When a company covered by Nebraska's Employment Expansion and Investment Incentive Act opens a new location partway through the year, whose taxable year does it use to figure employment and investment?

Plain-English summary

Nebraska's Employment Expansion and Investment Incentive Act gave credits to businesses that increased employment and investment. This short ruling answers a mechanical but important question: when a company that already operates in Nebraska opens a new location partway through the year, does it measure that new location's employment and investment over the short stub period the site was actually open, or over the company's full taxable year?

The core holding: the calculation of employment and investment "must be determined based on the taxable years of the company as a whole." A new location that begins business during the taxable year "must report employment and investment levels based on the taxable year of the existing locations." In other words, you don't create a special short measuring period for the new site -- you fold it into the company's existing annual cycle.

The worked example. The ruling walks through Company B:

• Company B has two existing locations, X and Y, and a taxable year that runs January 1 through December 31.
• On May 15, 1990, Company B begins business at a new location Z and invests $200,000 of qualified investment that day.
• Location Z has no employees on May 15; two employees are hired June 1, 1990; and two more (for a total of four) on September 1, 1990.

The Nebraska Employment and Investment Credit Computation, Form 3800N, for location Z is then completed using the company's full January-December taxable year (the ruling refers to an attached sample Form 3800N).

Because this ruling was distributed as a scanned image, the attached sample form did not convert cleanly to text; the operative rule and the narrative example above are legible, but the line-by-line figures on the attached form are not reproduced here. See the linked source PDF for the sample form.

What this means for you

A company adding a Nebraska location mid-year under this program

Measure the new location's employment and investment on your company-wide taxable year, the same year your existing locations use -- not on the partial period the new site was open. This keeps all of your locations on one consistent annual measuring period for the credit.

Preparers completing Form 3800N for a new site

Use the company's existing taxable year on the new location's Form 3800N. The ruling's Company B example shows the pattern: investment counted when made during the year, and employees counted as of the applicable dates within that same annual cycle.

Common questions

Q: Do I use a short period for a location that opened mid-year?
A: No. The ruling says employment and investment are determined based on the company's taxable years as a whole, and a new location reports based on the taxable year of the existing locations.

Q: Which form is used?
A: The Nebraska Employment and Investment Credit Computation, Form 3800N, completed for the new location using the company's taxable year.

Q: Why isn't the sample form shown here?
A: The ruling is a scanned document, and the attached sample Form 3800N did not extract cleanly to text. The holding and example are legible; consult the source PDF for the completed sample form.

Q: Can I rely on this ruling today?
A: It is the Department's general policy and is "binding on the Nebraska Department of Revenue until amended," but this incentive program has since evolved. Confirm current law and consult a Nebraska tax professional.

Citations and references

• Nebraska Revenue Ruling 29-90-2, "Economic Development Tax Incentives -- New Location" (Nebraska Department of Revenue, issued January 3, 1991; approved by State Tax Commissioner John M. Boehm). The legible ruling text cites no statute sections; it interprets the employment-and-investment measuring period under the Employment Expansion and Investment Incentive Act and refers to Form 3800N (Nebraska Employment and Investment Credit Computation).
• Related ruling: Revenue Ruling 29-90-1 (Short Period Returns), issued in the same series, addresses how Form 3800N is modified for a short-period return.

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr299002_new_location.pdf

Original ruling text

Revenue Ruling 29-90-2

Economic Development Tax Incentives - New Location.

UNDER THE

EMPLOYMENT EXPÀNSTON ÀND TNVESTT{ENT TNCENfTVE ÀCT, THE
CAI-.CULÀTION OF EMPLOYMENT ÀND TNVESTMENT I,IUST BE DETERMINED
BÀSED ON THE TÀXABLE YEARS OF THE COT{PANY ÀS A WHOLE. À NETÍ
LOCÀTION WTIICH BEGINS BUSINESS DURING THE TAXÀBLE YEAR ITIUST
REPORT EI{PLOY}ÍENT AND IIIVESTI{ENT LEVELS BASED ON THE TAXÀBLE
YEAR OF THE EXISTING LOCATIONS.

Advice has been requested regarding the calculation of
employment and investment for companies which are adding nevr
locations.
The employment and investment calculations must be determined
based on the taxable years of the comPany as a whole. A new
location which begins business during the taxable year must
report employment, and investment levels based on the taxable
year of the existing locations.
For example, Company B has two existing locations, X and Y, on
Company B's taxable year runs from January 1
January L, 1990.
through December 31. On May 15, 1990, Company B began business
at a nen locat,ion Z and invested $2001000 of qualified investOn May 15, 1990, location Z had no
ment on that date.
employees. On June L, 1990, two employees ÍIere hired at
l-ocation Zt and on September L, 1990, two more employees (for a
total of four) were hired at location Z. The Nebraska Employment and Investment Credit Computation, I'orm 3800N, for location
Z should be completed in the following manner: (see attached
sample Form 3800N).

