Nebraska Advantage Rural Development Act – Livestock Modernization FAQs
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.
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The Livestock Modernization tax credit program provides a 10% refundable tax credit to applicants engaged in livestock production and modernize or expand livestock facilities in Nebraska.
No, a Livestock Modernization applicant may earn a refundable tax credit. Tentative tax credits are reserved on an application based on estimated new net investment.
The credit is calculated on the increase in net new investment made during the application year or subsequent year compared to the base year.
Investment in buildings, facilities, or equipment for livestock housing, confinement, feeding, production, and waste management count towards the calculation of the credit. Improvements to correct a waste management violation do not qualify.
The minimum level of investment is $10,000.
Yes, each application is limited to $500,000 in credits.
The investment must be met in two tax years beginning with the tax year of application.
The application is submitted in the year you plan to make the investment. The application estimates growth in the current year and following year. The application deadline is the earlier of November 1 or the date all credits available have been allocated for the year.
The application is considered to be filed during the next calendar year.
$10 million is available each year.
Please visit the authorization table webpage for the current amount available.
The chicken facility can count as new investment if it is placed-in-serviced during the application year or following year. The full value of the building is counted as investment even if construction was started prior to application.
Yes, applicants with employees must be registered with E-Verify in order for the application to be approved.
The applicant is the operations entity. The entity actively engaged in the livestock operations is the applicant.
Leases between related parties do not count as investment. The original cost paid by the real estate entity can count as investment if the asset was placed-in-service during the application year or following year.
Yes, an applicant must meet 75% of the expected investment to earn any credits.
The credit amount is limited to the amount listed in the agreement.
Livestock production means the active use, management, and operation of real and personal property for the commercial production of livestock, for the commercial breeding, training, showing, or racing of horses or for the use of horses in a recreational or tourism enterprise, and for the commercial production of dairy and eggs.
Cattle, horses, sheep, goats, hogs, dairy animals, chickens, turkeys, and other species of game birds and animals raised and produced subject to permit and regulation by the Game and Parks Commission, or the Department of Agriculture qualify.
The new net investment is $18,000 ($30,000 addition minus the $12,000 retirement).
No, equipment used to grow or harvest row crops does not qualify.
No, breeding stock does not qualify as investment.
No, licensable motor vehicles do not count as investment.
The investment in the year the lease begins will be $1,000,000 ($100,000 for ten years). All leases are limited to ten years.
Yes used equipment qualifies, but an acquisition of an existing business does not.
Any location in Nebraska is eligible.
Yes, multiple applications can be submitted for different locations. Another application for the same project location can be submitted after the two-year attainment period has ended. Please contact DOR for additional information about having multiple projects at the same location during the same attainment period.
The credit is claimed after the investment has been made, the property is available for use, and DOR has reviewed the investment documents. The credit is claimed on the income tax return for the year the minimum required investment is met.
Yes, the credit is a refundable at the applicant level. If the credit is distributed, the credit becomes nonrefundable and cannot be carried forward.
