wage credit of 3 percent to 6 percent depending on wage level, and a 3 percent investment tax credit. This tier is available to manufacturers, research and development or testing businesses, and listed technology related services where at least 75 percent of the sales and licensing are to out-of-state customers or to the federal government.
  • Tier 2: Businesses that invest $3 million and create 30 new jobs qualify for sales tax refunds for capital purchases at the project, the sliding scale wage credit, and a 10 percent investment credit.
  • Tier 2 Data Center: $200 million investment and creation of 30 new jobs at data center are eligible for sales tax refunds for capital purchases at the project, the sliding scale wage credit, 10 percent investment credits, and a 10-year exemption on all personal property.
  • Tier 3: Jobs-only tier—Businesses that create 30 new jobs can receive the sliding scale wage credit. No capital investment is required to qualify.

    Tier 4: Businesses that invest $12 million and create 100 new jobs receive a personal property tax exemption for turbine-powered aircraft, mainframe computers, agricultural product processing machinery, and personal property used in a distribution facility for up to 10 years. This is in addition to qualifying for the sales tax refund, jobs credit, and the investment credit.
  • Tier 5: Investment-only tier. This requires $37 million in new investment. Companies receive a refund of sales taxes paid on eligible property with the project.
  • Tier 6, Nebraska Super Advantage: Specifically rewards all non-retail companies that create higher-paying jobs. To qualify, the new jobs must pay at least 150 percent of the state average wage, or 200 percent of the county average, whichever is greater. Companies that create 75 new jobs and make a $10-million capital investment—or 50 new jobs and a $109-million investment—can receive a sales and use tax refund on capital purchases; a 10 percent wage credit on new employee compensation; a 15 percent investment tax credit; and a 10-year exemption on all personal property.

R&D Credit: Offers a refundable tax credit for qualified research and development activities undertaken by a business entity for 21 years. The credit is equal to 15 percent of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for R&D. The credit is increased to 35 percent of the federal credit allowed under Section 41 of the Internal Revenue Code of 1986 for expenditures on the campus of a college or university in Nebraska or a facility owned by a college or university in Nebraska.

Renewable Energy Credit: Businesses that produce electricity for sale by using renewable energy resources may qualify for Nebraska Advantage incentive benefits. A project may qualify under Tier 5 with a minimum investment in qualified property of $20 million and maintain employment at the renewable energy project. A renewable energy project may also be including in any other tier, except Tier 1, by meeting applicable investment and employment thresholds.

Nebraska Customized Job Training Advantage provides a flexible and discretionary job training program for projects that offer an opportunity for economic development in Nebraska. Use of the funds is limited to eligible companies and eligible training projects.

Community Development Block Grant(CDBG) Program: Loans designed to create quality jobs and promote new investment. CDBG funds must be used to benefit low-to-moderate income persons, aid in the prevention or elimination of slums or blight, or meet other community development emergency needs. CDBG funds can be used to purchase machinery, equipment and inventory, meet working capital needs, develop community infrastructure, construct or renovate existing buildings and real estate.

Nebraska Micro Enterprise Partnership Fund: Provides a 20 percent refundable tax credit to micro businesses on increased compensation for employees or increased investment in targeted communities. Microenterprise applicants, companies with five or fewer employees at the time the application is filed, including start-ups, may qualify for a maximum of $10,000 throughout the life of the program. Credits are earned on increased expenditures for wages, buildings, certain expenses, and non-vehicle depreciable personal property.

Rural Enterprise Assistance Project(REAP) Loan Programs: Focus on providing loan capital to rural Nebraska based microenterprises and existing businesses. Its loan products are coupled with business technical assistance and counseling to clients to help them prosper in their business.

Tax Increment Financing (TIF): Primarily designed to finance the public costs associated with a private development project. Essentially, the property tax increases resulting from a development are targeted to repay the public investment required by a project.

Industrial development bonds: The Nebraska Investment Finance Authority encourages economic and industrial development through the investment of private capital in the state. Eligible projects include land, buildings, and all real or personal property. Maximum maturity of bonds is 30 years. Counties, cities, and villages issue industrial development bonds limited to industrial facilities. The maximum issue period is 30 years.

Work Force Development Program: The state's Work Force Development Program links the financial and technical resources of the Nebraska Department of Economic Development, the Department of Labor, and the 14 technical community college campuses throughout the state to provide custom-designed recruitment and training assistance. Businesses may receive assistance in the form of pre-employment training, on-the-job training, and specific tax credits.

Venture capital: The Heartland Capital Fund, a limited partnership, invests in and supports new and emerging growth businesses. The companies that the fund invests in must have unique products, processes or market positions supporting growth that would allow a public offering within three to seven years.

Finance services: Nebraska Development Finance Service staff members work with companies in assembling government economic development finance programs with conventional financing for optimal comprehensive packages.

Other financing: The Local Option Municipal Economic Development Act authorizes incorporated cities and villages to appropriate and spend local sales and property tax revenues for certain economic development purposes. Such activities include supporting the startup, location, retention or expansion of qualifying businesses.

Nebraska State Contact:
Nebraska Department of Economic Development
P.O. Box 94666
Lincoln, NE 68509
(402) 471-3111 or (800) 426-6505

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.

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