Rural development tax credit increased
Additional tax incentives are available for certain livestock modernization or expansion projects and other qualifying rural Nebraska businesses under a bill passed by lawmakers April 13.
LB1261, introduced by Sen. Dave Murman of Glenvil, increases the amount of tax credits available each year under the Nebraska Advantage Rural Development Act from $1 million to $10 million beginning in 2022.
The bill also extends the deadline for applications under the act from Dec. 31, 2022, to Dec. 31, 2027, and increases the maximum credit amount available for certain livestock modernization or expansion projects from $150,000 per application to $500,000.
LB1261 includes provisions of LB596, introduced by Thurston Sen. Joni Albrecht, under which retailers who sell and dispense ethanol blended gasoline formulated with a percentage of at least 15 percent by volume of ethanol are eligible for a refundable state income tax credit.
The credit equals 5 cents per gallon of E-15 sold during the prior calendar year and 8 cents per gallon of E-25 or higher blend.
Total credits are limited to $2 million in 2022. The annual limit for following years may increase if the annual amount of tax credits approved in the prior calendar year exceeded 90 percent of that year’s annual limit. The annual limit may not exceed $4 million.
No new applications may be filed under the program after Dec. 31, 2026.
The Legislative Fiscal Office estimates that LB1261 will reduce state general fund revenue by $2 million in fiscal year 2022-23, $7.4 million in FY2023-24 and $10.8 million in FY2024-25.
The bill passed on a vote of 46-0 and took effect immediately.