APPROVED:

(

//rr/,,^
U"n
lonn t.
Boehm

State Tax Commissioner
January 3rr( , 1991

Àttachment

NEBRASKA EMPLOYMENT AND INVESTMENT CREDIT COMPUTATION
for Tax Years After 1988

a

19
Name as Shown on Retum

and end
Social Security No. or Nebraska l.D. No.

Occuned

ifying Business

(2t
(3)

(check

one) (see instruclions)

l-l

L'l ¡eøins of tivestock

(a)

I

Storage, warehousing, distribution, transportat¡on, or sale of

1 120-SN

065N

(6)E

1

f'r

1

1

rarm¡ng or ranching

(8)

Any combination of activit¡es 1 through 7; list types:

! s¡ngle location (2) E Murupe locations or related parties (see insfirctions)

4 Reason for filing (check only one):
(2)

-.r

!

(s)! 1041

managem€nt, or headqualers of any activity which
ØT Administrative
includes ¡tems lhrough 6 above, or the headquartärs of a'retailer

2 Number of Nebraska business locations: (1)

(1)

E
T

(4)

I 120N

' !
¡

property

(2)

I 1o4oN

(S) l--l Conducting research, development, or test¡ng for scientific,
'
agricultural, animal husbandry, or industrial purposes
Performanceof data processing, telecommunication, insurance, or
,U,

fabrication, manufacture, or processing of tangible
,.',
¡L-J Assembly,
r
personal

(3)

3800N

19
Type of Feturn

(r)

Locåtion Address(es)

FORM

f] Cle¡m origina.t tax øedits

(3)

and investmeni levels
NEBRASKA OUAUFIED EMPLOYEE CALCULATION
(A)

Peceding
Year
End

the

NO. OF FULL-TIME EMPLOYEES IN NEBRASKA

(B)

Flrst
Ouartêr

o

5

retail (percent):-a/o

tr Cla¡m credit for additionat employees hired ln current year
! Report employment and ¡nvesrnent levels for two years atter credits claimed

.-Ì: :.Taxpayers.claiminq¡'oiigÍnal tax credits must increasebolh employment
Tar Year

3 Total sales which are

(c)
Second

Quarter

(D)

Thlrd
Oua¡te¡

4

AVERAGE

(E)

Dlvlde Total ot Columns

Fourth
Ouartet

during current year .................
¿l
D
2
6 First preceding year ............
7 SeconC preceding year .............
I Thírd preceding year.............
Enter highest of lines 6, 7, or I's averages
10 TOTAL increased Nebraska employment eligible for tax credit (line
5 minus line 9; round
result d own to lower whole number)
11 Total tentative em
credit amount ine 10
ied
$1

I

amountg in:.the sametax

A,B,C,D,andEbys
5

Õ

6

7
8

I
I0

z

11

NEBRASKA OUALIFIED INVESTMENT CALCULATION
Ta¡ Yea¡

TOTAL NEBRASKA OUALIFIED INVESTMENT
(A) B€glnnlng of Year

(B) End of Yoar

(c) AVERAGE
(Dlvldo Totât ol Columns

12 Current year
$
12
13 First preceding year
13
1 4 Second preceding year .............
14
I 5 Third preceding year.............
15
16 Enter the current end of year i nvestment amount (line 12, Column
16 $
17 Enter the hlghest of t¡nes 1 2(A), 1 3(C), 1 4(C), or 1s(C)
17 $
18 Total Nebraska qualified investment (line 16 minus line 17). lf less
than 975,000, enter zero
18
'!9 Total calculated investment cred¡ts (line
1 8 divided by $75,000; round result down
to lower whole number) .. 19
20 Total tentative investment credit amount (line 19 multiplied by
91,000)
20
21 Total employment and ¡nvestment incentive credits (line 11 plus line
20)
21
22 Amount of Nebraska sales and u se tax refunds claimed to date
?2
23
of your
credit amount from line
A on reverse side.
23
24 Total Nebraska employment and investment credits canied fonrard from
earlier year(s) (List
) 24
25 Total available credit amounts (total of lines 2'1,23, and24i minus line
22) .............
25 $
26 Nebraska income tax liability
26
27 Credit for tax paid to another state ...........
27
28 Credit for elderly or handicapped
28
29 Form CDN credit ...
29
30 Credit for child and dependent care expenses
30
31 Total nonrefundabte credits (totat of lines 27 through 30)
31 $
32 Nebraska income tax liability after nonrefundable credits (line 26 minus line
31)
32
33 50 percent of line 32 (multipty line 32 by .50)
33
34 Credit used to reduce income tax liability (line 25 or line 33, whichever is
less)
34
35 Form Z75N credit (from line 1S, Form 775N and line 48, Part C on reverse side)
35
36 Total Form 3800N credit (totalof lines 34 and 35). Enter here and on Form 1040N,
1 120N, or 1041N...
36
37 Amount of credits distributed to partners, shareholders, and beneficiaries on line
43, part B on reverse side.. 37
38 Total Nebr
nst
and
credit to be
fonrard ne
lines
&
38

AandB uy 4t

$

to> o¡>^

$

2,ooc

00

years:

Rev.7-90