Sales and Use Tax Exemption for Community Renewable Energy Projects

Program Overview

Implementing Sector State
Category Financial Incentive
State Nebraska
Incentive Type Sales Tax Incentive
Administrator Nebraska Department of Revenue
Start Date 10/01/2008
Eligible Renewable/Other Technologies Solar Photovoltaics, Wind (All), Biomass, Landfill Gas, Wind (Small)
Applicable Sectors Commercial, Construction, Investor-Owned Utility, Local Government, Nonprofit, Municipal Utilities, Residential, Cooperative Utilities, Tribal Government, Retail Supplier, Agricultural
Incentive Amount 100% exemption

Summary

Note: Enacted March 2015, L.B. 412 created the following requirement: “To the extent feasible, a C-BED project developer shall provide, in writing, notice of incentives pursuant to the Rural Community-Based Energy Development Act for local ownership and local participation in a C-BED project to each property owner on whose property a turbine will be located and to the elected governing body of each municipality or political subdivision in which a turbine will be located.”

In May 2007 Nebraska established an exemption from the sales and use tax imposed on the gross receipts from the sale, lease, or rental of personal property for use in a community-based energy development (C-BED) project. Nebraska also enacted the Rural Community-Based Energy Development Act (L.B. 629) to authorize and encourage electric utilities to enter into power purchase agreements with C-BED project developers.

To claim the exemption, filing requirements imposed by the Tax Commissioner must be met.

Eligible Projects

A C-BED project is defined as a new energy generation project using wind, solar, biomass, or landfill gas as the fuel source that has at least 25% of the gross power purchase agreement payments flowing to the qualified owner or owners or as payments to the local community and has a resolution of support adopted by the county board of each county in which the C-BED project is located or by the tribal council for a C-BED project located within the boundaries of an Indian reservation.

“Payments to the local community” include, but are not limited to, lease and easement payments part of a C-BED project; contract payments to Nebraska companies that meet specific statutory requirements for services, materials, equipment, and components necessary to permit or construct the C-BED project; other parts, materials, or components that are manufactured, assembled, or fabricated in Nebraska not included above.

Qualified Project Owners

A qualified C-BED project owner means:

  • a Nebraska resident;
  • a limited liability company that is organized under the Limited Liability Company Act and that is entirely made up of members who are Nebraska residents;
  • a Nebraska nonprofit corporation;
  • an electric supplier(s), subject to certain limitations for a single C-BED project;
  • a tribal council;
  • a domestic corporation domiciled in Nebraska; or
  • a cooperative corporation domiciled in Nebraska

Authorities

Name R.R.S. Neb. § 77-2704.57
Date Enacted 05/18/2007
Effective Date 10/01/2007 (subsequently amended)
Name R.R.S. Neb. § 70-1903, et seq.
Date Enacted 2007 (subsequently amended)
Name L.B. 412
Date Enacted 03/13/2015
Effective Date 08/29/2015

Contact

Taxpayer Assistance
Organization:
Nebraska Department of Revenue
Address:
Nebraska State Office Building
Lincoln, NE 68509-4818
Phone:
(800) 742-7474