STATE TAX BRIEFING THE GOOD LIFE TRANSFORMATIONAL PROJECTS ACT NEBRASKA’S NEW INCENTIVE DRIVING ECONOMIC DEVELOPMENT IN THE STATE BY NICK NIEMANN & MATT OTTEMANN, MCGRATH NORTH LAW FIRM COMPANIES HAVE A LIMITED LIFE. THEY are created, they prevail for some period of time, and then they decline and fail. Sometimes this is over a very short timeframe. Sometimes it is over an extended timeframe. Some merge with another. Some find new life in a new or revised business model. Many factors drive this. A state’s policy towards business climate is critical to providing the environment to nourish or replenish the limited life of companies. The state’s business climate is key to being in a position to reload when companies fail (and jobs and opportunities are lost). A state’s incentive programs are one of the 22 main business climate features that create the opportunity to be a great place for companies to locate and grow. Most states know this and have created a variety of incentive programs to spur growth and attract and retain cuttingedge businesses. The Council for Community and Economic Research has identified 2,412 state business incentives programs enacted by states throughout the United States. Of these 2,412 programs, 37 are located in Nebraska. To be successful, every state needs to design its business climate to not just attract jobs. Today, more than in the past, states are designing their overall entertainment, retail, and quality of life climate to help address the workforce shortages that are occurring around the country. In 2023, the Nebraska Legislature took a next step in this direction with the passage of the Good Life Transformational Projects Act (the Act). This Act is intended to provide support for unique Nebraska projects that will attract new industries and employment opportunities and further grow and strengthen Nebraska’s retail, entertainment, and tourism industries, as well as help to develop new, great places to work and live. The Act will do this by encouraging transformational development projects within the state that create and grow companies, destinations, infrastructure, and other attractions to help keep Nebraska residents here and attract others to come. We are beginning to see a few significant projects throughout the state begin to take shape using the new incentive. For example, public reports highlight a $500 million development project being discussed in Grand Island that would feature more than 2,000 housing units and a tournament-style sports complex. The city of Bellevue has publicly stated that it intends to use the Act to build a 100,000-square-foot indoor water park as part of an entertainment district. In addition, a developer has applied for a project under the Act near Gretna to build a project with estimated building costs of $3.2 billion that would also create nearly 30,000 jobs. Given this activity, and the importance of the Act, we wanted to summarize the Act’s key features and how a developer can utilize the Act’s incentives to support the development of a project under the Act. Basics of the Act If a project is approved, the state will reduce the state’s sales and use tax rate at the project location from 5.5% to 2.75% for transactions occurring within the Project District for a 25-year period. 16 Nebraska CPA
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