Nebraska Advantage Rural Development Act Application Guide

Application Limitations

The Nebraska Advantage Rural Development Act requires an application be filed for each project. The application date for the project will determine the required level of wages and the base year used for employment and investment calculations. The application date will also determine the project’s priority for expected benefits. To file an application for the Nebraska Advantage Rural Development Act, complete the appropriate Application and provide the required information.

The application date is the last day on which information necessary to complete the application is filed. The base year from which employment and investment growth is calculated is the year prior to the application date and will change when an incomplete application is filed near the end of a tax year and is not complete until after the start of the following year.

Example

An application is filed on March 13, 2022 and is not complete. The additional information is not provided until April 4, 2022. The applicant's tax year end is March 31, 2022. The increases will be measured by comparing the current levels of employment and investment to the tax year ending March 31, 2022 levels of employment and investment rather than the tax year ending March 31, 2021 levels because the date of the complete application was April 4, 2022.

Establishing an Application Date

A Level 1 or Level 2 applicant should complete the L1L2 Application, while a Livestock Modernization applicant should complete the LM Application.

To constitute a complete application: all questions and lines on the application must be completed; all applicable worksheets must be completed; and the application fee provided. Failure to complete all applicable pages or to provide the required attachments will delay the application date. The application date will be determined by the date the last of these items is submitted, as provided in Revenue Ruling 29‑03‑1.

The certified mailing receipt stamped by the United States Postal Service (USPS) or a USPS postmark will verify the date mailed and establish the application date. The date the application is received by DOR will serve as the application date when an application is received by means other than by certified mail or does not have a USPS postmark. Any application filed after November 1 or not complete on December 1 is considered to be filed during the following calendar year.

Item 1A.

The application fee for a L1L2 Application is $500. The application fee for a Livestock Modernization Application is $100 for investment of less than $25,000, $250 for investment of at least $25,000 but less than $50,000, and $500 for investment of $50,000 or more.

The application fee should be made payable to Nebraska Department of Revenue. The application fee cannot be submitted electronically and must be mailed to:

Nebraska Department of Revenue 301 Centennial Mall South
PO Box 98944
Lincoln, NE 68509-8944

If the project’s expected benefits are not authorized because the limit has been previously authorized for other applicants, then the project is not eligible to participate and $400 of the application fee will be refunded. Refer to the Authorization Table for information on the remaining funds available.

Item 1B.

The Nebraska Advantage Rural Development Act requires participants to utilize E-Verify, the federal electronic verification program, to timely verify that new employees are legally able to work in the United States. An application will not be accepted unless the applicant is properly registered for E-Verify. See Revenue Ruling 29‑13-3.

E-Verify is a free and simple to use web-based system that electronically verifies the employment eligibility of newly hired employees. E-Verify allows participating employers to electronically compare employee information taken from the Form I-9, Employment Eligibility Verification, against the Social Security Administration’s and the Department of Homeland Security’s databases. For additional information, go to the U.S Citizenship and Immigration Services’ website at uscis.gov/e-verify and click on the E-Verify button at the left of the page.

Prior to DOR approving tax incentive benefits, and during subsequent reviews of benefits claimed, the applicant must provide proof of timely electronic verification. Examples of documents for the applicant to retain include, but are not limited to, the following:

• Case Verification Number;
• Copies of the Case Details page which includes the Case Verification Number; and
• The User Audit Report which provides general data on cases.

Benefits will not be granted unless the applicant can prove that it has electronically verified the work eligibility status of all newly hired employees employed in Nebraska. In addition, all hours worked by, and compensation paid to, any employee who is not eligible to work in the U.S. will be excluded from the calculation of any tax incentive.

Item 2.

Identify the exact name of the applicant and any other entities, including disregarded entities, to be part of the project.

A project may be defined to include a​ single entity or more than one entity within the definition of a taxpayer.

Item 3.

The narrative of the applicant’s qualifying business should include enough information to provide a reasonable person a general understanding of the business operations and identify the specific type of business activity under which the project qualifies. 

Comparison of Livestock Production and Livestock Modernization

• Livestock Production and Livestock Modernization are similar business activities, but have different project requirements
• Livestock Production involves the commercial operation of real and personal property for the producing and caring for livestock; including breeding, showing, or racing horses or for using horses in a recreational or tourism enterprise; or producing dairy products and eggs. The project must meet the Level 1 or Level 2 requirements for investment and employment growth at a location in one county meeting the population requirement. Investment may include any improvements to real property and tangible personal property that are depreciable under the Internal Revenue Code, except for vehicles, planes, or railroad rolling stock.
• Livestock Modernization is defined as constructing, improving, or acquiring depreciable buildings, facilities, or equipment for livestock housing, confinement, feeding, production, and waste management. The project must have a net investment increase of at least $10,000. There is no employment increase required. Equipment does not include breeding stock, vehicles, planes, or railroad rolling stock. Livestock Modernization does not include any improvements made to correct a violation of the Environmental Protection Act, the Integrated Solid Waste Management Act, the Livestock Waste Management Act, a rule or regulation adopted and promulgated pursuant to any of these acts, or any order of the Nebraska Department of Environment and Energy (NDEE) undertaken within five years after a complaint issued from the NDEE Director. 

