Pay Your Nebraska Small Business Taxes

One of your most important jobs as a Nebraska small business owner is keeping your company legally compliant. A big part of keeping any business compliant means paying your federal, state, and local taxes properly and on time. But knowing what taxes apply to your business and when they are due can cause anxiety for even experienced entrepreneurs. That’s why we’ve put together this short guide on state taxes for Nebraska businesses. Learn about what types of taxes might apply to your business, when and how to pay them, and which products and services can help make your life easier at tax time.

If you’re looking for further help with compliance, our Worry-Free Compliance Service keeps an eye on your filing deadlines and lets you know when they are about to come up.

If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.

Step 1: Establish your Nebraska business’s corporate income tax obligations

Your business’s income tax largely depends on its entity structure, and a C corporation’s tax rate changes with the corporation’s amount of income. The following income tax rates normally apply:

• Corporations with taxable income between $0 and $100,000 pay a 5.8% tax rate
• Corporations with more than $100,000 of taxable income pay $5,580 plus 7.81% for income over $100,000

For most corporations, taxes are due by the 15th day of the 4th month after its tax year closes. If a corporation’s fiscal year ends on June 30, taxes are normally due by the 15th day of the 3rd month after the tax year closes. 

Pass-through Entities

Pass-through entities typically have different income tax obligations than C corporations. A pass-through business entity doesn’t usually pay taxes, but the owners or members of that entity pay personal income taxes on their share of the business income. Pass-through entities can include:

• Sole proprietorships
• Partnerships 
• Limited liability companies (LLCs)
• S corporations

Although these businesses don’t normally pay taxes, they usually have to file tax returns with the state. 

In general, state tax returns for pass-through entities are due at the same time as federal income tax returns are due. Many businesses must file their state returns by the following dates:

• Sole proprietorships — by the 15th day of the 4th month after the tax year ends
• Certain single-member LLCs — by the 15th day of the 4th month after the tax year ends
• Partnerships — by the 15th day of the 3rd month after the tax year ends
• Certain multiple-member LLCs — by the 15th day of the 3rd month after the tax year ends
• S corporations — by the 15th day of the 3rd month after the tax year ends

S corporations are usually required to use a calendar year (ending December 31) as their tax year, but other businesses can choose a different tax year. 

Step 2: Determine your Nebraska business’s employment taxes

If your business has employees or pays certain nonresidents for their services, you likely have the responsibility of withholding money from their paychecks to cover their state income tax obligations. These are employment taxes or withholding taxes. The withholding tax rate changes with the amount of wages, and can span between 2.26% and 6.95% plus a flat fee in many cases. 

Businesses also need to make regular withholding deposits to the state. The due dates for making these deposits depend on how much employee income your business has withheld. Many businesses need to make deposits by the following due dates: 

• For businesses that withheld more than $500 in the first month of the quarter, deposits are due by the 15th day of the following month
• Deposits are due by the 15th day of the month that follows the second month for businesses that withheld more than $500 in the first or second month of the quarter
• For the third month of the quarter, deposits are due by the last day of the following month

Regardless of whether you are obligated to withhold wages in any given quarter, you normally need to file withholding returns on a quarterly basis. These quarterly withholding returns are due by the last day of the month that follows the end of each quarter. Businesses authorized by the state to file yearly withholding returns must file them by January 31 of the following year. 

Step 3: Establish your Nebraska businesses additional state tax obligations

Income and employment taxes are standard taxes that tend to affect the vast majority of businesses, but some businesses have additional taxes to pay based on their industries and activities. Common additional Nebraska small business taxes include: 

• Sales and use taxes
• Franchise taxes
• Unemployment taxes 
• Excise taxes

Sales and Use Taxes

Nebraska charges businesses sales and use taxes if they sell tangible, personal property at retail or offer taxable services such as: 

• Public utilities
• Antenna television operation
• Satellite service operation
• Entertainment
• Guarantees
• Warranties

The state tax rate is 5.5%, but businesses might also be subject to local sales and use taxes of varying rates. Sales and use taxes are normally due on the 20th of each following month.  

Franchise Taxes

Sometimes states charge all businesses within their territory franchise taxes for the privilege of doing business in the state. Nebraska has a “franchise tax,” but it’s not the same. The Nebraska franchise tax is charged to financial institutions for customer deposits. 

Unemployment Taxes

If your business has employees, you need to pay wages while your employee works for you and you might need to provide benefits to certain former employees. You cover these benefits by paying your unemployment taxes. Depending on the nature of your business, the age of your business, and the amount of wages you pay, your unemployment tax rate could range from 0% to 5.4%. Quarterly wage reports are due on April 30, July 31, October 31, and January 31. 

Excise Taxes

In some states, business activities related to alcoholic beverages, cigarettes, fuel, and the transportation of cargo are subject to excise taxes. You can visit Nebraska’s Department of Revenue website for more information on the state’s excise taxes. 

Step 4: Prepare to file and pay your Nebraska business taxes

You’ll likely pay the majority of your state business taxes to the Department of Revenue, but you pay unemployment taxes to the Department of Labor. We encourage you to take advantage of submitting your forms and payments through the Department of Revenue’s online portal and the Department of Labor’s UIConnect online system.

To file correct tax information with the government, you’re probably going to need to gather a lot of your business documents, such as:

• Payroll records
• Accounting information
• Employment records
• Legal documents
• Receipts
• Invoices 

Depending on your business’s unique characteristics, you might need other business documents to complete your taxes. This means that tracking your business’s income and expenses is vital.

Quickly accessing the business records needed to properly prepare your taxes can be a challenge. But this challenge can be minor if you have your records organized. With the Smart Dashboard on our ZenBusiness Money App, you can easily send custom invoices, accept credit card and bank transfer payments, and manage your clients from an easy-to-use dashboard.

Not sure how to stay compliant? Learn more about legal compliance for small business owners.

Do I need an accountant?

Although not required, many small businesses need a tax professional to properly file and pay their taxes. The consequences of an improperly filed or calculated tax return can be disastrous, so it’s best to seek professional help. If you’re not sure what kind of professional to contact for your business tax needs, you can use the IRS’s guide on Tax Return Preparer Qualifications and Credentials on its website to learn more. 

How We Can Help

To properly pay your business taxes, you normally need good records, good organization, and good support. Keeping these things together as a business owner is often easier said than done. We can help keep you organized and on track. Our ZenBusiness Money App helps you manage your clients and organize your business’s financial records so they are at your fingertips when you need them.

If your business is still in the formation phase, our Nebraska LLC Formation Services or Corporation Formation Services can help you get started.

No matter what kind of business you run, we’ve got the tools you need to succeed.