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A Comparative Analysis of Nebraska’s Tax and Incentive Climate
Prepared by KPMG LLP for the
Nebraska Chamber of Commerce & IndustryNebraska Department of Economic Development
Nebraska DiplomatsGreater Omaha Chamber of Commerce
Lincoln Chamber of Commerce
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To: Nebraska Chamber of Commerce & Industry, Greater Omaha Chamber of Commerce, Lincoln Chamber ofCommerce, Nebraska Department of Economic Development, Nebraska Diplomats
We are pleased to deliver to you this study, A Comparative Analysis of Nebraska’s Tax and Incentive Climate. This study is used to analyze taxes and incentives for several different types of business operations across multiple geographic locations. The study applies current business tax and incentive data to a set of business operating specifications that are held constant for all jurisdictions. The result is a comparison of the estimated taxes and incentives that might be incurred and received as a result of establishing and operating a facility in each jurisdiction.
This study is based on specific comparisons of different types of business operations, from the viewpoint of a business investor. It should not be interpreted as comparing overall productivity and costs of doing business between jurisdictions.
The comparisons presented in this report are based on standard tax and financial assumptions. Net present value was not applied to calculations for future years.
For major business investments, it is common practice for governments to offer incentive packages on a discretionary basis. These packages typically comprise a complex set of financing assistance and tax abatements tailored to specific investment and job creation proposals. The analysis in this report attempts to distinguish among jurisdictions based on discretionary incentives, based on KPMG’s knowledge of and experiences with the various jurisdictions. However, any discretionary incentives quantified in this report are merely estimates, and may not necessarily reflect actual incentives available, because:
• It is not possible to accurately predict whether any jurisdiction will be more or less willing than another jurisdiction to provide discretionary financial incentives.
• It is not possible to accurately predict the value of incentives any jurisdiction will ultimately provide, without entering into negotiations over a specific investment proposal.
While great care has been taken in performing this analysis and developing findings, the resulting comparisons are of a general nature. They should not be interpreted as a definitive or final opinion on the merits of locating any specific business in one jurisdiction over another. Further analysis is required, considering business costs and other factors, to determine the appropriate site for a specific business.
/s/ KPMG LLP
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Principal Authors
Robert Peters – KPMG LLP; Midwest Partner-in-Charge, State & Local Tax & Incentives Practice; Chicago, IL
James Greisch – KPMG LLP; Office Managing Partner, Nebraska Business Unit; Omaha, NE
Jean Bartman – KPMG LLP; Director, State & Local Tax; Omaha, NE
Russell Smith – KPMG LLP; Senior Associate, State & Local Tax; Omaha, NE
Shane Seibert – KPMG LLP; Associate, State & Local Tax; Omaha, NE
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Study EngagementKPMG’s charge for this analysis: $90,000
To determine how Nebraska compares with nine other states for business taxes and incentives
– Taxes and incentives were calculated for seven different business sectors:
• Start-up Technology-based Company
• Distribution Company
• Value Added Agriculture Company (Cheese Processor)
• Information Services Company
• Corporate Headquarters
• Small Manufacturer (Rural Area)
• Small Manufacturer (Urban Area)
To determine how Nebraska compares with nine other states for individuals
– Taxes were calculated for four different income levels:
• CEO
• Executive
• Manager
• Entry Level Employee
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Basis of Analysis
KPMG offers clients the scale, global reach, industry insights, and multidisciplinary range of services they demand. With over 17,000 professionals in 122 offices, including 1,500 partners in the United States alone, KPMG LLP is a leader among professional services firms.
– KPMG’s State and Local Tax network has a comprehensive network of more than 500 state and local tax professionals throughout the United States, supported by our Washington National Tax practice in Washington, D.C.
– Numerous state and local tax and incentives experts employed by KPMG LLP, in the various identified regions and with significantexpertise with the state and local tax and incentives issues affecting the various jurisdictions and identified taxpayers, participated in the development of the tax and incentive calculations.
Each of the case studies were based on KPMG’s experiences with companies in the selected industries.
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Comparison States
Nebraska’s Neighbors:
Colorado
Iowa
Kansas
Missouri
South Dakota
Wyoming
Other Frequent / Key Competitors:
Oklahoma
Minnesota
North Carolina
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Ranking of Factors that Influence Business Locations
1. State and local incentives
2. Labor costs
3. Availability of skilled labor
4. Highway accessibility
5. Occupancy or construction costs
6. Tax exemptions
7. Corporate tax rate
8. Energy availability and costs
9. Proximity to major markets
10. Availability of land
11. Availability of telecom services
12. Cost of land
13. Environmental regulations
14. Environmental regulations
15. Low union profile
16. Availability of broadband telecom services
17. Right-to-work state
18. Proximity to suppliers
19. Availability of long-term financing
20. Raw materials availability
21. Availability of unskilled labor
22. Accessibility to major airport
23. Training programs
24. Proximity to technical university
25. Railroad service
26. Waterway or oceanport accessibility
Source: Geraldine Gambale, “2003 Corporate Survey,” Area Development, December 2003
Summary: Though many factors are considered in business site selection, tax and incentive variables rate #1, #6, and #7 in a recent survey of corporate executives.
