State Fact Sheet

Tax Incentive Evaluation Law: Nebraska

Note: This page was updated in April 2016 to enhance the accuracy of the excerpt from Nebraska’s tax incentive evaluation law.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.

Nebraska

L.B. 538, enacted May 27, 2015

What it does

Requires evaluation of all major tax incentives

The nonpartisan Legislative Audit Office will review each tax incentive program at least once every three years.

The Legislative Audit Office will update the evaluation schedule each year to ensure that newly created incentives are reviewed.

Sets standards for economic analysis

Evaluations will measure the economic and fiscal results of each incentive, including whether they are changing business behavior.

Outcomes will be compared with other strategies for achieving the same goals to help policymakers identify the most effective economic development strategies.

Excerpt from Nebraska’s law: The review schedule

  1. Tax incentive performance audits shall be conducted by the [Legislative Audit Office] pursuant to this section on the following tax incentive programs:
    1. The Angel Investment Tax Credit Act;
    2. The Beginning Farmer Tax Credit Act;
    3. The Nebraska Advantage Act;
    4. The Nebraska Advantage Microenterprise Tax Credit Act;
    5. The Nebraska Advantage Research and Development Act;
    6. The Nebraska Advantage Rural Development Act;
    7. The Nebraska Job Creation and Mainstreet Revitalization Act;
    8. The New Markets Job Growth Investment Act; and
    9. Any other tax incentive program created by the Legislature for the purpose of recruitment or retention of businesses in Nebraska. In determining whether a future tax incentive program is enacted for the purpose of recruitment or retention of businesses, the office shall consider legislative intent, including legislative statements of purpose and goals, and may also consider whether the tax incentive program is promoted as a business incentive by the Department of Economic Development or other relevant state agency.
  2. The office shall develop a schedule for conducting tax incentive performance audits and shall update the schedule annually. The schedule shall ensure that each tax incentive program is reviewed at least once every three years.