Which computer peripheral components qualify for Nebraska's LB 775 personal property tax exemption under the older, pre-1989 rule?

Plain-English summary

Nebraska's Employment and Investment Growth Act (LB 775) gave a personal property tax exemption for certain computer equipment used in a qualifying project — specifically mainframe business computers plus their peripheral components. This ruling defines which peripheral components qualify under the older, pre-1989 version of the statute.

This is the first of a pair. Ruling 29-91-1 applies the definition in Neb. Rev. Stat. § 77-4105(2)(b), R.S.Supp. 1987, which exempted "mainframe business computers plus all peripheral components connected to such computers." Its companion, Revenue Ruling 29-91-2, applies the amended (narrower) definition for later applications. Which ruling governs depends on when the incentive application was filed.

The holding: to qualify for the exemption under this older rule, peripheral components must directly communicate with the mainframe business computer.

What counts as a peripheral component (broad, under the 1987 definition): the ruling defines peripheral components as all devices used to input business information into the CPU of the mainframe, output business information after it's processed, or store processed or unprocessed business information for later use. It draws on general definitions of "peripheral equipment" — input/output and auxiliary storage units attached by cables to the CPU, such as graphics tablets, visual display terminals, and floppy disk drives.

A key difference from the later rule: under this older definition, such devices need not be maintained within the temperature and humidity controls required for the mainframe itself, and do not require the additional environmental controls the mainframe needs. (The amended definition in the companion 29-91-2 adds exactly those environmental-control requirements and limits the exemption to an enumerated list.)

When a Nebraska Personal Property Return (Form 775P) is filed, the Department determines whether each claimed item qualifies under § 77-4105(2)(b), R.S.Supp. 1987, subject to these definitions; applicants must provide sufficient explanation and documentation for each item. This ruling supersedes Rev. Rul. 29-89-2. Approved in 1991.

Source-quality note: the official PDF is a scanned image and the machine-extracted "Original ruling text" below is partly garbled. In particular, the year in this ruling's effective-date line is not clearly legible in the scan (it reads as either 1989 or 1999). The January 1, 1989 cutoff used here is grounded in the legible companion Revenue Ruling 29-91-2 (effective for applications filed on and after January 1, 1989) and in the statutory amendment (R.S.Supp. 1987 vs. 1988) that separates the two rulings. The holding, definitions, and citations were confirmed against a cleaner reading of the same scanned document.

What this means for you

A company that applied for LB 775 incentives before January 1, 1989

This older ruling governs your peripheral-component exemption. A component qualifies if it directly communicates with the mainframe business computer and fits the broad input/output/storage definition — and, unlike under the later rule, it doesn't have to sit inside the mainframe's temperature, humidity, and power controls.

A company that applied on or after January 1, 1989

Use the companion Revenue Ruling 29-91-2 instead — the statute was amended to narrow which peripheral components qualify and to require environmental controls.

Common questions

Q: Which peripheral components qualify under this older rule?
A: Those that directly communicate with the mainframe business computer and are used to input, output, or store business information for the mainframe's CPU.

Q: Do the components have to be in a climate-controlled room?
A: Not under this pre-1989 definition — the ruling says such devices need not be maintained within the temperature and humidity controls required for the mainframe. The later companion ruling changes that.

Q: Which ruling applies to me — 29-91-1 or 29-91-2?
A: 29-91-1 applies to applications filed before the January 1, 1989 cutoff; 29-91-2 applies to applications filed on and after that date.

Citations and references

• Neb. Rev. Stat. § 77-4105(2), R.S.Supp. 1987 — the three classes of property exempt from personal property tax under the Act.
• Neb. Rev. Stat. § 77-4105(2)(b), R.S.Supp. 1987 — exempts mainframe business computers plus all peripheral components connected to such computers (the older definition applied here).
• Revenue Ruling 29-91-2 — the companion ruling applying the amended, narrower definition for applications filed on and after January 1, 1989.
• Rev. Rul. 29-89-2 — the earlier ruling this one supersedes.

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/rr299101_peripheral_comp.pdf

Original ruling text

Tnebiaska

I deoartment
'revenue

I of

Revenue Ruling 29-9I-L

Supersedes Rev. Rul. 29-89-2

Economic Development Tax Incentives - Peripheral Components.
PERIPHERÀL CO}ÍPONENTS MUST DIRECTLY COUffT'NICÀIE WTTH THE
MÀINFRÀME BUSTNESS COI'fPUTER TO QUALTFY FOR EXEt{pTrON FROM
PERSONÀI, PROPERTY TÀX.
THIS RI'LTNG TS EFFECTIVE FOR
ÀPPLICATIONS FrLED BEFORE JÀNUÀRY L, 1999.

Àdvice has been requested as to v¡hat peripheral components may
qualify for the exemption from personal property tax provided in
the Employment and fnvestment Grovtth Àct.
The Àct allo¡rs a property tax exemption for three classes of
property l-ocated in the state of Nebraska and used in connecÈion
with a project within the state that meets the requirements set
out, in section 77-4105(2), R.S.Supp., 1987.
Section 77-4105(2) (b), R.S.Supp., 1987, provides an exemption
from personal property tax for:
plus all
Mainframe business computers
peripheral components connected to such
computers;

fn determining what peripheral components qualify for the
exemption from personal property tax, the following definitions
will be used by the State Tax Commissj-oner:
PERIPEERÀL COüPOIÙE¡flTS

Peripheral
Operation of input/output and other
devices not under direct computer control; most conmonly used Èo designate the transfer of information
between nagnetic tapes and other media.
Component - À basic parti an eLement.

PeripheraJ. Equipment The input/output units and
auxiliary storage units of a compuÈer system, attached
by cables to the central processing unit (CPU). Used
to geÈ data in and data out, and t,o act as a rese:¡¡oir
for large anounts of data that cannot be held in the
Graphics tablets, visual display
CPU at one time.
terminals, and floppy disk drives are examples of
peripheral equipmenÈ.

Periphèral components, therefore, shalL mean aLL devices
which are used to input business information into the CPU
of the mainframe, to output business information after

Revenue Ruling 29_91_1

Page 2

being 'processed.by the clu,. or Èo store
either process"á o= í
unprocessed business infoärãiiã" -;;=.u-sg
ar a-lãter ti¡ne. \
such devices need not Èe mainraineã witr,irr-lrrã
Ëãrp.=uture
and humidiÈy conrrorred
req,¡ii"à- for rhe
mainframe, tóf sha1l -tir"y ;;r;r*"r,t
._require aadiiio=rrãÎ-Jorrtrors
o'"o'o
of
-urir.iries
those
3:å;ïf:, .
"å.'"uy lãi"tained, by thÀ
Upon receipt of a Nebraska persona
I Prop erty Return , Fo¡¡r 77Sp
the Nebraska D epartmen
t
of
Revenue
shaLl deterrnine whether each,
item claimed qualifies for exemption.
be made in accordance with section This de termination will
77-4L05 (2) (b) ¡ R.S . SUPP.
L987, sub j ect to the defÍnit J-ons contained
.t-n
Àpp1 icants will be required
this ruling. ,
to
provide
suff icienÈ expl anatÍon
and document ation in su pport of
each i Èem's cLaim for exemption.

t{. Berri
State Tax Commissioner
Ìtarch l/ ,1991