Legislative Performance Audit

ImagiNE Act reporting requirements, other provisions updated

Lawmakers approved a measure April 13 that modifies Nebraska’s main business tax incentive program.

LB1150, introduced by the Legislative Performance Audit Committee, contains several proposals related to the ImagiNE Nebraska Act, passed in 2020, and other state tax incentive programs.

Under the bill’s provisions, ImagiNE Nebraska Act applications must include the most recent taxable valuations and levy rates for all qualified locations. They also must include a program schedule for job training activities and the city and state where recruited employees lived if tax credits are used for those purposes.

The provisions of LB817, introduced by Sen. Lou Ann Linehan of Elkhorn, make several technical changes requested by the state Department of Revenue.

Under that proposal, the department must submit tax incentive program reports on a fiscal year, accrual basis that satisfies the requirements of the Governmental Accounting Standards Board.

Among other changes, the measure also allows the department to obtain employees’ Social Security numbers to confirm the number of new employees at a qualified location.

The provisions of LB502, introduced by Norfolk Sen. Michael Flood, allow certain businesses receiving tax incentives under the Nebraska Advantage Act to use a direct pay permit, as is allowed under the ImagiNE Nebraska Act. The measure applies only to certain data center projects.

The provisions of LB985, sponsored by Sen. Mark Kolterman of Seward, change the definition of base year — which is used to measure employment growth for tax incentive purposes — under the ImagiNE Nebraska Act.

Under that measure, if an applicant increased the number of equivalent employees at a qualified location in 2020 or 2021 in response to the COVID-19 pandemic, the base year will be 2019. The provision applies to applications made in 2021 or 2022.

The provisions of Flood’s LB1094 also update the ImagiNE Nebraska Act. Under that proposal, the time worked by employees in their Nebraska residence is considered spent at a qualified location if the employee works at both locations.

Also included in LB1150 are the provisions of LB457, introduced by Sen. John McCollister of Omaha.

They require the department to notify each metropolitan and primary class city of the total amount of local option sales tax refunds that are estimated to be paid to taxpayers during the following calendar year under certain tax incentive programs.

LB1150 passed on a vote of 44-1 and took effect immediately.

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