Proposed Improvements to and Extension of the Nebraska Historic Tax Credit Program
In 2013, Baird Holm introduced the Nebraska Job Creation and Mainstreet Revitalization Act (the “Act “), which the Nebraska Legislature enacted in 2014. The Act provides $15 million in tax credits for revitalization and rehabilitation of historically significant real property.
During the current legislative session, the Legislature is considering amendments to the Act and an extension of the program for an additional three years.
LB 774 clarifies that the use of historic tax credits against the premium tax is a payment of tax for purposes of Nebraska Revised Statutes Section 77-2734.03(1), and that the use of historic tax credits does not result in any additional retaliatory tax for purposes of Nebraska Revised Statutes Section 44-150. These clarifications address concerns raised by the Nebraska Department of Revenue that the use of historic tax credits against a taxpayer’s premium tax liability did not constitute the payment of taxes for purposes of the corporate income tax offset allowed under Section 77-2734.03(1). The Department of Revenue’s interpretation lessens the value of historic tax credits.
LB 774 also reserves $4 million of the $15 million annual appropriation under the Act for historic projects seeking an allocation of credits of less than $100,000. If any of the $4 million in credits reserved for smaller projects remains unallocated as of April 1 of each year, those funds become available for use for any other qualifying project.
LB 774 is currently on Final Reading, the last round of floor debate.
The Legislature is also considering legislation to extend the sunset date for the Act. LB 1022 extends the sunset of the Act from 2019, to 2022, and allows the use of historic tax credits on any tax return filed before December 31, 2027, instead of December 31, 2024.
LB 1022 is also on Final Reading.
You can find copies of these bills and more information on the Nebraska Legislature’s website at http://www.nebraskalegislature.gov/bills/.
Please do not hesitate to contact us if you have questions about these bills or any others. Thank you.