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Types of State and Local Incentives
Direct financial incentives
Loan and loan guarantees; revolving loan funds; industrial development bonds; grants; venture capital programs
Tax incentives
Tax exemptions or abatements; deductions or credits; accelerateddepreciation
Indirect financial incentives
Government tax incentives to private venture capital organizations; wage subsidies
Non-financial incentives
Job training programs; infrastructure improvements and grants; technical assistance
Special incentives
Enterprise zones; export promotion; land banking
Source: Del Birch, “Let’s Make a Deal,” Business Facilities, February 2002
Incentives may take both financial and non-financial forms, as noted to the right. This analysis only includes incentives resulting in a quantifiable financial outlay by state or local governments.
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State and Local Incentives Included in this Study
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State and Local Incentives Included in this Study:Nebraska
State Program Description/Eligibility Benefits
NEEmployment &
Investment Growth Act LB775
Non-refundable credit for qualified new investment and employment levels
Income Tax Credit, Sales Tax Credit
NE
Employment Expansion & Investment Incentive
Act LB 608
Refundable credit for qualified new investment and employment levels in counties of less than
25,000 inhabitants
Income Tax Credit, Sales Tax Credit
NE Job Training Funds Training assistance on projects that offer an opportunity for economic development
Variable Funding
NECommunity
Development Block Grant
Grants and special financing for approved economic development projects Variable Funding
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Colorado
State Program Description/Eligibility BenefitsCO Hiring Grants Grants for hiring of new employees Variable Funding
CO New Business Facility EE Credit
Non-refundable credit for new business facility earned on new qualified employees
Income Tax Credit
CO EZ Investment Tax Credit
Credit for qualified investment property located in Enterprize Zone
Income Tax Credit
CO Health Care Credit Non-refundable credit for new employees insured under company health plan
Income Tax Credit
CO Training Grants Grants for training employees of new or expanding companies
Variable Funding
CO EZ Job Training Credit Credit for percentage of training costs incurred in Enterprize Zone
Income Tax Credit
CO Property Tax Abatement Credit for personal property which reflects determination methods of County Assessor
Property Tax Exemption
CO EZ R and D CreditEnterprize Zone credit for current expenditures
over average of prior years expenditures Income Tax Credit
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Iowa
State Program Description/Eligibility Benefits
IA New Jobs Credit Non-refundable credit for increase of workforce by at least 10% within the state
Income Tax Credit
IA EZ Investment Tax Credit
Credit for qualifying capital expenditures in enterprize zone
Income Tax Credit
IA NCIP Investment Tax Credit
Credit for qualifying capital expenditures dependant upon number of new jobs
Income Tax Credit
IA NJIP Investment Tax Credit
Credit for qualifying capital expenditures by businesses meeting specific requirements
Income Tax Credit
IA CEBA Low Interest & Forgivable Loans
Funding for businesses creating high quality jobs and new capital investment
Variable Funding
IAEZ Sales Tax Refund on
Tax Paid During Construction
Refund of state sales, service, and use tax paid to contractors during construction phase in
enterprize zoneSales Tax Refund
IANCIP Sales Tax Refund
on Tax Paid During Construction
Refund of state sales, service, and use tax paid to contractors during construction phase by
qualified businessesSales Tax Refund
IA Withholding Credit for Training
Diversion of withholding tax to establish new employee job training
Withholding Tax Credit
IA EZ Withholding Credit for Training
Diversion of withholding tax to establish new employee job training in an enterprize zone
Withholding Tax Credit
IANJIP Withholding Credit
for Training
Diversion of withholding tax to establish new employee job training for businesses meeting
specific requirementsWithholding Tax Credit
IAEZ Property Tax
AbatementCommunity determined property tax abatement
for businesses located in enterprize zone Property Tax Exemption
IANJIP Property Tax
AbatementCommunity determined property tax abatement for businesses meeting specific requirements Property Tax Exemption
IA Research Activities Credit
Credit for qualified research and development expenditures
Income Tax Credit
IA EVA Low Interest & Forgivable Loans
Funding for businesses creating high quality jobs and new capital investment
Variable Funding
IANJIP Sales Tax Refund
on Tax Paid During Construction
Refund of sales, service, and use tax paid to contractors during construction phase by
qualified businessesSales Tax Refund
This list of incentives represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Kansas
State Program Description/Eligibility Benefits
KS Business and Job Development Credit
One-time, non-refundable credit for increase in employees and investment
Income Tax Credit
KS High Performance Incentive Program
Non-refundable credit for investment and training expenditures
Income Tax Credit, Sales Tax Exemptions
KS Project Exemption Exemption for purchases on specific projects Sales Tax Exemption
KS Economic Development Rider
Provided by utility companies based upon load requirements and/or load levels
Discounted Utility Charges
KS Kansas Industrial Training Program
Classroom and on-the-job training funds for specific companies
Training Incentives
KS IRB Property Tax Exemption
Exemption for property financed with Industrial Revenue Bonds
Property Tax Exemption
KSBusiness Machinery
and Equipment Property Tax Credit
Refundable credit regarding property taxes remitted on qualified business machinery and
equipmentIncome Tax Credit
KSResearch and
Development Credit
Non-refundable credit of percentage of expenditure difference between current year
and three year averageIncome Tax Credit
KSKansas Economic
Opportunity Initiatives Fund
Grants and forgivable loans based upon project size and community support Variable Funding
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Minnesota
State Program Description/Eligibility Benefits
MN Rural Job Creation Grant
