MULTIPLE LOCATIONS Locations: Defining where your project will take place is key. The location and scope can impact both eligibility and the amount of incentives you receive. Multiple Sites: If your project spans multiple locations, specific rules determine whether they can be treated as a single project. These rules should be considered early to avoid surprises. CONTRACT WITH THE STATE Legal Agreement: Most incentive programs require a formal agreement with the state or local government. This agreement typically incorporates everything in your application— including attachments. Because of this, the application should be reviewed carefully, just like any other legal contract. CLAIMING BENEFITS Filing Claims: When claiming incentives, filings should clearly outline the legal basis for the claim. It’s also a good idea to preserve your rights by including a formal appeal or hearing request if needed. QUALIFIED PROPERTY Eligible Property: Not all property qualifies. Assets must meet specific use requirements and be located at the project site. Relevant Dates: Timing matters. Generally, property must be acquired after the application is filed and within the designated project period. Software as an Asset: Software can often qualify, but only if certain conditions are met—such as having the right type of license agreement in place. Manufacturing Exemption: Qualification for Nebraska’s manufacturing machinery and equipment exemption can potentially be impacted if the machinery or equipment is purchased through an Option 2 or 3 contractor. This should be addressed with vendors before a project is initiated. REAL PROPERTY CONSTRUCTION Contract Terms: Construction projects come with additional requirements. This can include how contractors are designated, certifications that must be obtained, and specific contract language related to taxes. These rules can also apply to build-to-suit lease arrangements. OPTIMIZING INCENTIVES Compliance: Documentation is key. Keeping detailed and organized records will make it much easier to claim and support your incentives. Equipment: Purchase and lease agreements should include clear terms around tax location (situs) and payment structure, as these can impact eligibility. STATUTORY LIMITS Prohibited Actions: Certain transactions, such as those between related parties, may limit or disqualify incentives. Understanding these restrictions ahead of time can help avoid issues. RESOLVING ISSUES Project Issues: If questions or disputes arise, specific procedures and deadlines exist for addressing them with state or local agencies. Acting quickly is important to preserve your options. BUSINESS SALE Project Transfer: If you sell the business or project, typically requirements must be met to transfer the incentives to a buyer while protecting the seller’s position. FOREIGN OWNERSHIP OR STRUCTURE Foreign Ownership or Subsidiaries: Nebraska has enacted certain restrictions on incentives for companies that are organized in, have their principal place of business in, or are owned (in whole or in part) by certain “foreign adversarial” countries. These countries include China, North Korea, Russia, Iran, Cuba, and the Maduro Regime of Venezuela. Those restrictions can also exist for subsidiaries of such companies. If your company may be impacted by these restrictions, you may potentially be able to take restructuring steps to reduce the impact of these restrictions. CONCLUSION Incentive programs can offer meaningful financial benefits, but getting the full value requires thoughtful planning and coordination from the beginning. By focusing on these key considerations early—and keeping your tax, legal, and operational teams aligned—you can put your project in the best position for success. Taking a proactive approach helps avoid surprises and ensures you make the most of the opportunities available. Nick Niemann and Matt Ottemann are partners with McGrath North Law Firm. As state and local tax and incentives attorneys, they collaborate with CPAs to help clients and companies evaluate, defend, and resolve tax matters and obtain various business expansion incentives. See www.NebraskaStateTax.com and www.NebraskaIncentives.com for more information. For a copy of their full publications, The Anatomy of Resolving State Tax Matters or the Nebraska Business Expansion Decision Guide, visit their websites or contact them at (402) 341-3070 or at nniemann@mcgrathnorth.com or mottemann@mcgrathnorth.com. 19 nescpa.org
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