Tax credit carry-over extended

Businesses that make large capital investments in Nebraska can carry over unused tax credits for a much longer period under a bill passed April 24.

LB161, introduced by Sen. Curt Friesen of Henderson, extends the income tax credit carry-over period for companies that file a Tier 6 application under the Nebraska Advantage Act from one year to 16 years after the end of the entitlement period. The change applies to all Tier 6 project applications filed before, on or after the bill’s effective date.

The state Department of Revenue estimates that the bill would reduce state tax revenue by $1.8 million in fiscal year 2023-24 and another $1.89 million in FY2024-25.

Tier 6 is meant to encourage companies to make significant capital investments and bring high-paying jobs to the state. To qualify for Tier 6 benefits, companies must invest $10 million and create 75 new jobs or invest $109 million and create 50 new jobs.

The bill passed on a 44-2 vote.