Grants for creating at least ten jobs outside of the seven county metro area
Variable Funding
MN JOBZ Benefits Refundable credits for increased employment and investment in JOBZ zone
Income Tax, Sales Tax, Property Tax
MN TIF Exemption Property tax rebate through tax increment financing upon specific conditions
Property Tax
MN R and D Credit Non-refundable credit for research and development performed in Minnesota
Income Tax Credit
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Missouri
State Program Description/Eligibility Benefits
MO New Business Facility Tax Credits
Investment and new job credits for qualifying projects of new or expanding facilities
Income Tax Credit
MOEnterprise Zone
Program Credits for new investment in enterprize zonesIncome Tax Credit, Income Exemption, Property Tax
Exemption
MO Economic Development Rider
Utility company provided benefit based upon load requirements and/or demand levels
Discounted Utility Charges
MO New Jobs Training Program
Qualifying businesses receive funds to offset training costs of new employees
Training Incentive
MOSkills Development
Program
Non-refundable credit earned by entities in distressed areas for classroom training and
costsIncome Tax Credit
MOQualified Research
Expenses Tax Credit
Qualified research expenses earn credits based upon qualified expenses and limited by prior
years expendituresIncome Tax Credit
MO Chapter 100 Program Locality provided incentives via revenue bond proceeds
Property Tax Abatement, Sales Tax Abatement
MO Customized Training Program
Funding to qualifying businesses to reduce training costs, limited to actual costs
Training Incentive
MO Chapter 353 Property Tax Exemption
Property tax abatement for redevelopment in blighted areas
Property Tax Exemption
MO "BUILD" CreditsRefundable credits for eligible expansion,
relating to debt service payments for industrial revenue bonds issued
Income Tax Credit
MO Development Tax Credits
Credits to eligible donors who make contributions to a non-profit corporation
Income Tax Credit
This list of incentives represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: North Carolina
State Program Description/Eligibility Benefits
NC Job Development Investment Grant
Funding received by qualified businesses for increased levels of new employees
Variable Funding
NC Creating Jobs Credit Credits to eligible businesses creating new full-time jobs meeting minimum standards
Income Tax Credit
NCMachinery and
Equipment CreditCredits for increased machinery and equipment
investment over applicable thresholds Income Tax Credit
NC Training Credit Credit for wages earned by five or more eligible employees during worker training
Income Tax Credit
NCSales Tax Refund on
Machinery and Equipment
Sales and use tax refund for certain purchases in particular enterprise tier areas Sales Tax Refund
NC R and D Credit Credit for increased research activities using State's apportioned share formula
Income Tax Credit
NC Central Office Credit Credit for minimum new employees in conjunction with use of new central office
Income Tax Credit
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Oklahoma
State Program Description/Eligibility Benefits
OKOklahoma Quality Jobs
Program
Funding received by specific businesses meeting payroll minimums and offering
particular benefitsVariable Funding
OK Training for Industry Program
Assistance to qualifying businesses to train new employees at qualifying training centers
Training Incentive
OK Small Employer Quality Jobs Incentive Act
Qualifying businesses receive funding for meeting certain levels and thresholds
Variable Funding
OKInvestment / New Jobs
Credit
Non-refundable credit for increased investment or new jobs, with certain thresholds and
requirementsIncome Tax Credit
OKLocal Abatement - Incentive District / Enterprise Zone
Incentive Districts created by authorized locality for tax exemption purposes Property Tax Abatement
OK Freeport Inventory Exemption
Specific goods or merchandise held in-state for less than 9 months are exempted from tax
Property Tax Abatement
OK Investment / New Jobs Credit (Enterprise Zone)
Non-refundable credit for minimum investment in enterprize zone
Income Tax Credit
OK Sales Tax Refund on Construction Materials
Refund for minimum levels of new investment and jobs
Sales Tax Refund
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: South Dakota
State Program Description/Eligibility Benefits
SD Workforce Development Program
Limited state funds to reimburse qualified employee training expenses
Training Incentive
SD Property Tax Abatement Incentives provided by specific county for qualified new investment
Property Tax Abatement
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
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State and Local Incentives Included in this Study: Wyoming
The above list represents incentives that were applicable and quantifiable for the seven different businesses included in the study. This list is not intended to be an all-inclusive list of incentive programs available in the state.
State Program Description/Eligibility BenefitsWY none none none
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Case Study Tax and Incentive Comparisons
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Business Case Studies
Types of Businesses Analyzed:Start-up Technology-based CompanyDistribution CompanyValue Added Agriculture Company (Cheese Processor)Information Services CompanyCorporate HeadquartersSmall Manufacturer (Rural Area)Small Manufacturer (Urban Area)
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Business Case Studies
Business Taxes Included in this Analysis:Income TaxFranchise TaxSales/Use TaxProperty TaxUnemployment Insurance
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Start-up Technology-based Company
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Start-up Technology-based CompanyBasic Assumptions
Start-up manufacturer of biotechnology tools for use in genetics research.
C corporation.
The company will initially have seven employees during 2004, with an increase to 107 by 2010.
The company will invest approximately $8 million in fixed assets during 2004, with additional investment of $16 million through 2010.
As a company with significant start-up costs, the company will not be profitable for several years.
The company will have gross sales of $2 million during 2004, none of which are in-state sales.
