Auditor raises concerns about Nebraska business tax incentives totaling $1.2 billion in lost revenue

Press release

LINCOLN, Neb. — A report from the Nebraska State Auditor Mike Foley is raising concerns about the state’s business tax incentive programs, questioning whether companies are benefiting even after leaving the state.

In a management letter released Feb. 13, Foley said the Nebraska Advantage Act and its successor, the ImagiNE Nebraska Act, have resulted in nearly $1.2 billion in lost revenue over the past four fiscal years. The programs are intended to attract businesses and jobs to Nebraska.

Foley said current law allows companies to continue receiving tax incentive refunds even if a qualifying project is shut down or jobs are eliminated. In one example, a company acquired a project, closed its Nebraska location and eliminated jobs, but continued receiving millions of dollars in refunds. In another case, a bankrupt company’s estate continued to receive payments after its projects were eliminated.

The auditor also pointed to the impact on local governments. As of fiscal year 2025, more than $180 million in local sales and use taxes have been refunded to participating companies. One municipality has had all of its local sales tax revenue abated since fiscal year 2023 because of nearly $65 million in refunds.

Foley said $295 million in tax abatements in fiscal year 2025 amounts to about 10% of the state’s general fund balance and roughly 42% of its appropriations to the University of Nebraska for that year.

He called the situation unsustainable and urged lawmakers to strengthen the law and for the Department of Revenue to review its rules to ensure tax incentive programs are properly managed and protect taxpayers.