Business Incentives & Financing
The Nebraska Advantage
In May 2005, Nebraska signed into law a new generation of benefits designed to enhance Nebraska's competitive edge by expanding business and attracting new opportunities to the state. The Nebraska Advantage Package was designed to create a business climate that makes Nebraska the preferred location for starting and growing businesses. There are various tiers under this act that provide incentives based upon thresholds in respect to employment and investment. These programs include refund of sales taxes paid, slide scale job credits and investment credits. Other incentives include sales tax exemptions on manufacturing equipment, manufacturing or processing raw materials, no inventory tax and 100% depreciation for personal property tax.
LB312 (effective January 1, 2006)
- Nebraska Advantage - Rewards businesses that invest in the state and hire Nebraskans. In this progressive, pro-business tax climate, corporate income and sales taxes are reduced or virtually eliminated.
- Nebraska Research & Development Advantage - Allows qualifying research and development companies to claim a tax credit equal to 15 percent of the federal tax credit for increased expenses related to research & development.
- Nebraska Micro-Enterprise Tax Credit Program - Offers a 20% refundable tax credit to companies with five or fewer employees, including start-ups. A company must provide increased compensation to employees or increased investment in targeted communities.
- Nebraska Rural Development Advantage - Amends the Employment, Expansion and Investment Incentive Act (formerly LB608 passed in 2003) to provide qualified businesses with refundable tax incentive for projects creating two new jobs and investing $125,000 in counties with less than 15,000 residents, or businesses creating 5 jobs with $250,000 investment, if located in a county with less than 25,000 people.
Nebraska Super Advantage (2008)
LB 895 makes innovative changes to the Nebraska Advantage Act. In order to attract companies to Nebraska that will pay high wages and invest heavily in our state, the Governor introduced the Nebraska Super Advantage.
Super Tier 6 -- $10 million in investment and 75 new jobs OR $100 million in investment and 50 new jobs – Any business activity other than retail businesses qualify. Refund of all sales tax on project capital purchases, a 10% job credit on new employee compensation when the new position is the greater of 200% of the county average wage or 150% of the Nebraska average wage, 15% investment credit and personal property tax exemption for all personal property at the project for up to 10 years.
Customized Job Training (effective July 1, 2005)
The purpose of the Nebraska Customized Training Grant Program is to provide employee training assistance to businesses that maintain, expand and diversify the state's economic base and, in the process, retain and create quality jobs for Nebraska residents. These funds are administered by the Nebraska Department of Economic Development (DED). Program priorities are as follows:
- Customized training projects that result in increased investment and employment and where the training assistance is a significant incentive for the project to be undertaken in Nebraska rather than in another state;
- Non-incentive customized training projects where there is increased investment and employment but no incentive is involved; and,
- Customized training projects that involve retraining of existing workers to upgrade their skills as a result of investment in new capital.
LB90 (effective January 1, 2006)
- LB 90 - The second bill making up the Nebraska Advantage, addressing rural development and emphasizing the contributions made by Nebraska's entrepreneurs, as well as agricultural and value-added industries, including alternative fuels such as ethanol.
- Nebraska Value Added Agricultural Advantage - Reauthorizes a value-added grant program providing grants up to $75,000 to cooperatives, groups or associations to help offset the costs of research, education, training and market development of value-added products sold by producers.
- Building Entrepreneurial Communities Act - Provides grants up to $75,000 to rural communities to implement collaborative projects addressing issues related to chronic economic distress, unemployment, below-average per capita income, and severe population loss.
Local and Regional Loan Programs
The Northeast Nebraska Economic Development District (NENEDD) and Northeast Economic Development Inc. (NED, Inc.) provides gap financing for businesses in 22 counties in northeast and north central Nebraska in conjunction with local banks. Loans typically range from $5,000 to $100,000 with terms not to exceed 15 years. Loans are earmarked for financing fixed assets such as land, building, equipment and working capital.
Many communities maintain a Revolving Loan Fund (RLF) for smaller projects in their community. Projects will vary and may include retail projects in most of our communities. Assistance varies but generally is used for building, equipment and working capital. Loans can vary from $5,000 to $300,000 if the community has adequate funds available.
Local Incentive Programs
The Cities of Albion, Columbus and St. Edward have imposed a local sales tax to support economic development projects. These are local funds typically set aside to assist with land, building and start-up expenses for new and growing companies. Each community has adopted criteria for eligibility of funding assistance. For assistance on local economic development funding programs please contact David Bell at 402-564-3171 ext. 257.