Nebraska Business Taxes at a Glance
Nebraska has been cutting its individual and corporate income tax rates, with both top rates reduced again in 2026. It no longer taxes Social Security benefits. And it gives property owners a refundable income tax credit for part of the school property taxes they pay, which means property tax records now matter on the income tax return. BOMCAS helps Nebraska individuals, farmers, and businesses use these rules correctly.
Individual Income Tax
Under Nebraska's graduated rates, residents are taxed on worldwide income and nonresidents on what they earn from Nebraska sources. Legislation enacted in 2023 reduced the top rate in steps, and it fell again for 2026. Social Security benefits are fully exempt, and military retirement pay is also exempt. Nebraska starts from federal adjusted gross income with its own adjustments.
We prepare Nebraska returns, apply these exemptions, and handle part-year and nonresident filings.
Property Tax Credits on the Income Tax Return
Nebraska's property taxes are high, especially on farmland. To offset part of them, the Nebraska Property Tax Incentive Act gives taxpayers a refundable income tax credit based on the school district property taxes paid on their property. The credit is claimed on the individual, corporate, fiduciary, or partnership return, and partnerships and S corporations pass the credit through to owners.
Claiming it requires the parcel identification numbers and school district taxes paid for each property. Missing the credit is common, particularly for owners with many parcels. We gather parcel information, calculate the credit, and include it on the returns.
Corporate Income Tax
Corporations doing business in Nebraska pay corporate income tax on apportioned income, and the top corporate rate has been reduced to match the top individual rate. Financial institutions pay a separate franchise tax. Partnerships and S corporations file Nebraska returns and may withhold for nonresident owners. Pass-through entities in Nebraska can elect to pay tax at the entity level.
We prepare these returns and review each year whether electing makes sense.
Personal Property Returns
Nebraska businesses, including farmers and ranchers, file a personal property return each year with the county assessor for depreciable equipment and machinery used in a business. A portion of value is exempt for each taxpayer in each county, which removes many small businesses from the tax. The return uses depreciation schedules set by state rules, not federal ones. We keep fixed asset records that support these returns and federal depreciation.
Sales and Use Tax
Nebraska's sales tax combines a state rate with local option taxes in many cities and some counties. Nebraska taxes some services, such as certain repair, building cleaning, and pest control services. Agricultural machinery and inputs used in farming have specific exemptions with documentation requirements. We register businesses, track rates by location, and file returns.
County Inheritance Tax
Nebraska has no state estate tax, but its counties impose an inheritance tax on property passing at death. The rate and exemption depend on the beneficiary's relationship to the person who died, with spouses exempt and close relatives taxed at a low rate above an exemption. The tax is determined through the county court process. We help executors gather values and records and prepare the final income tax and fiduciary returns, working with the estate's attorney.
ImagiNE Nebraska and Business Incentives
The ImagiNE Nebraska Act offers credits and refunds for qualifying investment and job creation, replacing an earlier incentive program. Qualifying requires an application, agreements, and detailed records of investment, wages, and employees. We help businesses keep the records needed to claim and keep incentives, working with their incentive advisers.
Agriculture
Agriculture is central to Nebraska, including corn, soybeans, cattle, and feedlots. Farm and ranch clients need:
- Grain and livestock inventory records
- Federal farm reporting, including income averaging and program payments
- Equipment records for personal property returns and depreciation
- Parcel records for the school property tax credit
Remote Sellers and Nebraska Sales Tax
Out-of-state sellers that reach Nebraska's economic nexus threshold must register and collect state and local sales tax on sales into the state. Marketplace facilitators collect for their third-party sellers. We help remote sellers decide when they must register and set up filing.
Payroll and Withholding Changes
Nebraska employers withhold state income tax and report unemployment insurance to the Nebraska Department of Labor. Rate changes in recent years have updated withholding tables. We run payroll and check every state report against the books before it is filed.
Feedlots, Insurers, Railroads, and Data Centers
- Agriculture and food processing: inventory, personal property, and property tax credits
- Insurance and financial services in Omaha: multistate payroll and apportionment
- Manufacturing: incentives, fixed assets, and sales tax on equipment
- Railroads and logistics: apportionment and payroll
- Technology and data centers: incentives and large fixed asset records
Retiring in Nebraska
Retirees moving to Nebraska benefit from the full exemption for Social Security and military retirement pay. In the first year, a part-year return divides income by residency dates. New homeowners should keep their property tax statements and parcel numbers, because the school property tax credit is claimed on the income tax return the following year.
Books Organized by Parcel and County
Nebraska bookkeeping should track property tax payments by parcel, equipment by county for personal property returns, and taxable services separately for sales tax. We design the chart of accounts and the month-end close so these numbers are ready when returns are due.
Contact BOMCAS About Nebraska
Farm families claiming the school property tax credit, businesses filing personal property returns, and companies documenting ImagiNE incentives can contact BOMCAS for a remote review. Local pages for Nebraska cities and services are planned under this section. Return to the BOMCAS home page or our United States services. Use this page as general background, not as advice for your own situation.
Talk to BOMCAS About Your Nebraska Taxes
Have a question about your Nebraska filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.