Form 775n - Nebraska Employment And Investment Growth Act Credit Computation Page 6
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8INSTRUCTIONS
For 1987 applications, the average number of employees is
WHO MUST FILE. Any taxpayer who has filed a project
determined by converting into equivalent employees of 40
application for an agreement with the State Tax Commissioner
hours per week the number of hours paid for the time periods
must file a Nebraska Employment and Investment Growth Act
including the first day of the year and the last day of each
Credit Computation, Form 775N, for each year from the filing of the
quarter of the year.
application through the expiration of all incentives under the Act.
For applications filed after January 1, 1988, the annual average
WHEN AND WHERE TO FILE. This computation must be filed
number of new employees is determined by converting into
as an attachment to the taxpayer’s Nebraska income tax return.
equivalent employees the total number of hours paid per year,
However, the taxpayer may elect to file the form reporting the initial
divided by (40 multiplied by the number of weeks in the year).
attainment of the required levels immediately after the last day of
the year the required levels were met.
9. Qualifying business. Any business engaged in the
following activities:
ROUND TO WHOLE DOLLARS. Any amount from fifty cents
through 99 cents is to be rounded to the next higher dollar; and any
a.
The conducting of research, development, or testing for
amount less than 50 cents is to be rounded to the next lower dollar.
scientific, agricultural, animal husbandry, food product,
The amounts on the computation form must be shown in whole
or industrial purposes;
dollars.
b.
The performance of data processing, telecom-munication,
DEFINITIONS.
insurance, or financial services;
1. Base year. The year immediately preceding the year during
c.
The as s embly, fabrication, manuf actur e, or
which the application was submitted by the taxpayer.
processing of tangible personal property;
d.
The storage, warehousing, distribution, or trans-portation
2. Base-year employee. Any individual who was employed
of tangible personal property;
in Nebraska and subject to the Nebraska income tax on
compensation received from the taxpayer or its predecessors
e.
The sale of tangible personal property if more than 20
during the base year and who was employed at the project at
percent of the total sales are in any combination of the
some time since the end of the year preceding the base year.
following:
For companies acquired by the taxpayer after the year of
(1) Sales for resale (wholesale sales),
application, the base year for the acquired company shall be
(2) Sales of tangible personal property assembled,
the twelve months preceding the year of acquisition. Make
fabricated, manufactured, or processed by the seller,
adjustment on line 4 of Worksheet A-1 or A-2, depending on
or
the year of application.
(3) Sales of tangible personal property used by the
3. Compensation. The wages and other payments subject
purchaser in any of the listed qualifying activities;
to withholding for federal income tax purposes. Normally,
f.
The administrative management of any activities,
moving expenses paid by the employer to the employee
including headquarter facilities, relating to such
and 401K contributions made by an employee are not
activities; or
compensation.
g.
Any combination of the activities listed above.
4.
Entitlement period. The year during which the required
10. Qualified employee leasing company. A qualified
increases in employment and investment were first met or
employee leasing company is a company that places all
exceeded, and the next six years.
employees of a client-lessee on its payroll and leases such
5.
Investment. The value of qualified property incorporated
employees to the client-lessee on an ongoing basis for a fee
into or used at the project. For qualified property owned by
and, that also grants to the client-lessee input into hiring and
the taxpayer, the value is the original cost of the property.
firing decisions. A qualified employee leasing company does
not include a temporary employment agency.
For qualified property rented by the taxpayer, the average net
annual rent is multiplied by the number of years of the lease
11. Qualified property. Any tangible property of a type subject
for which the taxpayer is initially bound, not to exceed ten
to depreciation, amortization, or other recovery under the
years for 1987 applications. For applications after January 1,
Internal Revenue Code of 1986, or components of such
1988, the average net annual rent is multiplied by the number
property, that will be located and used at the project. Qualified
of years for which the taxpayer is initially bound, not to exceed
property does not include: (a) aircraft, barges, motor vehicles,
ten years or the end of the third year after the entitlement
railroad rolling stock, watercraft, or computer software
period, whichever is earlier. The rental of land included in
(Revenue Ruling 29-87-11), or (b) property that is rented by
and incidental to the leasing of a building is included in the
the taxpayer qualifying under the Employment and Investment
computation.
Growth Act to another person.
6.
Motor vehicle. Any motor vehicle, trailer, or semitrailer as
12. Taxpayer. Any person subject to sales and use tax, and
defined in section 60-301 and subject to licensing for operation
either an income tax imposed by the Nebraska Revenue Act
on the highways.
of 1967 or a franchise tax under Chapter 77, article 38, any
corporation that is a member of the same unitary group which
7.
Nebraska employee. An individual who is either a resident
is subject to such taxes, and any partnership, S corporation,
or partial-year resident of Nebraska.
or joint venture when the partners, shareholders, or members
8.
Number of new employees. The excess of the average
are subject to such taxes.
number of employees employed at the project during a year
13. Year. The taxable year of the taxpayer.
over the average number of base-year employees.
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