The City of La Vista got a letter from the Nebraska Department of Revenue one day after drafting the City’s budget according to Omaha.com. Because of sales tax incentives, the City is expected to refund $2.4 million in sales tax refunds which is more than half of the sales tax revenues collected by the City of La Vista. Sales tax revenue makes up 17% of the City’s budget. The City of La Vista joins other Nebraska Cities who have been hit by companies requesting refunds due to company incentives to expand or locate their operations in Nebraska. Currently, there are two incentives programs in the State of Nebraska available to companies who are expanding or relocating to the State. These incentive programs are the Investment and Growth Act and the Nebraska Advantage Act.
The company incentives range from sales tax refunds to income tax credits. The biggest problem for Cities is that they have no way of knowing from one month to the next if they are going to be able to meet their budget with the way the State sends the local sales tax collections to the local cities. since 15 local La Vista companies have signed onto the incentive program.
A new State law would allow the Nebraska Cities to receive a year’s notice in advance of refunds being issued under the incentive programs. Agree or disagree, Cities and States use incentive programs to lure or keep companies located in their States and Cities. The question is, will taxpayers pay for the incentives in the long run.
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