Instructions For Form 3800n - Nebraska Employment And Investment Credit Computation printable pdf download

INSTRUCTIONS

These instructions are primarily for those taxpayers claiming credits

Thus, a business that sells goods to the consumer for his or her

under the Employment Expansion and Investment Incentive Act

consumption will generally not qualify for the credit if such sales

(LB 270).

account for at least 80 percent of the business’ total sales. A

manufacturer selling products to a wholesaler will qualify, as will

SPECIAL INSTRUCTIONS FOR TAXPAYERS

a manufacturer or wholesaler selling products to a retail operation.

CLAIMING CREDIT UNDER EMPLOYMENT

Businesses which do not qualify include:

AND INVESTMENT GROWTH ACT (LB 775)

If the business is using the Employment and Investment Growth

•

Restaurants,

Act credit to reduce its income tax liability, complete line 1 and

•

Most retailers,

lines 34 through 39. Enter the amount of credit being used

•

Contractors, repairpersons, installers, and most persons

from Form 775N, and from line 38, Form 3800N on lines 25

providing services.

and 29. The other lines on Form 3800N do not have to be

completed. If you are claiming credits from both the

A business conducting mixed activities must separate the activities

Employment and Investment Growth Act and the Employment

into qualifying and nonqualifying calculations.

Expansion and Investment Incentive Act, contact Audit Services

ENTERPRISE ZONE. If your location is within a Nebraska

of the Nebraska Department of Revenue for instructions before

enterprise zone designated by the Department of Economic

completing Form 3800N.

Development and you employ residents of the enterprise zone,

you may qualify for increased credits. Request a Nebraska Schedule

WHO MUST FILE. Every taxpayer must complete Nebraska

I – Enterprise Zone Credit Computation from the Nebraska

Employment and Investment Credit Computation, Form 3800N,

Department of Revenue.

in order to use the credits allowed by the Employment Expansion

and Investment Incentive Act and by the Employment and

FINANCIAL INSTITUTIONS subject to the Nebraska financial

Investment Growth Act. The prior version of this form must be

institutions tax, may qualify for employment and investment credits.

used to claim or amend LB 270 credits for tax year 2003 or earlier.

The credits cannot be used to reduce a financial institution’s tax

LB 270 credits are not available for 2004 or after. Every taxpayer

liability on Form 1120NF, but may be used to claim a Nebraska

who qualifies for credits under the Employment Expansion

sales and use tax refund.

and Investment Incentive Act is required to file Form 3800N

EXISTING BUSINESS. Credits will not be allowed for the

for the two years after the year in which credits were earned.

acquisition of an existing business.

For example: if Company A filed Form 3800N and earned

RELATED PARTIES. Any investment obtained in any manner

employment and investment incentive credits in tax year 2002,

from a related party, and any employees who were employed by a

Company A must, at the minimum, file Form 3800N in tax years

related party in the current year or the three preceding years, must

2003 and 2004 even though all of the credits may have been used

be excluded from the credit computation.

in 2002.

Related parties include any corporations that are part of a unitary

WHEN AND WHERE TO FILE. This computation must be

business, any other business entities that would be a part of the

completed and attached to the income tax return filed by an

unitary business if they were corporations, and any business entities

individual, corporation, fiduciary, partnership, limited liability

if at least 50 percent of such entities are owned by the same

company, or S corporation for which a credit is claimed.

persons or related taxpayers and family members as defined in the

Partners, shareholders, members, or beneficiaries who

ownership attribution rules of the Internal Revenue Code.

are allowed any distributive credits from a partnership,

MULTIPLE LOCATIONS. One business location includes two

S corporation, limited liability company, or fiduciary should

or more parcels of real property within the same municipality or

complete lines 16 through 31 and Credit Distribution, Form 3800N.

the same county when the business activities occurring on such

A copy of the Form 3800N filed by the partnership, S corporation,

parcels are interdependent. Being parts of the same unitary business

limited liability company, or fiduciary must be attached to the

is not sufficient to show interdependence between such parcels. A

taxpayer’s Form 3800N. These credits may only be used to reduce

taxpayer with multiple business locations in Nebraska must provide

the taxpayer’s income tax liability.

the Nebraska identification number for each entity and calculate

QUALIFYING BUSINESSES FOR LB270 include those

the employment and investment credits using two methods.

businesses listed on the front page of this form and include those

Compute the credits for each separate qualified business

businesses making sales of tangible personal property if more than

location of the taxpayer. The credits must be totaled for

20 percent of the total sales are in any combination of the following:

locations that qualify.

Sales for resale (wholesale sales),

Compute credits based on the total business activity in

Sales of tangible personal property assembled, fabricated,

the state, regardless of whether or not each location is a

qualified business activity.

manufactured, or processed by the seller, or

The taxpayer is entitled to the smaller of the two credit amounts

Sales of tangible personal property used by the purchaser

computed under methods 1 and 2. Copies of all workpapers used

in any of the listed qualifying activities.

to calculate the credits under both methods must be attached

NONQUALIFYING BUSINESSES include any business in

to Form 3800N when filed.

which 80 percent or more of the total sales of the business are

NOTE: You must increase both your employment by at

retail sales of tangible personal property to the ultimate user or

least two employees and your investment by at least $75,000

consumer of the property. Sales of tangible personal property that

at the same location to qualify for any credits.

is assembled, fabricated, manufactured, or processed by the taxpayer

or that is used by the purchaser in the business activities listed on

FISCAL YEARS. The tax year reported on the taxpayer’s income

the front page of this form are not considered retail sales for this

tax return is the same period to be used when calculating the

test.

credits on Form 3800N.

Instructions For Form 3800n - Nebraska Employment And Investment Credit Computation

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