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Start-up Technology-based CompanyState Rankings (1=Highest, 10=Lowest)
Minnesota
Kansas
Missouri
North Carolina
Oklahoma
Nebraska
Iowa
Wyoming
Colorado
South Dakota
Total Taxes After Credits, Refunds,
& Abatements
(1 year)
Minnesota10
9
8
7
6
5
4
3
2
1
Rank
North Carolina
Iowa
Missouri
Oklahoma
Kansas
Wyoming
Colorado
South Dakota
Nebraska
Total Taxes Before Credits, Refunds, &
Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
South Dakota
Colorado
Oklahoma
Iowa
North Carolina
Nebraska
Minnesota
Missouri
Kansas
Incentives Utilized
(over 7 years)
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Start-up Technology-based Company
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 5,330 - - 1,348 - 2,747 12,375 1,250 - 1,650
Unemployment Insurance 1,715 1,344 1,427 1,562 1,510 1,843 1,337 819 931 2,126
Income Tax - - - - 300 - - - - -
Property Tax 147,157 175,088 133,282 210,621 127,500 151,507 52,567 156,646 66,035 65,728
Sales Tax 598,325 411,144 246,103 236,225 129,025 236,225 260,976 283,823 630,057 440,389
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Start-up Technology-based Company
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 5,330 - - 1,348 - 2,747 6,188 1,250 - 1,650
Unemployment Insurance 1,715 1,344 1,427 1,562 1,510 1,843 1,337 819 931 2,126
Income Tax - - - - - - - - - -
Property Tax 147,157 146,530 133,282 - - - 52,567 - - 65,728
Sales Tax 137,725 411,144 246,103 131,069 - 130,231 190,976 283,823 630,057 440,389
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Start-up Technology-based Company
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
$
2004-2010 Credits & Incentives
Maximum Incentives 2,652,417 688,659 1,584,224 4,306,151 3,563,858 3,702,780 1,601,129 1,240,292 240,696 -
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina Oklahoma South Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.). The Nebraska total includes LB775 credits used, rather than credits earned. See the following page for credits earned.
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Start-up Technology-based CompanyNebraska Tax Credit Usage - 2004-2010
2,013,083
821,917
Total Credits Not Used Total Credits Used
This chart reflects LB775 credits earned versus actually used over a seven-year period.
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Distribution Company
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Distribution Company Basic Assumptions
C corporation headquartered out of state.
The calculations have been modeled under the assumption that thecompany will open a distribution warehouse “in-state” during 2004, and that it previously had no “in-state” locations.
The company will initially have 70 employees during 2004.
The company will invest approximately $2.7 million in fixed assets during 2004, with additional investment of $6.5 million through 2010.
The company will have $1,035,000 federal taxable income in 2004.
The company will have gross sales of $90 million during 2004, of which $7 million are in-state.
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Distribution CompanyState Rankings (1=Highest, 10=Lowest)
Minnesota
Kansas
North Carolina
Nebraska
Iowa
Wyoming
South Dakota
Oklahoma
Missouri
Colorado
Total Taxes After Credits, Refunds,
& Abatements
(1 year)
Wyoming10
9
8
7
6
5
4
3
2
1
Rank
South Dakota
Iowa
North Carolina
Minnesota
Missouri
Nebraska
Colorado
Kansas
Oklahoma
Total Taxes Before Credits, Refunds,
& Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
South Dakota
Colorado
Kansas
Nebraska
Missouri
Minnesota
Iowa
North Carolina
Oklahoma
Incentives Utilized
(over 7 years)
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Distribution Company
-
50,000
100,000
150,000
200,000
250,000
300,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 240 - - 240 - - 5,490 168 - 732
Unemployment Insurance 17,150 13,440 14,273 15,624 30,200 18,428 13,370 8,190 9,310 12,800
Income Tax 5,172 3,159 4,845 7,071 10,402 3,421 7,574 7,140 - -
Property Tax 40,827 49,699 35,658 60,144 39,738 43,059 14,921 63,977 21,804 7,248
Sales Tax 163,555 167,094 137,655 157,216 137,283 155,490 159,813 186,820 144,020 120,150
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Distribution Company
-
50,000
100,000
150,000
200,000
250,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 240 - - 240 - - 2,745 168 - 732
Unemployment Insurance 17,150 13,440 14,273 15,624 30,200 18,428 13,370 8,190 9,310 12,800
Income Tax 5,172 - - - - - 3,787 7,140 - -
Property Tax 40,827 42,065 - - - 35,379 14,921 - 3,148 7,248
Sales Tax 40,355 167,094 109,655 37,152 - 155,490 39,063 186,820 144,020 120,150
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Distribution Company
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
$
2004-2010 Credits & Incentives
Maximum Incentives 977,318 288,494 1,376,887 800,005 1,240,550 1,214,418 2,009,297 2,107,369 105,988 -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina Oklahoma South
Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.). The Nebraska total includes LB775 credits used, rather than credits earned. See the following page for credits earned.
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Distribution Company
Nebraska Tax Credit Usage - 2004-2010
1,093,616
219,084
Total Credits Not Used Total Credits Used
This chart reflects LB775 credits earned versus actually used over a seven-year period.
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Value-Added Agriculture Company(Cheese Processor)
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Value-Added Ag Company (Cheese Processor)Basic Assumptions
C corporation headquartered out of state.
The company will initially have 160 employees during 2004, with an increase to 360 by 2010.
