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

Plain-English summary

This is the second of a pair of Nebraska rulings defining which computer peripheral components qualify for the personal property tax exemption under the Employment and Investment Growth Act (LB 775). Ruling 29-91-2 applies the amended, narrower definition — its companion, Revenue Ruling 29-91-1, applies the older, broader one, and which governs depends on when the incentive application was filed.

Effective date: this ruling is effective for applications filed on and after January 1, 1989, applying the definition in Neb. Rev. Stat. § 77-4105(2)(b), R.S.Supp. 1988.

The holding: under the amended statute, only the peripheral components specifically enumerated in the Act qualify for the exemption. That closed list is:

• additional memory units
• tape drives
• disk drives
• power supplies
• cooling units
• communication controllers

Two extra requirements the older rule didn't impose:

1. The components must directly communicate with the central processing unit (CPU).
2. They must sit in a temperature- and humidity-controlled environment that can be sustained within the manufacturer's specifications, independent of the surrounding work area (if housed in a building used exclusively for the system, the building must have environmental controls of temperature and humidity capable of maintaining those tolerances). The power controls must maintain voltage within the limits prescribed by the mainframe manufacturer.

This is the practical difference from the companion ruling: the 1988 amendment narrowed the exemption from "all peripheral components connected to the computer" down to a fixed list of climate-controlled, CPU-connected devices. When a Form 775P is filed, the Department decides whether each claimed item qualifies under § 77-4105(2)(b), R.S.Supp. 1988, and applicants must document each item's claim. This ruling supersedes Rev. Rul. 29-89-3. Approved in 1991.

Source-quality note: the official PDF is a scanned image and the machine-extracted "Original ruling text" below is heavily garbled. The effective date (on and after January 1, 1989), the enumerated component list, the environmental-control requirements, and the statutory citations summarized here were confirmed against a cleaner reading of the same scanned document; the superseded ruling number reads as 29-89-3 in context (the earlier companion to 29-89-2 superseded by 29-91-1).

What this means for you

A company that applied for LB 775 incentives on or after January 1, 1989

Only the six enumerated components qualify — additional memory units, tape drives, disk drives, power supplies, cooling units, and communication controllers — and only if they directly connect to the CPU and live in a properly temperature-, humidity-, and power-controlled environment. Equipment outside that list, or not climate-controlled to spec, doesn't get the exemption.

A company that applied before January 1, 1989

The broader older definition in the companion Revenue Ruling 29-91-1 applies to you instead; it doesn't require the environmental controls and isn't limited to the six-item list.

Common questions

Q: Which peripheral components qualify under the post-1989 rule?
A: Only additional memory units, tape drives, disk drives, power supplies, cooling units, and communication controllers — and only if they directly communicate with the CPU and are kept in a temperature-, humidity-, and power-controlled environment within the manufacturer's specifications.

Q: How is this different from Revenue Ruling 29-91-1?
A: 29-91-1 (for pre-1989 applications) covered "all peripheral components connected to" the computer without environmental-control requirements. 29-91-2 narrows the exemption to a fixed enumerated list and adds the climate- and power-control conditions.

Q: Which ruling applies to my application?
A: 29-91-2 applies to applications filed on and after January 1, 1989; 29-91-1 applies to applications filed before that date.

Citations and references

• Neb. Rev. Stat. § 77-4105(2), R.S.Supp. 1988 — the classes of property exempt from personal property tax under the Act.
• Neb. Rev. Stat. § 77-4105(2)(b), R.S.Supp. 1988 — the amended definition limiting the exemption to enumerated peripheral components requiring environmental controls.
• Revenue Ruling 29-91-1 — the companion ruling applying the older, broader definition for applications filed before January 1, 1989.
• Rev. Rul. 29-89-3 — 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/rr299102_peripheral_comp.pdf

Original ruling text

Tnebräska

l3¡?3i#iT

Revenue Ruling Z9-gI-2
Supersedes Rev. Rul. 29-99-3

O¡ILY THOSE PERTPHERÀI, CO}IPONEN

EIIÍPLOr¡{ENT ÀND II.¡I/ESTT4ENT GROWTH ÀCT QUÀTIFY FOR EXET{PTTON FROU
PERSONÀL PROPERTY TÀx.
THIS RIJLTNG IS EFFECTTVE FOR AppLICÀTIONS FILED ON ÀÀrD À¡'TER JÀÀrUÀRy Lr 1ggg.

Àdvice has been requested as to what,peripheral components may
qualify for the exemption from personal-proþerty tax þrovided ih
the Employment and Investment Growth Àct,
The Act allows a property tax exemption for th¡ee classes of
property located in the state of Nebraska and used in connection
with. a Prgject, within the sÈate that meets the requirements set
out in section 77-4105(2), R.S.Supp., 1988.
section 77-4105(2) (b), R.s.supp., 1988, provides an exemption
from personal property t,ax for:
Mainframe business computers
plus a1l
peripheral componenÈs which require énvironmentaL controls of t,emperature and povrer
connected to such computers. Comþuter
peripheral components shalL be U.miÈed to
addit,ional memory units, tape drives, disk
drives, poner supplies, cooling units, and
cournunication controllers ;

In dete:mining what peripheral components qualify for the
exemption from personal property tax, the fol lowing definition
will be used by the State Tax Commis sioner:
PERTPHERÀ¡ cotfPoNENTs These devices are specífically
enune¡ated in the Employment and Investment erowth Act anä
are limited Èo additional memorT unit,s, Èape d¡ives, disk
d¡ives, power supplies, cooling units, and comnunication
controllers which dÍrectly comnunicate with the central
processing unit (cPU). These peripheral components shalr
be rocated in a temperature and hr:nidity controlled
enviror¡¡rent which is capabre of being sustainèa within the
manufacturer's specifications, independent from the ambient
condit,ions of tt¡e srxrrounding work atea. rf these devices
are located within a building exclusively used to house the
system, the building must be supported by envíronneatal
controls of tenperatu¡e and hr¡¡ridity capable of u¡aintaining
the environ¡¡ental tolerances within the manufactr¡rer'è
specifications.
The power controls must maintain
controlled levels of voltage within the limits prescribed
by the mainfra¡re manuf acturer.

Revenue Ruling 29-9L-2

page 2.
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gPon --receiPù of a uebraska Personal prope+y Returrr, Fo:¡r:ì775p,
the Nebraska Depa::tnent of Revenue shali aete¡¡rinè i¡rretfrei, eá.Í.
._

iteur clai-med qualífies for exemption. This aeiãbe made in accordance wiÈh seètion 77-4Losr2rt
1988' subJect to the defi.nition containãd-'iá'
Àpplicants rl+l be required to provÍde
suffiãle
and docr¡¡rent,ation in support of eac-h iten,s crai¡¡-i
APPROVED:

M. Berri
State Tax Comnissioner

llarch ll , 1991

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