Employee relocation incentives proposed

Nebraska businesses would receive a tax benefit for paying employees’ relocation expenses under a bill heard Feb. 2 by the Revenue Committee.

Sen. Beau Ballard of Lincoln, who sponsored LB1400 on behalf of Gov. Jim Pillen, said the bill is intended to help companies recruit and retain talented workers from other states.

Under the bill, an employer that pays relocation expenses for a qualifying employee could apply to the state Department of Revenue for a refundable state income tax credit of up to $5,000 per employee. The department could not grant a credit unless the employee is paid an annual salary of between $70,000 and $250,000.

In addition to the employer credit, the employee would be eligible to make a one-time election to exclude their Nebraska-sourced income from state income tax.

The department could recapture the credit amount, and any reduction in tax as a result of the exclusion, if the employee does not maintain residency in Nebraska for two years.

Robert Bell testified in support of LB1400 on behalf of the Nebraska Insurance Federation. Nebraska’s insurance industry expects to add 2,000 jobs over the next decade, he said, but finding qualified candidates is a top concern.

Bell suggested amending the bill so that insurance companies, which pay premium and retaliatory taxes but not state income tax, also would benefit.

Also in support was Jason Ball, who testified on behalf of the Lincoln Chamber of Commerce, Nebraska Chamber of Commerce and Industry and Greater Omaha Chamber. He said providing resources to businesses to help them relocate workers is “essential” at a time when the state has an estimated 80,000 open jobs.

No one testified in opposition to LB1400 and the committee took no immediate action on it.