The company will invest approximately $16.8 million in fixed assets during 2004, with additional investment of $38.3 million through 2010.
The company will have $50,000,000 federal taxable income in 2004.
The company will have gross sales of $765 million during 2004, of which $50 million are in-state.
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Value-Added Ag Company (Cheese Processor)State Rankings (1=Highest, 10=Lowest)
Minnesota
Kansas
Iowa
Nebraska
Oklahoma
Missouri
North Carolina
Wyoming
South Dakota
Colorado
Total Taxes After Credits,
Refunds, & Abatements
(1 year)
Missouri10
9
8
7
6
5
4
3
2
1
Rank
Minnesota
Iowa
Oklahoma
North Carolina
Kansas
Wyoming
South Dakota
Colorado
Nebraska
Total Taxes Before Credits,
Refunds, & Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
South Dakota
Colorado
Missouri
North Carolina
Minnesota
Oklahoma
Iowa
Nebraska
Kansas
Incentives Utilized
(over 7 years)
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Value-Added Ag Company (Cheese Processor)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 730 0 0 100 0 0 27,713 141 0 3,695
Unemployment Insurance 39,200 30,720 32,623 35,712 60,400 42,120 30,560 18,720 21,280 69,197
Income Tax 254,047 101,920 315,943 163,356 283,260 82,609 173,710 134,736 0 0
Property Tax 300,829 367,031 125,766 424,054 131,750 313,643 110,194 357,091 80,119 25,647
Sales Tax 1,182,615 823,960 274,453 290,830 257,665 257,665 533,741 309,583 961,377 847,986
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Value-Added Ag Company (Cheese Processor)
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 730 0 0 100 0 0 13,856 141 0 3,695
Unemployment Insurance 39,200 30,720 32,623 35,712 60,400 42,120 30,560 18,720 21,280 69,197
Income Tax 0 0 0 0 0 (33,333) 86,855 134,736 0 0
Property Tax 82,459 289,134 0 0 0 286,763 110,194 0 7,753 25,647
Sales Tax 119,525 823,960 176,453 44,471 0 257,665 358,741 309,583 961,377 847,986
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Value-Added Ag Company (Cheese Processor)
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
$
2004-2010 Credits & Incentives
Maximum Incentives 8,743,096 1,411,399 7,346,863 8,842,338 5,626,981 4,941,046 5,297,575 5,792,173 396,083 -
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina Oklahoma South Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.). The Nebraska total includes LB775 credits used, rather than credits earned. See the following page for credits earned.
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Value-Added Ag Company (Cheese Processor)
Nebraska Tax Credit Usage - 2004-2010
4,711,083
2,639,417
Total Credits Not Used Total Credits Used
This chart reflects LB775 credits earned versus actually used over a seven-year period.
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Information Services CompanyBasic Assumptions
C corporation headquartered out of state.
The company will initially have 250 employees during 2004, with an increase to 370 by 2010.
The company will invest approximately $9.8 million in fixed assets during 2004, with additional investment of $23.2 million through 2010.
The company will have $6,000,000 federal taxable income in 2004.
The company will have gross sales of $290 million during 2004, of which $7 million are to in-state customers.
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Information Services Company
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Information Services CompanyState Rankings (1=Highest, 10=Lowest)
Kansas
Minnesota
Nebraska
North Carolina
Iowa
Wyoming
South Dakota
Oklahoma
Missouri
Colorado
Total Taxes After Credits,
Refunds, & Abatements
(1 year)
Iowa10
9
8
7
6
5
4
3
2
1
Rank
Wyoming
South Dakota
North Carolina
Minnesota
Missouri
Oklahoma
Kansas
Nebraska
Colorado
Total Taxes Before Credits,
Refunds, & Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
South Dakota
Colorado
Iowa
Nebraska
Missouri
Oklahoma
Minnesota
Kansas
North Carolina
Incentives Utilized
(over 7 years)
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46
Information Services Company
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 480 - - 86 0 0 14,700 144 0 1,960
Unemployment Insurance 61,250 48,000 50,974 55,800 90,600 65,813 47,750 29,250 33,250 45,713
Income Tax 23,090 12,515 9,504 14,617 19,285 6,246 19,929 13,304 0 0
Property Tax 170,357 213,150 67,627 209,228 76,500 167,047 63,994 78,289 45,018 12,355
Sales Tax 637,000 654,834 282,660 609,700 609,064 609,332 633,893 732,107 510,974 468,650
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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47
Information Services Company
(100,000)
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 480 - - 86 0 0 7,350 144 0 1,960
Unemployment Insurance 61,250 48,000 50,974 55,800 90,600 65,813 47,750 29,250 33,250 45,713
Income Tax - - 9,504 0 0 (33,333) 9,965 13,304 0 0
Property Tax 170,357 167,910 67,627 0 0 152,647 63,994 0 7,503 12,355
Sales Tax 19,600 654,834 282,660 18,760 0 609,332 248,893 732,107 510,974 468,650
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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48
Information Services Company
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
$
2004-2010 Credits & Incentives
Maximum Incentives 3,088,357 1,000,027 1,218,540 5,399,204 4,752,637 3,728,843 8,045,548 4,333,720 251,240 -
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina Oklahoma South Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.). The Nebraska total includes LB775 credits used, rather than credits earned. See the following page for credits earned.
