77-5726 Credits; use; refund claims; procedures; interest; appointment of purchasing agent; protest; appeal.
77-5726. Credits; use;refund claims; procedures; interest; appointment of purchasing agent; protest;appeal.(1)(a) The credits prescribed in section 77-5725 shall be established by filing the forms required by the Tax Commissionerwith the income tax return for the year. The credits may be used and shallbe applied in the order in which they were first allowed. The credits maybe used after any other nonrefundable credits to reduce the taxpayer's incometax liability imposed by sections 77-2714 to 77-27,135. Any decision on howpart of the credit is applied shall not limit how the remaining credit couldbe applied under this section.(b) The taxpayer may use the credit provided in subsection(3) of section 77-5725 to reduce the taxpayer's income tax withholding employeror payor tax liability under section 77-2756 or 77-2757 to the extent suchliability is attributable to the number of new employees at the project, excludingany compensation in excess of one million dollars paid to any one employeeduring the year. The taxpayer may use the credit provided in subsection (4)of section 77-5725 to reduce the taxpayer's income tax withholding employeror payor tax liability under section 77-2756 or 77-2757 to the extent suchliability is attributable to all employees employed at the project, otherthan base-year employees and excluding any compensation in excess of one milliondollars paid to any one employee during the year. To the extent of the creditused, such withholding shall not constitute public funds or state tax revenueand shall not constitute a trust fund or be owned by the state. The use bythe taxpayer of the credit shall not change the amount that otherwise wouldbe reported by the taxpayer to the employee under section 77-2754 as incometax withheld and shall not reduce the amount that otherwise would be allowedby the state as a refundable credit on an employee's income tax return asincome tax withheld under section 77-2755.For a tier 1, tier 2, tier 3, or tier 4 project, the amountof credits used against income tax withholding shall not exceed the withholdingattributable to new employees employed at the project, excluding any compensationin excess of one million dollars paid to any one employee during the year.For a tier 6 project, the amount of credits used againstincome tax withholding shall not exceed the withholding attributable to allemployees employed at the project, other than base-year employees and excludingany compensation in excess of one million dollars paid to any one employeeduring the year.If the amount of credit used by the taxpayer against incometax withholding exceeds this amount, the excess withholding shall be returnedto the Department of Revenue in the manner provided in section 77-2756, suchexcess amount returned shall be considered unused, and the amount of unusedcredits may be used as otherwise permitted in this section or shall carryover to the extent authorized in subdivision (1)(e) ofthis section.(c) Credits may be used to obtain a refund of sales and usetaxes under the Local Option Revenue Act, the Nebraska Revenue Act of 1967,and sections 13-319, 13-324, and 13-2813 which are not otherwise refundablethat are paid on purchases, including rentals, for use at the project fora tier 1, tier 2, tier 3, or tier 4 project or for use within this state fora tier 6 project.(d) The credits earned for a tier 6 project may be used toobtain a payment from the state equal to the real property taxes due afterthe year the required levels of employment and investment were met and beforethe end of the carryover period, for real property that is included in suchproject and acquired by the taxpayer, whether by lease or purchase, afterthe date the application was filed. The payment from the state shall be madeonly after payment of the real property taxes have been made to the countyas required by law. Payments shall not be allowed for any taxes paid on realproperty for which the taxes are divided under section 18-2147 or 58-507.(e) Credits may be carried over until fully utilized, exceptthat such credits may not be carried over more than nine years after the yearof application for a tier 1 or tier 3 project, fourteen years after the yearof application for a tier 2 or tier 4 project, or more than one year pastthe end of the entitlement period for a tier 6 project.(2)(a) No refund claims shall be filed until after the requiredlevels of employment and investment have been met.(b) Refund claims shall be filed no more than once each quarterfor refunds under the Nebraska Advantage Act, except that any claim for arefund in excess of twenty-five thousand dollars may be filed at any time.(c) Refund claims for materials purchased by a purchasing agentshall include:(i) A copy of the purchasingagent appointment;(ii) The contract price; and(iii)(A) For refunds under subdivision(2)(a)(iii) or (2)(a)(v) of section 77-5725, a certification bythe contractor or repairperson of the percentage of the materials incorporatedinto or annexed to theproject on which sales and use taxes were paid to Nebraska after appointmentas purchasing agent; or(B) For refundsunder subdivision (2)(a)(iv) of section 77-5725, a certification by the contractoror repairperson of the percentage of the contract price that represents thecost of materials annexed to the project and the percentage of the materialsannexed to the project on which sales and use taxes were paid to Nebraskaafter appointment as purchasing agent.(d)All refund claims shall be filed, processed, and allowed as any other claimunder section 77-2708, except that the amounts allowed to be refunded underthe Nebraska Advantage Act shall be deemed to be overpayments and shall berefunded notwithstanding any limitation in subdivision (2)(a) of section 77-2708.The refund may be allowed if the claim is filed within three calendar yearsfrom the end of the year the required levels of employment and investmentare met or within the period set forth in section 77-2708.(e) If a claim for a refund of sales and use taxes underthe Local Option Revenue Act or sections 13-319, 13-324, and 13-2813 of morethan twenty-five thousand dollars is filed by June 15 of a given year, therefund shall be made on or after November 15 of the same year. If such a claimis filed on or after June 16 of a given year, the refund shall not be madeuntil on or after November 15 of the following year. The Tax Commissionershall notify the affected city, village, county, or municipal county of theamount of refund claims of sales and use taxes under the Local Option RevenueAct or sections 13-319, 13-324, and 13-2813 that are in excess of twenty-fivethousand dollars on or before July 1 of the year before the claims will bepaid under this section.(f) Interest shall not be allowed on any taxes refunded underthe Nebraska Advantage Act.(3) The appointment of purchasing agents shall be recognizedfor the purpose of changing the status of a contractor or repairperson asthe ultimate consumer of tangible personal property purchased after the dateof the appointment which is physically incorporated into or annexed to the project and becomes the propertyof the owner of the improvement to real estate or the taxpayer. The purchasing agent shallbe jointly liable for the payment of the sales and use tax on the purchaseswith the owner of the property.(4) A determination that a taxpayer is not engaged in a qualifiedbusiness or has failed to meet or maintain the required levels of employmentor investment for incentives, exemptions, or recapture may be protested withinsixty days after the mailing of the written notice of the proposed determination.If the notice of proposed determination is not protested within the sixty-dayperiod, the proposed determination is a final determination. If the noticeis protested, the Tax Commissioner shall issue a written order resolving suchprotests. The written order of the Tax Commissioner resolving a protest maybe appealed to the district court of Lancaster County within thirty days afterthe issuance of the order. SourceLaws 2005, LB 312, § 48; Laws 2008, LB895, § 17; Laws 2008, LB914, § 23; Laws 2009, LB164, § 7; Laws 2010, LB879, § 19.Operative Date: July 15, 2010 Cross ReferencesLocal Option Revenue Act, see section 77-27,148.Nebraska Revenue Act of 1967, see section 77-2701.