Employment & Investment Growth Act Self-Review Guidelines

Prior to our qualification audit please review the items below to ensure that they have been handled properly. These items are the most common audit adjustments made during the Department of Revenue qualification audits over the last several years. If you perform a self-audit and make corrections for the following items, then the qualification audit will be completed more quickly and the qualified company will be able to receive benefits sooner.



Topic Proper Treatment
Assets placed in service prior to application date Exclude from investment. (Note: This is not based on date capitalized, but date physically placed in service)
Sales tax paid on tangible personal property Exclude from investment
Sales tax paid on real property Exclude the refundable sales and use tax from investment. The refund is calculated as follows:
{Contract price X .50/(1 + tax rate)} X tax rate
Lease of qualified property Include in investment (see below for valuation method).
Capital lease Include based on cost of asset instead of using lease payments
Operating lease Include in year the lease starts. Valued at the average net annual rent multiplied by the number of years of the lease for which the taxpayer was originally bound, not to exceed 10 years or the end of the third year after the entitlement period, whichever is earlier.

3M + 30 type project: Exclude retirements of property placed in service since date of application in determining whether the project reached or maintained the required levels.

20M type project: Exclude all retired property when determining the net gain.

Full-time Equivalent Employee Calculation

Topic Proper Treatment
Overtime Include based on actual number of hours worked, not based on the time and one-half used for payment.
Transfers of employees If the project is not defined as statewide, then if an individual who was employed by the taxpayer in the base year moves into the project at a later date they will need to be added to the base year.
Hours worked

Include all hours for full-time, part-time, overtime, holiday, vacation, sick leave, etc. Include the exempt employees based on the regular work week for the company.

Exclude hours recorded due to termination or severance. Exclude hours worked at a location outside the definition of the project.

Compensation Credit Calculation

Topic Proper Treatment
Wages Use Nebraska taxable wages. Do not use gross wages.
Nonresidents Deduct taxable wages paid to nonresident employees hired after the base year (Worksheet B-2, line 5, Form 775N).
Back to Top