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49
Information Services CompanyNebraska Tax Credit Usage - 2004-2010
5,556,210
439,457
Total Credits Not Used Total Credits Used
This chart reflects LB775 credits earned versus actually used over a seven-year period.
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50
Corporate Headquarters
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Corporate Headquarters Basic Assumptions
This company is a manufacturer of machinery and equipment.
The company is a C corporation with manufacturing operations worldwide.
The calculations have been modeled under the assumption that thecompany will move its corporate headquarters “in-state” during 2004, and that it previously had no “in-state” locations.
The company will have a manufacturing facility on-site at the headquarters location.
The company will initially have 1,700 employees during 2004, with an increase to 1,862 by 2010.
The company will invest approximately $158.7 million in fixed assets during 2004, with additional investment of $66.3 million through 2010.
The company will have $130,000,000 federal taxable income in 2004.
The company will have gross sales of $1.41 billion during 2004, of which $206 million are in-state sales.
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52
Corporate HeadquartersState Rankings (1=Highest, 10=Lowest)
Minnesota
Missouri
Kansas
Iowa
Nebraska
Oklahoma
North Carolina
Wyoming
South Dakota
Colorado
Total Taxes After Credits,
Refunds, & Abatements
(1 year)
Wyoming10
9
8
7
6
5
4
3
2
1
Rank
Missouri
Iowa
North Carolina
Minnesota
Oklahoma
South Dakota
Kansas
Colorado
Nebraska
Total Taxes Before Credits,
Refunds, & Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
South Dakota
Colorado
Nebraska
North Carolina
Missouri
Minnesota
Oklahoma
Kansas
Iowa
Incentives Utilized
(over 7 years)
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Corporate Headquarters
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 17,330 - 399 - 21,732 290,700 317 - 38,760
Unemployment Insurance 416,500 326,400 346,622 379,440 755,000 447,525 324,700 198,900 226,100 516,273
Income Tax 1,581,584 1,154,872 2,292,976 2,216,149 2,051,057 935,173 1,754,906 1,798,395 - -
Property Tax 2,881,901 3,451,725 2,758,928 3,904,538 2,639,250 2,840,955 1,036,311 2,835,813 1,366,915 418,865
Sales Tax 9,752,855 8,172,738 4,346,055 5,298,796 4,591,946 4,960,446 6,412,521 5,959,938 9,568,818 7,204,155
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Corporate Headquarters
(2,000,000)
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 17,330 - 399 300,938 21,732 - 317 - 38,760
Unemployment Insurance 416,500 326,400 346,622 379,440 755,000 447,525 324,700 198,900 226,100 516,273
Income Tax - - (326,219) - - (200,000) 1,050,986 1,798,395 - -
Property Tax 2,881,901 2,905,452 - - - - 1,036,311 - 46,224 418,865
Sales Tax 1,146,075 8,172,738 2,246,055 735,828 - 706,515 5,572,521 5,959,938 9,568,818 7,204,155
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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55
Corporate Headquarters
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.). The Nebraska total includes LB775 credits used, rather than credits earned. See the following page for credits earned.
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
$
2004-2010 Credits & Incentives
Maximum 33,203,007 10,176,622 60,662,957 52,765,738 42,874,906 42,145,340 38,257,620 49,936,449 4,633,088 0
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina Oklahoma South Dakota Wyoming
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Corporate Headquarters
This chart reflects LB775 credits earned versus actually used over a seven-year period.
Nebraska Tax Credit Usage - 2004-2010
23,385,911
17,078,613
Total Credits Not Used Total Credits Used
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57
Small Manufacturer (Rural Area)
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58
Small Manufacturer (Rural Area) Basic Assumptions
Family owned small manufacturer.
Non-metropolitan location (for Nebraska calculation purposes)
S corporation owned by four individuals.
The company will initially have 12 employees during 2004, with an increase to 18 by 2010.
The company will invest approximately $2.5 million in fixed assets during 2004, with additional investment of $1 million through 2010.
The company will have gross sales of $5 million during 2004, of which $2.5 million are in-state sales.
$615,000 federal income, net of state taxes.
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59
Small Manufacturer (Rural Area) State Rankings (1=Highest, 10=Lowest)
Minnesota
Nebraska
Kansas
Iowa
Missouri
Wyoming
Oklahoma
South Dakota
North Carolina
Colorado
Total Taxes After Credits, Refunds, & Abatements
(1 year)
Wyoming10
9
8
7
6
5
4
3
2
1
Rank
North Carolina
Oklahoma
Missouri
South Dakota
Iowa
Kansas
Minnesota
Colorado
Nebraska
Total Taxes Before Credits,
Refunds, & Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
Colorado
South Dakota
North Carolina
Oklahoma
Nebraska
Missouri
Kansas
Minnesota
Iowa
Incentives Utilized
(over 7 years)
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60
Small Manufacturer (Rural Area)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 1,330 - - 1,682 - 936 4,217 1,250 - 562
Unemployment Insurance 2,940 2,304 2,447 2,678 6,040 3,159 2,292 1,404 1,596 3,644
Income Tax 21,041 22,285 27,624 30,313 20,473 27,500 41,563 33,050 - -
Property Tax 47,779 54,625 71,093 69,449 79,475 47,786 16,400 26,564 43,850 20,362
Sales Tax 115,675 107,071 77,543 75,090 74,199 74,253 81,448 89,214 128,786 86,005
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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61
Small Manufacturer (Rural Area)
(200,000)
(150,000)
(100,000)
(50,000)
-
50,000
100,000
150,000
200,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 1,330 - - 1,682 - 936 4,217 1,250 - 562
Unemployment Insurance 2,940 2,304 2,447 2,678 6,040 3,159 2,292 1,404 1,596 3,644
Income Tax (157,959) - - - (40,000) - 29,563 21,050 - -
Property Tax 47,779 50,997 - - - 30,986 16,400 - 2,814 20,362
Sales Tax 115,675 107,071 16,293 7,102 - 74,253 81,448 89,214 128,786 86,005
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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62
Small Manufacturer (Rural Area)
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
$
2004-2010 Credits & Incentives
Maximum Incentives 458,250 66,265 1,041,174 937,712 987,763 561,050 291,418 327,730 116,582 -
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina Oklahoma South Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.).
