77-4103 Terms, defined.
77-4103. Terms, defined.For purposes of the Employment and Investment Growth Act, unless the context otherwise requires:(1) Any term shall have the same meaning as used in Chapter 77, article 27;(2) Base year shall mean the year immediately preceding the year during which the application was submitted;(3) Base-year employee shall mean any individual who was employed in Nebraska and subject to the Nebraska income tax on compensation received from the taxpayer or its predecessors during the base year and who is employed at the project;(4) Compensation shall mean the wages and other payments subject to withholding for federal income tax purposes;(5) Entitlement period shall mean the year during which the required increases in employment and investment were met or exceeded, and the next six years;(6) Equivalent employees shall mean the number of employees computed by dividing the total hours paid in a year by the product of forty times the number of weeks in a year;(7) Investment shall mean the value of qualified property incorporated into or used at the project. For qualified property owned by the taxpayer, the value shall be the original cost of the property. For qualified property rented by the taxpayer, the average net annual rent shall be multiplied by the number of years of the lease for which the taxpayer was originally bound, not to exceed ten years or the end of the third year after the entitlement period, whichever is earlier. The rental of land included in and incidental to the leasing of a building shall not be excluded from the computation;(8) Motor vehicle shall mean any motor vehicle, semitrailer, or trailer as defined in the Motor Vehicle Registration Act and subject to licensing for operation on the highways;(9) Nebraska employee shall mean an individual who is either a resident or partial-year resident of Nebraska;(10) Number of new employees shall mean the excess of the number of equivalent employees employed at the project during a year over the number of equivalent employees during the base year;(11) Qualified business shall mean any business engaged in the activities listed in subdivisions (b)(i) through (v) of this subdivision or in the storage, warehousing, distribution, transportation, or sale of tangible personal property. Qualified business shall not include any business activity in which eighty percent or more of the total sales are sales to the ultimate consumer of food prepared for immediate consumption or are sales to the ultimate consumer of tangible personal property which is not (a) assembled, fabricated, manufactured, or processed by the taxpayer or (b) used by the purchaser in any of the following activities:(i) The conducting of research, development, or testing for scientific, agricultural, animal husbandry, food product, or industrial purposes;(ii) The performance of data processing, telecommunication, insurance, or financial services. Financial services for purposes of this subdivision shall only include financial services provided by any financial institution subject to tax under Chapter 77, article 38, or any person or entity licensed by the Department of Banking and Finance or the Securities and Exchange Commission;(iii) The assembly, fabrication, manufacture, or processing of tangible personal property;(iv) The administrative management of any activities, including headquarter facilities relating to such activities; or(v) Any combination of the activities listed in this subdivision;(12) Qualified employee leasing company shall mean a company which places all employees of a client-lessee on its payroll and leases such employees to the client-lessee on an ongoing basis for a fee and, by written agreement between the employee leasing company and a client-lessee, grants to the client-lessee input into the hiring and firing of the employees leased to the client-lessee;(13) Qualified property shall mean any tangible property of a type subject to depreciation, amortization, or other recovery under the Internal Revenue Code of 1986, or the components of such property, that will be located and used at the project. Qualified property shall not include (a) aircraft, barges, motor vehicles, railroad rolling stock, or watercraft or (b) property that is rented by the taxpayer qualifying under the Employment and Investment Growth Act to another person;(14) Related persons shall mean any corporations, partnerships, limited liability companies, or joint ventures which are or would otherwise be members of the same unitary group, if incorporated, or any persons who are considered to be related persons under either section 267(b) and (c) or section 707(b) of the Internal Revenue Code of 1986;(15) Taxpayer shall mean any person subject to the sales and use taxes and either an income tax imposed by the Nebraska Revenue Act of 1967 or a franchise tax under sections 77-3801 to 77-3807, any corporation, partnership, limited liability company, or joint venture that is or would otherwise be a member of the same unitary group, if incorporated, which is, or whose partners, members, or owners representing an ownership interest of at least ninety percent of such entity are, subject to such taxes, and any other partnership, limited liability company, S corporation, or joint venture when the partners, shareholders, or members representing an ownership interest of at least ninety percent of such entity are subject to such taxes; and(16) Year shall mean the taxable year of the taxpayer.The changes made in this section by Laws 1997, LB 264, apply to investments made or employment on or after January 1, 1997, and for all agreements in effect on or after January 1, 1997. SourceLaws 1987, LB 775, § 3; Laws 1988, LB 1234, § 4; Laws 1993, LB 121, § 517; Laws 1997, LB 264, § 2; Laws 1999, LB 539, § 5; Laws 2004, LB 1065, § 10; Laws 2005, LB 274, § 278. Cross ReferencesMotor Vehicle Registration Act, see section 60-301.Nebraska Revenue Act of 1967, see section 77-2701. AnnotationsComponents are not qualified property unless they are part of the tangible property otherwise covered by subsection (13) of this section, and they are themselves depreciable or subject to amortization or other recovery. Goodyear Tire & Rubber Co. v. State, 275 Neb. 594, 748 N.W.2d 42 (2008).The definition of "tangible property" under subsection (13) of this section shall be interpreted using the Internal Revenue Code of 1986. Computer software in this case constitutes tangible property within the definition of "qualified property" in subsection (13) of this section. First Data Corp. v. State, Dept. of Revenue, 263 Neb. 344, 639 N.W.2d 898 (2002).