Temporary Place of Business
Individuals or businesses operating a temporary business location in Nebraska have the same Nebraska tax obligations as those operating a permanent place of business in this state. Nebraska tax obligations exist even though the temporary location is used for only a short period of time (for example, due to a natural disaster affecting their current business location).
The information below discusses the major tax programs for which a business may have a tax obligation. Additional information on these and other Nebraska tax programs administered by the Nebraska Department of Revenue (Department), may be found elsewhere on the Department’s website. See “Registering Your Business” for links to other Nebraska governmental agencies from which you may be required to obtain a license or permit.
Any corporation conducting business from a location in Nebraska, and taxed as a corporation under the Internal Revenue Code, is subject to Nebraska income tax on the portion of its federal taxable income derived from sources within Nebraska.
Partnerships, limited liability companies (LLCs), and S corporations conducting business from a Nebraska location must report the Nebraska sourced income to their partners, members, and shareholders. Individual partners, members, and shareholders must file a Nebraska individual income tax return and report their share of the Nebraska income distributed from the flow-through entity. Income distributed to entities which are partners, members, or shareholders is reported on the applicable entity tax return.
Individuals, whether nonresidents or partial-year residents of Nebraska, are subject to tax on income that is derived from Nebraska sources. Individuals report the income earned in Nebraska annually on the Nebraska Individual Income Tax Return, Form 1040N.
Extensions for filing income tax returns may be requested if the individual or business is experiencing a hardship due to a natural disaster. The declaration of a federal disaster area may also impact a taxpayer’s tax filing and reporting responsibilities.
Employers or payors must withhold income tax from wages or payments made to individuals for services performed in Nebraska. This is true even if the individual resides in a state other than Nebraska. The employer or payor must report the withholding to the Department (see Withholding Information). The individual should claim the amount withheld as a credit against the tax liability on his or her Nebraska individual income tax return.
Sales and Use Tax
The rental or lease of office or warehouse space is not subject to Nebraska sales or use tax. The purchase, lease, or rental of tangible personal property (for example, furniture, computers, and office supplies) and certain services (for example, telephone, utilities, and building cleaning services) are subject to sales tax. If tangible personal property is brought into Nebraska for use, use tax applies to the cost of the items, with credit allowed for any sales or use tax properly paid to another state. Retailers with a Nebraska business location must obtain a Nebraska sales tax permit by filing the Nebraska Tax Application, Form 20. Retailers must collect and remit all applicable Nebraska and local option sales taxes on sales occurring in Nebraska on the Nebraska and Local Sales and Use Tax Return, Form 10.