Foreign Adversarial Company FAQs

A parent company is a company that directly or indirectly holds more than 50 percent control of the subsidiary. 

Direct control is holding more than 50% control of the subsidiary by direct ownership.

Indirect control is when an ultimate parent holds more than 50% control of other subsidiaries that in turn hold more than 50% control of an underlying subsidiary. An ultimate parent is the topmost company within the hierarchy of the entire organization.  
 

No, if a member of the unitary group is a foreign adversarial company incentive benefits cannot be claimed or earned on the return.

The foreign adversarial company can be categorized as a direct or indirect foreign adversarial company. A direct foreign adversarial company is a company under § 77-3,114(1)(c)(i-iii) because it is organized under the laws of a foreign adversary, has its principal place of business within a foreign adversary, or is owned in whole or in part, operated, or controlled by the government of a foreign adversary.

Where a company is organized under the laws of a foreign adversary or its principal place of business is within a foreign adversary only that company is a direct foreign adversary under Neb. Rev. Stat. § 77-3,114(1)(c)(i) or (ii), so long as it is not owned in whole or in part, operated, or controlled by the government of a foreign adversary.   However, in cases where the parent company is owned in whole or in part, operated, or controlled by the government of a foreign adversary, the entire group would be a direct foreign adversarial company and the entire group would be disqualified from receiving benefits because the entire group would be owned in whole or in part, operated, or controlled by the government of a foreign adversary. Neb. Rev. Stat. § 77-3,114(1)(c)(iii).

An indirect foreign adversarial company is a company under § 77-3,114(1)(c)(iv) because it is a subsidiary or parent of any company described under § 77-3,114(1)(c)(i ) or (ii).  In either case, both the direct and indirect company would be a foreign adversarial company prohibited from receiving any benefits under an incentive program of the State of Nebraska.

If income flows from the pass-through entity (Limited Liability Company, Partnership, or S-Corporation) to a parent that is a direct or indirect foreign adversary company that pass-through entity is also considered a foreign adversary company for tax incentive benefit purposes. This does not apply to C corporations, nor does it apply to an LLC that elects to be taxed as a C corporation.

No, incentive benefits cannot be earned by or paid out to a foreign adversarial company after October 1, 2025 even if the claim was filed before that date.