77-5538.

Tax credit; recapture or disallowance; interest and penalties.

(1) If the company fails to utilize a project in a qualified business at or above the required levels of employment and investment required in the Invest Nebraska Act for the entire entitlement period, a portion of the wage benefit credit or investment tax credit shall be recaptured directly by the state from the company or shall be disallowed. In no event shall any wage benefit credit be required to be paid back directly or indirectly by the employees, but instead shall be paid by the company.

(2) In the case of a company which has failed to maintain the project at the required levels of employment and investment for the entire entitlement period the recapture or disallowance shall be as follows: (a) No wage benefit credits or investment tax credits shall be allowed to the company for the actual year or years in which the required levels of employment or investment were not maintained; (b) for wage benefit credits or investment tax credits used, one-tenth of the credits shall be recaptured from the company for each year the required levels of employment or investment were not maintained; and (c) as to wage benefits credits or investment tax credits remaining at the end of the entitlement period, one-tenth of the credits shall be disallowed to the company for each year the required levels of employment or investment were not maintained in previous years.

(3)(a) Any amounts required to be recaptured shall be deemed to be an underpayment of tax, shall be immediately due and payable, and shall constitute a lien on the assets of the company. When wage benefit credits or investment tax credits were received in more than one year, the credits received in the most recent year shall be recovered first and then the credits received in earlier years up to the extent of the required recapture.

(b) In the case of a company which has failed to maintain the project at the required levels of employment and investment for the entire entitlement period, interest accrues from the due date for the return on which the credits being recaptured were used.

(c) Penalties for underpayment of withholding or income tax, as appropriate, do not accrue unless repayment is not made within ninety days after the requirement for recapture or disallowance becomes known or should have become known to the company.

(4) The recapture or disallowance required by this section may be waived by the board if the board finds the failure to attain or maintain the required levels of employment or investment was caused by unavoidable circumstances such as an act of God or national emergency.

(5) When recapture occurs with regard to any partnership, limited liability company, subchapter S corporation, joint venture, cooperative, or estate or trust, the partnership, limited liability company, subchapter S corporation, joint venture, cooperative, or estate or trust shall be liable for payment of the required recapture.