Changes to Nebraska Advantage Act adopted

Lawmakers passed a bill May 30 that revises current definitions under the Nebraska Advantage Act.

Currently, the definition of taxpayer under the act includes any person who is subject to sales and use taxes and withholding. It also includes specific entities, including corporations and partnerships, that are subject to the same taxes. LB34, introduced by Kearney Sen. Galen Hadley, eliminates the specific references and substitute the word entity in its place.

The bill also allows flow-through entities and cooperatives to qualify as taxpayers even though all or some portion of the partners or members are political subdivisions or exempt entities.

LB34 makes several other changes, some of which include:
• changing calendar year to year for purposes of calculating the county and Nebraska average weekly wage;
• amending the definition of equivalent employees to clarify that salaried employees are deemed to have worked 40 hours per week for purposes of calculating the number of equivalent employees;
• creating the definition of political subdivision for purposes of the act and including in the definition a group of political subdivisions that form a joint public agency or are organized through an interlocal agreement or other method of joint action;
• changing the definition of year from taxable year of the taxpayer to calendar year;
• creating a presumption of interdependency when the taxpayer’s application or plan includes every location in the state that is involved in a qualified business activity; and
• changing the provisions for establishing and using credits.

The bill also creates a new provision directing the state tax commissioner to disclose information to an acquiring taxpayer about the project they are purchasing in order to determine future benefits and liabilities.

LB34 requires the tax commissioner to act within 180 days of application. It also clarifies the method by which the timeline will be determined to have started and allows the tax commissioner and taxpayer to agree on the extension of the timeline.

The bill passed on a 46-0 vote.

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