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Sun, May 09, 2010

State Of Nebraska Sued Over Airplane Tax Refund

MidAmerican Energy Holdings Says State Should Not Have Denied $1.1 Million Refund

MidAmerican Energy Holdings company says the State of Nebraska should not have denied a $1.1 million dollar tax refund for the purchase of an airplane in 2004, and has filed suit to force the state to cough up the cash.

But the state says the airplane does not qualify for a tax break because it was used for political fundraising purposes. MidAmerican transported U.S. Senator Ben Nelson (pictured)  on a trip from Georgia to Nebraska in 2006 for a political fundraiser. While Nelson's campaign later paid $457 dollars for the trip, the state says it was enough to withhold the tax refund.

Bloomberg News reports that Tax Commissioner Doug Ewald said the company filed paperwork in 2008 to claim a $1.1 million refund, and disclosed Nelson's trip. MidAmerican and Nebraska have differing opinions about the law which provides tax breaks "except when any such property is to be used for fundraising or for the transportation of a public official." The state says that means all future use of the airplane from the time of purchase. MidAmerican interprets the law to mean its intended use at the time of purchase, and says when it bought the airplane, they had no way to know they would at some point use it for a political purpose, so the exemption should stand.

For his part, Nelson got a deal. The actual cost of his trip from Albany, GA to Omaha was nearly $1,500, and he paid about a third of that. But his reimbursement to MidAmerican was in compliance with FEC guidelines. His office had no comment about the state's denial of the tax refund.

FMI: www.revenue.ne.gov

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MidAmerican Energy Holdings company says the State of Nebraska should not have denied a $1.1 million dollar tax refund for the purchase of an airplane in 2004, and has filed suit to force the state to cough up the cash.

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