State Income Taxes in Nebraska
The state of Nebraska does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale with multiple brackets (4). The tax rates range from between 2.46% to 6.84% for 2020. The highest bracket starts at $31,750.
State Business Taxes in Nebraska
The state of Nebraska two (2) tax rates for Corporate income taxes,
- 5.58% for income < $100,000
- 7.81% for income > $100,000
Other flow-thru entities, such as S-Corporations, LLCs and Partnerships are not subject to the corporate income tax.
Nebraska Corporate Occupation Tax
In addition to the Corporate tax, Nebraska has franchise tax called the Corporate Occupation Tax that applies to C corps and S Corps. This tax is paid every other year.
This capital stock tax is based on a fixed dollar schedule. Similar to Georgia, this means that as taxable capital increases, the tax rate decreases. The tax range from $26- $23,990 of paid-up capital.
Sales and Property Taxes in Nebraska
Sales Taxes – Like most states, Nebraska has both a state and local sales tax. Its state sales tax is 5.50% and it’s local sales tax has an average rate of 1.43% (which puts the state average 6.93%).
Property Taxes in Nebraska – the average property tax rate for residential property in the state of Nebraska is 1.65%, which is well above the national average. Nebraska is within the top ten most expensive states regarding property tax as a percentage of value.
Inheritance Taxes in Nebraska
Nebraska is one of only six (6) states that requires beneficiaries to pay taxes on an inheritance. Depending on who the heir is, the tax rate ranges from 1%-18% and the exemptions range from $10,000-$40,000. Nebraska has the highest inheritance tax rate maximum in the country. The inheritance tax in this state is levied at the county level.
Payroll Taxes in Nebraska
Unemployment taxes usually consist of three factors. They are: the wage base, the range of UI rates, number of schedules. Below is an outline of the three:
- Wage Base – Nebraska has a wage base of $40,000 (high wage base)
- UI Rates – range from 0.25% to 5.40%
- Schedules – Nebraska has multiple rate schedules regarding UI
Nebraska Business Entities – LLCs
Nebraska is inexpensive in regards to opening an LLC. Here are some important facts:
- Nebraska’s fee is a bi-annual reporting fee (paid every two years).
- It costs between $10 – $15, depending on your type of entity.
- When you register with the state, you pay a one time fee of $105
- Secretary of State of Nebraska website – click here