Extend Microenterprise Tax Credit to boost recovery efforts
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April 1, 2021
JOHNATHAN HLADIK
Policy director
Center for Rural Affairs
The past 12 months have not been easy for small businesses. Communities have lost longtime staples, as well as opportunities for future growth, as entrepreneurs were forced to delay planned investments. As business and community leaders work to recover, it is important that every tool, including the Microenterprise Tax Credit, remains available.
From hair salons and restaurants to grocery and hardware stores, more than 80% of the state’s businesses fall into the microenterprise category. The heart of our communities, they provide valuable services and boost local economies. More often than not, microbusinesses are our essential businesses.
Legislative Bill 366, introduced by State Sen. Tom Briese and designated as a speaker priority by Speaker Mike Hilgers, seeks to ensure these enterprises are supported.
To qualify for the Microenterprise Tax Credit, business owners with five or fewer full-time equivalent employees commit to generating new income and expanding their economic footprint. The program offers a 20% refundable tax credit over an applicant’s lifetime.
Improvements included in LB 366 will increase the maximum credit from $10,000 to $20,000; allow family members to apply the credit to unrelated businesses; ask officials to show transparency when approving applications and extend the expiration date from 2022 to 2032.
We applaud Sen. Briese for championing this important legislation and the Revenue Committee for its unanimous approval. As a speaker priority bill, it will be debated by the full legislature soon.
We encourage senators to show their support for our essential entrepreneurs by advancing LB 366.
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