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Nameplate Capacity Tax FAQ

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. DOR recommends you do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.

Are foundations, roads, buildings, land leases, leasehold value, etc. subject to tax?

Yes. All real property continues to be assessed and taxed. Please contact your county assessor to determine how this property is assessed in your county. Actual taxes are based on the tax levy each year and cannot be predetermined.

Who pays the real property taxes if the land is being leased?

The landowner is responsible for the real property taxes. While landowners and lessees will frequently designate who is responsible for real property taxes through the terms of the lease, this would be a contractual relationship and does not change the ultimate responsibility of the landowner to ensure that the real property taxes are paid.

Is a land lease payment to the landowners considered income?

It is best to speak to your legal counsel or tax preparer to determine what impact a lease payment would have on your federal income tax.

Does the property owner where the renewable energy generation facility is located pay income taxes or any other taxes on income received from the lease?

It is best to speak to your legal counsel or tax preparer to determine what impact a lease payment would have on your federal income tax.

What is a leasehold value, who determines it, and how is it taxed?

A leasehold value is the right held by the lessee to use and occupy real estate for a stated term under the conditions specified in the lease. Determining leasehold value may not be very useful; however, market rents of adjoining ground (without the renewable energy generation facility) may still be relevant information in determining market value under an income approach. The county assessor determines the leasehold value. A leasehold value is considered real property, and will be taxed like other real property.

How much does the renewable energy generation facility pay in nameplate capacity tax, and where does the tax money go?

The nameplate capacity tax is $3,518 per megawatt. In the first year of operation, the nameplate capacity tax is prorated based on the number of days the renewable energy generation facility is in operation. 100% of the nameplate capacity tax that is remitted to the Nebraska Department of Revenue is distributed to the county treasurer. The tax is further distributed to each political subdivision (for example the schools, fire districts, or community colleges).

Is there an additional tax of any kind on the renewable energy generation facility? For instance, on my property (real property and depreciable tangible property), I pay property taxes and I pay taxes on income produced from that property.

As stated in Neb. Rev. Stat. § 77-6201(1): "The purpose of the nameplate capacity tax levied under section 77-6203 is to replace property taxes currently imposed on renewable energy infrastructure and depreciated over a short period of time in a way that causes local budgeting challenges and increases upfront costs for renewable energy developers." The nameplate capacity tax replaces the property tax. The nameplate capacity tax does not replace any other taxes that may be owed.

Does the county receive any other taxes from the real property of the renewable energy generation facility (concrete pads, foundations, operations and maintenance buildings, road construction, leasehold value, and lease payments)?

Real property associated with the renewable energy generation facility is still taxable. Directive 23-3, Assessment of Renewable Energy Generation Facilities, describes what is real property.

How is the land under a renewable energy generation facility valued?

Land under any renewable energy generation facility – wind, solar, landfill gas, or biomass – will continue to be classified and valued as if the generation facility did not exist, according to Neb. Rev. Stat. § 77-6203(4).  This means land that is currently classified as agricultural and horticultural land will continue to be classified as agricultural and horticultural land.

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