Extension proposed for research and development tax credit

Businesses taking advantage of a research and development tax credit would have more time to claim the credit under a bill advanced from general file March 5.

Four years currently are allotted to complete all research and development associated with an eligible project. LB983, as originally introduced by Bellevue Sen. Abbie Cornett, would have removed the time requirement completely.

A Revenue Committee amendment, adopted 28-0, replaced the provision in the original bill to repeal the time requirement and instead placed a 20-year limitation for all research and development to be completed. Cornett said the extension is important to accommodate the technological development process.

“Lengthening the tax credit recognizes and affirms Nebraska’s commitment to supporting research and development projects that may take longer than five years to develop,” Cornett said.

Cornett said she proposed the 20-year limitation to mirror federal statutes regarding research and development tax credits.

Omaha Sen. Heath Mello spoke in support of the bill, saying it ultimately will lead to increased job growth throughout the state.

“The more emphasis we put on tax credits and incentives to encourage partnerships with universities, [the more] we see an increase in research and development projects and new jobs,” he said.

Kearney Sen. Galen Hadley also spoke in support of the bill. He said the potential income from new technological innovations will help the state’s budget.

“We have core services that must be funded,” Hadley said. “We can either raise taxes or grow the economic base by encouraging this kind of development.”

Senators advanced the bill to select file on a 30-0 vote.