Tax credit changes would benefit small livestock producers

The Revenue Committee heard testimony March 16 on a bill intended to help small livestock producers qualify for an existing incentive program.

Currently, livestock producers that invest at least $50,000 in a modernization or expansion project are eligible for a refundable state income tax credit equal to 10 percent of their investment under the Nebraska Advantage Rural Development Act.

LB118, introduced by Sen. Tom Brandt of Plymouth, would decrease the minimum required investment to $10,000 for applications filed on or after Jan. 1, 2024.

It also would set an application fee of $100 for an investment of less than $25,000 and $250 for an investment of more than $25,000 but less than $50,000. The current fee of $500 would apply to larger projects.

Brandt said the changes are intended to make the program more accessible to small and beginning livestock producers. Many meaningful upgrades to a livestock operation would not reach the current $50,000 threshold, he said, but they are “no less worthy of tax credits” than more expensive projects.

The state Department of Revenue estimates that LB118 would reduce state general fund revenue by $2 million in fiscal year 2024-25 and $3 million in FY2025-26.

Al Juhnke testified in support of the bill on behalf of the Nebraska Pork Producers Association and seven other organizations representing Nebraska’s agriculture and ethanol industries. He said LB118 would make the livestock modernization program “size neutral,” ensuring that both large and small producers could benefit.

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