Starting a Business in Nebraska
Nebraska is consistently ranked as one of the best states for a pro-business atmosphere, especially for small to medium sized companies. It has a strong workforce due to its large network of dependable universities and a low cost of living. The state also offers numerous loans & grants, tax credits, and Sales Tax Rebate programs. Major Industries in Nebraska include Healthcare Services, Food Processing, Technology Services, Renewable Energy, Biosciences and Manufacturing. There are many things that have to be done after starting a business in Nebraska. Whether you are trying to get a business license, filling out a form 20, verifying a Tax ID Number, seeing how to get business credit and financing, or looking for a specific Nebraska sales tax rate, finding competent help is crucial.
STEPS TO STARTING A BUSINESS IN NEBRASKAThe Nebraska Department of Revenue issues tax notices and has a comprehensive listing of its procedures governing the collection and remittance of sales tax. The Nebraska Secretary of State has a platform where you can perform a corporation search. Once you have a formed company with the Nebraska Secretary of State, you can get a Nebraska Sales Tax Permit online and obtain Business Licenses you need. Many changes have come along in recent years pertaining to the collection of sales tax. These laws have had a significant impact on many businesses like Etsy and Ebay. These are collectively known as Marketplace facilitator laws and they have to do with collecting tax on behalf of the sellers that use their shopping platforms. If you sell to customers in other states and exceed specific sales thresholds, you may suddenly come to find out that you are a remote seller and you need to apply for SST streamlined sales tax. Here are some of the business incentive programs available to help you expand your Nebraska operations:
- The flagship Nebraska opportunity incentive is known as the Nebraska Advantage Act. This program offers a Sales Tax Rebate, tax credits, and other exemptions. A company must meet certain investment and minimum employment requirements. The program is broken down into 6 tiers.
- Tier 1 businesses that invest at least $1 million and create at least 10 new jobs qualify for a Sales Tax Rebate of half the cost of property purchases used in a project. Additionally, a wage credit of 3%-6% of wages paid and a 3% general tax credit are given.
- Tier 2 businesses that invest at least $3 million and create at least 30 new jobs qualify for a Sales Tax Rebate of half the cost of property purchases used in a project. Additionally, a wage credit of 3%-6% of wages paid and a 10% general tax credit are given.
- Tier 3 is a job only credits for businesses that create at least 30 new jobs qualify for the wage credit of 3%-6% of wages paid with no further investment required.
- Tier 4 businesses qualify for all the benefits of Tier 2. Additionally, businesses that invest at least $12 million and create at least 100 new jobs qualify for a personal property tax exemption on personal property purchases used in a distribution facility, aircraft powered by turbines, and mainframe computers.
- Tier 5 is an investment only credit for businesses that invest at least $37 million will receive a Sales Tax Rebate on qualified property purchases used in a project.
- Tier 6 businesses are considered all businesses except for retail that can create higher quality-better paying jobs. Employee compensation must equal at least 150% of state average wage or 200% of county average wage. Businesses that invest at least $10 million and create at least 75 new jobs qualify for a personal property tax exemption on personal property purchases for 10 years, a wage credit of 10% of wages paid, and a 15% investment tax credit are given.
- Nebraska has a Research and Development Tax Credit given to a business for any R & D investments that it engages in. A business must first meet its tax obligations as well as certain federal level requirements, after which the reimbursement can be taken for up to 21 years. The credit can be taken as percentage of the total federal credit allowed.
- A workforce expansion program exists called the Microenterprise Tax Credit for qualified Nebraska businesses. This tax credit intends to promote growth for a business that is able to create additional jobs. It provides a 20% credit on increased gross wages paid to employees or increased expenditures into the local community. The maximum credit allowed is $10,000.
- The Nebraska Business Innovation Program is designed to assist companies so they can cultivate and deliver high technology resources with the goal of creating high quality jobs. Assistance comes in the form of loans or grants. Monies can be used for various applications including research and development, prototype testing, and continued educational training.