Nebraska Tax Breaks Keep Paying After the Jobs Are Gone

The Nebraska Advantage Act is supposed to trade tax breaks for jobs and investment -- but nothing in the program checks whether the jobs and investment are still there once the state starts paying.▸ Nebraska's Auditor of Public Accounts⧉, the state's independently elected financial watchdog, found in a December 2025 management letter that companies have kept collecting incentive refunds after eliminating the very jobs the Act exists to protect: one company's Nebraska project was closed and its jobs cut by the business that acquired it, which then requested and received the refunds anyway; another's refunds now flow to a bankruptcy estate years after the company folded. Meanwhile, the Department of Revenue's own economic model⧉ projects the Act's net cost to the state's General Fund will grow from a $1.2 billion projected loss as of FY2025 to $2.4 billion by 2034.

State law declares the Act's purpose⧉ is to encourage new businesses to relocate to Nebraska, retain existing businesses, promote the creation and retention of quality jobs, and keep investment capital in the state.▸ Neb. Rev. Stat. § 77-5728 lets a company's earned tax credits transfer to whoever acquires its qualifying project -- but the statute never asks whether the acquirer keeps the project running. In one case the Auditor documented, the acquiring company closed the Nebraska project location and eliminated its jobs on acquisition, then requested and received the Act's refunds regardless.

In another case, the participating company declared bankruptcy years ago⧉ and shut its qualifying projects down over time; the State has continued paying refunds to the bankruptcy estate.▸ "Businesses will take the money and run," Auditor Mike Foley said⧉, "while the taxpayers are left holding the bag."

The Act refunds both state and local sales taxes, and when a local refund is owed, the Department of Revenue simply deducts it from the money it would otherwise send the municipality that levied the tax the following year -- the city or town has no vote in the matter.▸ One Nebraska municipality has had 100% of its local sales taxes abated since fiscal year 2023⧉, the year the State began deducting nearly $65 million in refunds tied to one company from its monthly distribution -- and the Auditor expects the impact to continue indefinitely, since the company keeps paying (and reclaiming) sales taxes under the same project. Statewide, $180,691,506 in local sales and use taxes have been redirected to participating companies since the Act began, with no dollar limit and, per the Auditor, no statutory mechanism letting a city plan for the hit before it lands.

Participating companies self-report 33,211 new jobs and $25.2 billion in capital investment created since the Act's 2006 inception -- but that data mostly goes unchecked.▸ A maintenance audit is the Department's only tool, besides the initial approval, to independently verify a company still employs the people and holds the investment it was paid for; the Auditor found 17 of 20 companies tested⧉ -- 85% -- had never had one. Some of those unaudited companies also waited over four years just to have their initial qualification confirmed.

Even taking the Department's own optimistic projections at face value, the math doesn't close: the Department's own model⧉ shows the credits and refunds paid out consistently outpacing the new economic activity they're meant to generate, a gap that compounds to a projected $2.4 billion net loss by 2034 -- against a backdrop where the Legislature entered its current session facing a $451 million budget deficit.▸ Asked to support limiting refunds once a company stops operating its project, the Department's response was that doing so "would require a legislative change" -- leaving the fix, for now, with lawmakers rather than regulators.