Renewable Chemical Production Tax Credit Act

Tax credits under the Renewable Chemical Production Tax Credit Act are intended to stimulate the emerging biotechnology and bioproducts sector in Nebraska and incentivize the development of renewable chemicals.

To be eligible to receive tax credits for the production of renewable chemicals, a business must first apply to the Nebraska Department of Economic Development (“DED”) to be certified as an eligible business. To be certified as an eligible business, the applicant must: (i) produce at least one million pounds of renewable chemicals in Nebraska during the calendar year for which tax credits are sought, (ii) be physically located in Nebraska, (iii) have organized, expanded, or located in Nebraska on or after January 1, 2021, and (iv) be compliant with all agreements entered into under the Act and any other tax credit or programs administered by DED or the Nebraska Department of Revenue.

DED may certify up to $3 million in tax credits per calendar year for 2022 and 2023 and up to $6 million in tax credits per calendar year for 2024 and beyond. The tax credits available to an eligible business shall not exceed $1.5 million per year.

A renewable chemical is a molecule that is converted from a sugar, starch, polysaccharide, glycerin, lignin, fat, grease, or oil derived from plants, animals, algae, or a protein capable of being converted to a first or secondarily derived product that can be further refined into a higher-value chemical, material, or consumer product by means of a biological or chemical conversion process with a significant biobased content that can be used for products including polymers, plastics, food additives, solvents, intermediate chemicals, or other formulated products with a significant nonfossil carbon content. Renewable chemical includes biobased chemicals that can be a food, feed, or fuel additive and supplements, vitamins, nutraceuticals, and pharmaceuticals.  Renewable chemical does not include a chemical sold or used as fuel.