Livestock Modernization Act

Do you want to invest in a new livestock operation or expand your current one? You may qualify for a refundable income tax credit of up to $500,000. But you don’t want to wait to apply, as money will be awarded on a first come, first served basis. 

Background

In 2022, the amount of tax credits available each year under the Nebraska Advantage Rural Development Act increased from $1 million to $10 million. The maximum amount available for certain livestock modernization or expansion projects also increased from $150,000 per application to $500,000. 

Whether building a new barn, buying a new feeder, or installing state of the art smart technology, this is an opportunity to get a leg up in an industry that is constantly improving by modernizing operations and increasing capacity. This includes livestock housing, confinement, feeding, production, and waste management. The grant can be up to 10 percent of a total project estimated investment cost. The total investment cannot be less than $10,000, but an investment of up to $5,000,000 can be applicable. 

Projects must meet certain requirements for approval. Applications must be submitted by a single taxpayer or entity, who must estimate tax credits of investment and employment growth. If you have employees, you must be enrolled in E-verify, the federal electronic verification program used to confirm whether employees are authorized to work in the United States. 

You can submit multiple applications for multiple investment projects. November 1, 2023, is the final day to apply for the 2023 funding cycle. Currently, $2,545,294 has been allocated, so $7,454,706 remains for new applicants. 

Below are a few Questions and Answers about the Livestock Modernization Act 

What is the Livestock Modernization program? 

This program is a 10% refundable tax credit awarded to qualifying applicants who are modernizing or constructing new livestock facilities in Nebraska.  

What are the limitations of the credit?  

You must invest a minimum of $10,000 and will only receive the 10% credit on an investment up to $5,000,000. So, if you invest 5 million or more, you will receive $500,000 back on a qualifying project.  

What kind of projects qualify? 

These funds can only be used towards projects or facilities used in the production and husbandry of livestock. Such as; fencing, buildings, waterers, manure handling equipment, cattle working chutes, sun shades, fans, lighting, augers, feeding equipment, feed wagons, manure spreaders, etc.  

Are there limitations to the projects? 

These funds cannot be used to purchase multi-use machinery such as tractors, ATV’s or other pieces of equipment that are intended to be used in multiple roles on the farm. 

Is there a minimum investment level? 

Yes, a qualifying $10,000 investment is the minimum investment level. Anything less than that will not be eligible.  

How much of the investment do I need to obtain to qualify for the credit? 

At the time of your application, you will state the amount of funds you will spend on the project. This will then be proven when you submit your receipts to the Department of Revenue before they distribute your credit to you. 

How many times can I apply for the program? 

You can apply for the credit once per funding cycle. So, if you have multiple projects that are taking place within a funding cycle, those projects will go on the same application.  

How do I claim my credit? When will I receive the credit? 

You will need to work with the Department of Revenue to prove your expenses and complete the verification portion of the process to receive your credit. Be aware that this process takes some time to complete and may require you to amend your taxes for the year in which you make the investment.  

Is there a time when it is too late to apply for the program after a project is started? 

Be sure to apply for the credit by November 1 of the calendar year that you make the investment. Remember, these funds are competitive, so it is first come first served. The earlier you put your application in the better, these funds do run out, — so be sure to stake your claim to ensure you will be eligible for the funding. 

Are there any fees associated with the application? 

There is a $500 non-refundable application fee. 

Do you need to be pre-qualified before you start the project or buy the equipment? 

No, but you must submit your application as soon as possible upon purchasing or improving your facilities. You must submit the application in the year in which you make the investment and start your project. 

When do I need to submit my application? 

You need to submit the application in the year you make your investment and start your project. You can apply after your project is underway, but you need to do this prior to the conclusion of the application period. 

What is the deadline? 

The deadline to apply is November 1 of each funding year. The program runs through November 1 of the 2027 funding year.