Urban redevelopment tax incentives created

Businesses that invest in urban areas with high poverty and unemployment rates may qualify for tax incentives under a bill approved by the Legislature May 20.

Under LB544, introduced by Omaha Sen. Justin Wayne, taxpayers may apply to the director of the state Department of Economic Development for tax credits based on their level of investment and the number of new employees they hire.

To qualify, a business must be located in a city of the primary or metropolitan class and in an economic redevelopment area in which the average rate of unemployment is at least 150 percent of the state average and the average poverty rate is 20 percent or more for the area’s federal census tract.

Taxpayers may use the credits to offset income, sales and use or real property taxes or to reduce income tax withholding. No taxpayer may earn a credit that exceeds $50,000.

The director may not approve further applications once the expected incentives from approved projects total $8 million, and no new applications may be filed after Dec. 31, 2031.

Beginning Sept. 1, 2024, the department must present an annual report on the program to the Legislature.

Senators voted 49-0 to pass LB544.