Item 4A.

A project may be defined to include a single location or multiple locations. A company may have more than one project at a time as long as the projects are distinct from each other.

• Level 1 or 2 projects, including a livestock production project
  • A project must be located at a site meeting the requirements listed below. Teleworkers performing activities from their residence on tasks which are interdependent with the project may reside in any location which meets the requirements for the selected level.
  • Eligible Level 1 project locations
    
    • Any location outside of the following counties is eligible:
    • Adams, Buffalo, Cass, Dakota, Dawson, Dodge, Douglas, Gage, Hall, Lancaster, Lincoln, Madison, Otoe, Platte, Sarpy, Saunders, Scotts Bluff, Seward, and Washington.
    • A location within the boundaries of one of the listed villages is eligible, even though the village is in an otherwise ineligible county. Go to “Eligible Villages” for a list of villages in otherwise ineligible counties.
    • Eligible Census Tracts in the Omaha metropolitan area per the American Community Survey (ACS) 2019 Five-year Estimate:
      • 2, 3, 4, 5, 6, 7, 8, 11, 12, 16, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 38, 39, 40, 42, 49, 50, 51, 52, 53, 54, 58, 59.01, 59.02, 60, 61.01, 61.02, 62.02, 63.02, 73.04 in Douglas County; and 101.07, 101.08, 105.01 in Sarpy County.
      • To find the census tract for a location, go to the U.S Census Bureau website and enter the address.
• Eligible Level 2 project locations.
  
  • Any location outside of the following counties is eligible:
    
    • Adams, Buffalo, Cass, Dodge, Douglas, Hall, Lancaster, Lincoln, Madison, Platte, Sarpy, and Scotts Bluff.
    • A location within the boundaries of one of the following cities of second class is eligible, even though the city of second class is in an otherwise ineligible county:
      • Battle Creek, Bennet, Bennington, Cairo, Doniphan, Elm Creek, Gibbon, Hickman, Hooper, Humphrey, Kenesaw, Louisville, Madison, Mitchell, Morrill, North Bend, Ravenna, Scribner, Shelton, Springfield, Sutherland, Terrytown, Tilden, Valley, Waterloo, Waverly, Weeping Water, and Wood River.
• Livestock Modernization project
  
  • A livestock Modernization project may be located anywhere in Nebraska.

Item 4B.

• The explanation of how the applicant intends to achieve the expected increases must describe the type of investment, costs, and timeframe when the investment be completed. Level 1 and Level 2 applicants must also describe the employment growth.

Item 4C (Livestock Modernization) & Item 4D (Level 1 and 2).

• Level 1 and Level 2 applicants, complete and attach Worksheet I and Worksheet II, for Applications 2006 or Later to the application.
• Livestock Modernization applicants, complete and attach Worksheet LM to the application
• The application requires applicants to estimate the amount of expected investment and employment benefits. The Livestock Modernization application does not have an employment growth requirement and do not need to estimate expected employment.  The expected benefits estimated at the time of application and agreed to by the applicant and the DOR are the maximum amount of benefits that may be received. The project must attain the minimum levels of investment and employment to be eligible for any benefits. If the project does not attain at least 75% of the investment approved in the agreement, then all investment credits must be repaid. If the project does not attain at least 75% of the employment growth approved in the agreement, then all employment credits must be repaid. Please refer to the Calculation Tips when determining the expected benefits.
• The qualifying wage rate for new employees is $18.40 wages for all Level 1 or Level 2 applications with an application date in 2024.
• Level 1 or Level 2 applications can request up to the total amount of authorized $2,000,000 or the current remaining amount. Level 1 requires a minimum increase of $125,000 in net new investment and 2 full‑time equivalent (FTE) employees. Level 2 requires a minimum increase of $250,000 in net new investment and 5 full‑time equivalent (FTE) employees. The investment credit is calculated $2,750 for each $50,000 in net investment increase. The employment credit is calculated $3,000 for each new FTE earning the required wage.
• Livestock Modernization applications can request up to $500,000 or the current remaining amount.  Livestock Modernization requires a minimum increase of $10,000 in net new investment for applications submitted on or after January 1, 2024. The investment credit is calculated 10% times the net investment increase.

Item 5.

• Indicate the ID number under which the most recent Nebraska income tax return was filed. If applicant is included in an individual income tax return, list the individual’s social security number.

Additional Information

The application must be signed by an authorized person (owner, partner, corporate officer or an individual authorized by a Power of Attorney, Form 33.)

The date the application is complete will be used to determine the priority for authorizing the project's expected benefits. There is a total of $2,000,000 available for Level 1 or Level 2 applicants and $10,000,000 for Livestock Modernization applicants. Refer to the Authorization Table for information on the remaining funds available.

If more than one complete application is filed or completed on the day in which the cumulative expected benefits for the year reach the limit in available funds, the remaining funds available will be prorated among the applicants on that day who wish to proceed.

If you have any questions regarding the preparation of this application, please contact Garrett Nedved at 402-471-5862. The application should be sent to the following address:

Tax Incentives
Nebraska Department of Revenue
301 Centennial Mall South
PO Box 98944
Lincoln, NE 68509-8944

This application may also be submitted via DOR's secure file sharing system here. The application fee cannot be submitted electronically.