Wage benefit credit; calculation; use

(1) The policy of the state in adopting the Invest Nebraska Act is to encourage new businesses to relocate to and existing businesses to expand in Nebraska and to provide appropriate inducements to encourage new and existing businesses to do so. Depending on the nature of the company and its employees, the state recognizes the inducements contained in the act may be more appropriate and administratively more convenient and efficient for the state, the company, and the employees, if the wage benefit credit is charged against the company's income tax or the company's withholding tax rather than individually computed and used against each employee's income tax. Therefor, if the company uses the wage benefit credit for company training programs, employee benefit programs, educational institution training programs, or company workplace safety programs, or any combination thereof, as determined by the company as otherwise provided for in the act and if the board has approved the project application, then after entering into an agreement with the state, the company shall be allowed a wage benefit credit to be determined, used, and calculated as provided in this section.

(2) In order to help relieve the burden to government and to help promote the general welfare of citizens, the wage benefit credit used by the company shall be paid or applied by the company for company training programs, employee benefit programs, educational institution training programs, or company workplace safety programs, or any combination thereof, as determined by the company. Such use of the wage benefit credit is declared as a matter of policy to be for a public purpose. Nothing in this section shall be construed to limit the right of an employee or employees subject to a collective bargaining agreement to negotiate relative to such programs.

(3) The wage benefit credit shall be an amount equal to the percentage specified in subsection (4) of this section multiplied by the amount of the total compensation paid during each project year to employees of the company while employed at the project, other than base-year employees, who have been paid compensation for such year by the company of at least the minimum amount required for such project under section 77-5536 .

(4) The percentage used to determine the wage benefit credit shall be: If the average compensation for the project year is over But not over Then the credit percentage shall be $0 $20,000 0% $20,000 $30,000 3% $30,000 $40,000 4% $40,000 5% For purposes of determining the credit percentage for each respective project year, average compensation means the total compensation paid during the project year to all employees employed at the project regardless of their level of compensation divided by the total number of equivalent employees employed at the project during the project year regardless of their level of compensation.

(5) The wage benefit credit shall be allowed for each project year.

(6) The wage benefit credit shall be established by filing the forms required by the Tax Commissioner with the income tax return for the year. The credit may be used to reduce the company's Nebraska income tax liability.

(7) The company shall also be entitled to use all or such part as determined by the company of the wage benefit credits previously established under this section to reduce the company's income tax withholding employer or payor tax liability under section 77-2756 or 77-2757 for succeeding years to the extent such liability is attributable to employees who are employed at the project covered by the agreement other than base-year employees. To the extent of the credit so claimed, such withholding shall not constitute public funds or state tax revenue and shall not constitute a trust fund or be owned by the state. In order to help achieve the public purposes of the Invest Nebraska Act, the use by the company of the wage benefit credits to reduce such income tax withholding tax liability shall not change the amount that otherwise would be reported by the company to the employee under section 77-2754 as income tax withheld and shall not reduce the amount that otherwise would be allowed by the state as a refundable credit on an employee's income tax return as income tax withheld under section 77-2755 .

(8) The use of the wage benefit credit total as a credit against income tax withholding tax liability for the project per year shall not exceed five percent of the total compensation paid by the company in the year to all employees, other than base-year employees, for services rendered in connection with the project. If such use of the wage benefit credit exceeds such amount, the excess shall be returned to the Department of Revenue in the manner provided in section 77-2756 .

(9) The credits shall be applied in the order in which they were first allowed. Any decision on how part of the credit is applied shall not limit how the remaining credit can be applied under this section. The credit may be carried over until fully utilized, except that the credit may not be carried over more than eight years after the end of the entitlement period. If a credit is subsequently recaptured under section 77-5538 , the credit shall be treated as if it had never been allowed.

(10) The wage benefit credit shall not be transferable, except that any credit to be taken against the income tax liability of the company and allowable to a partnership, a limited liability company, a subchapter S corporation, a cooperative, a joint venture, or an estate or trust may be distributed to the partners, members, shareholders, patrons, owners, or beneficiaries in the same manner as income is distributed for use against their income tax liabilities.