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63
Small Manufacturer (Urban Area)
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Small Manufacturer (Urban)Basic Assumptions
Family owned small manufacturer.
Metropolitan location (for Nebraska calculation purposes)
S corporation owned by four individuals.
The company will initially have 12 employees during 2004, with an increase to 18 by 2010.
The company will invest approximately $2.5 million in fixed assets during 2004, with additional investment of $1 million through 2010.
The company will have gross sales of $5 million during 2004, of which $2.5 million are in-state sales.
$615,000 federal income, net of state taxes.
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65
Small Manufacturer (Urban)State Rankings (1=Highest, 10=Lowest)
Minnesota
Kansas
Iowa
Missouri
Wyoming
Oklahoma
South Dakota
North Carolina
Colorado
Nebraska
Total Taxes After Credits, Refunds, & Abatements
(1 year)
Wyoming10
9
8
7
6
5
4
3
2
1
Rank
North Carolina
Oklahoma
Missouri
South Dakota
Iowa
Kansas
Minnesota
Colorado
Nebraska
Total Taxes Before Credits,
Refunds, & Abatements
(1 year)
Total taxes represents the sum of income/franchise tax, sales/use tax, property tax, and unemployment insurance
Wyoming
Colorado
South Dakota
Nebraska
North Carolina
Oklahoma
Missouri
Kansas
Minnesota
Iowa
Incentives Utilized
(over 7 years)
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66
Small Manufacturer (Urban)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
$
2004 Total Taxes Before Credits, Refunds, & Abatements
Franchise Tax 1,330 - - 1,682 - 936 4,217 1,250 - 562
Unemployment Insurance 2,940 2,304 2,447 2,678 6,040 3,159 2,292 1,404 1,596 3,644
Income Tax 21,041 22,285 27,624 30,313 20,473 27,500 41,563 33,050 - -
Property Tax 47,779 54,625 71,093 69,449 79,475 47,786 16,400 26,564 43,850 20,362
Sales Tax 115,675 107,071 77,543 75,090 74,199 74,253 81,448 89,214 128,786 86,005
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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67
Small Manufacturer (Urban)
(50,000)
-
50,000
100,000
150,000
200,000
$
2004 Total Taxes After Credits, Refunds, & Abatements
Franchise Tax 1,330 - - 1,682 - 936 4,217 1,250 - 562
Unemployment Insurance 2,940 2,304 2,447 2,678 6,040 3,159 2,292 1,404 1,596 3,644
Income Tax 21,041 - - - (40,000) - 29,563 21,050 - -
Property Tax 47,779 50,997 - - - 30,986 16,400 - 2,814 20,362
Sales Tax 115,675 107,071 16,293 7,102 - 74,253 81,448 89,214 128,786 86,005
Nebraska Colorado Iow a Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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68
Small Manufacturer (Urban)
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
$
2004-2010 Credits & Incentives
Maximum Incentives 268,000 66,265 1,041,174 937,712 987,763 561,050 291,418 327,730 116,582 -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina Oklahoma South
Dakota Wyoming
This graph includes tax credits and incentives, as well as non-tax credits and incentives (I.e. grants, training funds, etc.).
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Recent Case Studies
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Recent Case Studies in State & Local Incentives
Iowa
Wells Fargo Home Mortgage and Consumer Credit Group
– 5,300 jobs, $33,500 average salary
– $118 million expansion
– $56.5 million state and local incentive package
• $28 million in periodic cash grants, dependent on job creation
• $25.9 million for road, water, and sewer improvements
– $627 million projected 10-year local-area economic impact
Integrated DNA Technologies (synthetic DNA manufacturer)
– 200 new jobs
– $52 million plant expansion
– State and local incentives:
• $1.76 million potentially forgivable loans
• Various tax incentives and abatements
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Recent Case Studies in State & Local Incentives
Missouri
Bayer Corp. (pharmaceuticals)
– 140 new jobs, $70,000 average salary
– $200 million plant (potential additional $1 billion expansion over 5 years)
– $44.2 million state and local incentives
• $37.2 million provided locally through Chapter 100 bonds
» Facility will be owned by Kansas City and lease back to Bayer
» Bayer will pay only about 1/3 of normal sales taxes and property taxes until bonds are repaid (about 20 years)
• $7 million from the State of Missouri
» Fund employee training
» Provide subsidies for low-interest loans
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Recent Case Studies in State & Local Incentives
Kansas
Goodyear
– 0 new jobs, maintenance of 1,700 jobs ($100 million payroll)
– $120 million investment in aging plant
– $20 million state and local incentive package
• Includes locally approved property tax exemptions on new machinery and equipment
• $10 million bonds will be issued for every $50 million in investment
» Bonds to be paid off over 15 years from withholding taxes
Target
– 650 new jobs
– $80 million investment in 1.3 million sq. ft. distribution center
– $18 million city and county incentive package
• Includes 143 acres of land
– State incentives
• Training; tax credits for job creation and capital investment; sales tax exemptions
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Recent Case Studies in State & Local Incentives
North Carolina
Merck & Co. (pharmaceuticals)
– 300 jobs, $55,000 average salary
– $300 million, 250,000 sq. ft. vaccine plant
– $36 million state and local incentive package
• $24 million to buy and prepare the plant site
• $4.7 million sales tax rebate on construction materials
• $3.7 million, 10-year cash grant
R.H. Donnelley (headquarters consolidation)
– 275 jobs, initial average salary of $70,000
– $4.3 million state and local incentives package
• Will cover 65% of employment taxes for each job in the state
• Aid over 10 years, depending upon performance targets
– Projected $325 million increase in cumulative gross state product
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Personal Tax Comparisons
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The Impact of Personal Taxes on Business Location Decisions
Have an important personal impact to decision makers
Impact employee transfers and relocations
High personal taxes hamper employee recruitment
Entry Level Employee - $22,420 annual income (two income family)
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The Impact of Personal Taxes on Business Location Decisions
Types of Personal Taxes Evaluated
Individual Income Tax
Real Property (Real Estate) Tax
Personal Property Tax on Automobiles
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The Impact of Personal Taxes on Business Location Decisions
Four Income Levels of Individuals Analyzed:
Entry Level Employee - $22,420 annual income (two income family)
Manager - $46,010 annual income (two income family)
Executive - $82,870 annual income (single income family)
CEO - $200,000 annual income (single income family)
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Personal Tax ComparisonsState Rankings (1=Highest, 10=Lowest)
Wyoming
South Dakota
Colorado
Missouri
Nebraska
Kansas
North Carolina
Oklahoma
Minnesota
Iowa
Entry Level Employee
Wyoming
South Dakota
Colorado
Kansas
Oklahoma
Missouri
North Carolina
Nebraska
Iowa
Minnesota
CEO
WyomingWyoming10
9
8
7
6
5
4
3
2
1
Rank
South DakotaSouth Dakota
ColoradoColorado
MissouriMissouri
North CarolinaNorth Carolina
OklahomaKansas
KansasOklahoma
NebraskaNebraska
MinnesotaMinnesota
IowaIowa
ExecutiveManager
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79
Personal Tax Comparisons
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
$
Total Income & Property TaxEntry Level Employee
Property Tax 1,945 670 2,053 1,881 1,959 1,470 1,140 1,246 1,464 897
Income Tax 1,185 1,340 2,079 1,321 1,557 1,414 2,156 2,074 - -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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80
Personal Tax Comparisons
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
$
Total Income & Property TaxManager
Property Tax 4,097 1,517 4,453 3,498 4,437 3,194 2,407 2,720 2,898 1,986
Income Tax 2,806 2,552 3,833 2,958 3,402 2,748 3,988 3,815 - -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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81
Personal Tax Comparisons
-
2,000
4,000
6,000
8,000
10,000
12,000
$
Total Income & Property TaxExecutive
Property Tax 6,963 2,597 7,518 5,698 7,320 5,418 4,065 4,405 4,770 3,224
Income Tax 3,617 3,101 4,434 3,723 4,238 3,190 4,818 4,603 - -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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82
Personal Tax Comparisons
-
5,000
10,000
15,000
20,000
25,000
30,000
$
Total Income & Property TaxCEO
Property Tax 13,570 5,292 14,934 7,908 14,286 10,585 8,001 8,619 9,468 6,375
Income Tax 12,044 8,524 11,633 11,200 12,840 9,840 13,657 11,314 - -
Nebraska Colorado Iowa Kansas Minnesota Missouri North Carolina
Oklahoma South Dakota
Wyoming
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Conclusions
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84
Conclusions: Business Taxes and Incentives
Taxes and incentives are a major consideration in attracting businesses
Competition for business remains high despite state budget issues
Cash and discretionary incentives have considerable value to businesses
Businesses often favor near-term incentives over long-term incentives
The administrative and reporting requirements necessary to obtain Nebraska incentives are burdensome
Without incentives, Nebraska is not competitive with other surrounding states
The lack of a manufacturing machinery and equipment sales tax exemption puts Nebraska manufacturers at a competitive disadvantage
Most surrounding states allow local communities to negotiate property tax abatements, while Nebraska does not
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Conclusions: Individual Taxes
Nebraska’s individual tax burden is high
Nebraska’s tax burden ranks best for entry level employees
Tax burden will impact ability to recruit necessary managerial and technical employees
Nebraska has a relatively high level of taxation on key decision makers (CEO’s)
Key decision makers will consider personal financial impact whenmaking business location decisions
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Recommended Next Steps
Initiate a statewide discussion
Create a broad coalition interested in Nebraska’s future (business, agriculture, education, elected officials, and citizens)
Build a vision for Nebraska’s future
Develop strategies to achieve Nebraska’s vision
Develop and implement policies and programs to implement these strategies and realize the vision
© 2004 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A.