Site Selection Data Date:
Taxes


                                                     

GREATER OMAHA TAXES


When it comes to financial strength, Greater Omaha is among the strongest. In fact, the city of Omaha is one the few major U.S. cities to have a current AAA credit rating from Standard and Poor’s.

In addition, KPMG International's Competitive Alternatives: 2010 Focus on Tax study ranked Omaha as having the most favorable tax structure for businesses among cities with population between 500,000 and 2 million.  This stable tax infrastructure allows Omaha to promote a pro-business climate that:
  • Offers tax credits and refunds to new and expanding businesses
  • Provides targeted business tax incentives and exemptions to foster economic growth
  • Prohibits deficit financing for city and state governments
  • Limits debt financing and controls government spending through an article in the state constitution
  • Puts workers' compensation and unemployment rates among the lowest in the nation

Learn more about Sales Tax, Personal Income Tax, Property Tax, Corporate Income Tax, Coprorate Occupation Tax, Worker's Compensation and Unemployment Insurance.

Sales Tax
Sales tax rates are consistent throughout Greater Omaha’s eight-county Metropolitan Statistical Area (MSA).
The state of Nebraska levies a 5.5 percent sales and use tax. In addition, incorporated municipalities may impose
a 0.5 percent, 1.0 percent or 1.5 percent sales and use tax, if approved by voters.
 

 

The following table lists municipalities in the Greater Omaha area that levy a sales tax.

 

 

 

Select Greater Omaha Sales Tax Levies
(Effective April 1, 2011)
  City Tax Total Tax
Cass County    
Louisville 1.5% 7.0%
Plattsmouth 1.5% 7.0%
Douglas County    
Bennington 1.0% 6.5%
Omaha 1.5% 7.0%
Valley 1.5% 7.0%
Waterloo 1.5% 7.0%
Sarpy County    
Bellevue 1.5% 7.0%
Gretna 1.5% 7.0%
La Vista 1.5% 7.0%
Papillion 1.5% 7.0%
Saunders County    
Wahoo 1.5% 7.0%
Washington County    
Blair 1.5% 7.0%
Harrison County, IA    
Missouri Valley* 1.0% 7.0%
Mills County, IA    
Glenwood* 1.0% 7.0%
Pottawattamie County, IA    
Council Bluffs 1.0% 7.0%
*Total levies for Iowa municipalities include a 1% School Local Option Sales Tax (SILO)
Source: Nebraska Department of Revenue, Iowa Department of Revenue

Taxable Items
Sales tax is imposed on gross receipts from:
  • Retail sales and rentals of tangible personal property
  • Utilities (except for certain exemptions)
  • Admissions
  • Producing, fabricating, processing, printing or imprinting
  • Rentals of lodgings for periods of less than 30 days

 

Sales Tax Exemptions and Refunds
Food sold in grocery stores and prescription drugs are exempt from sales tax. Some other items that are exempt or eligible for a refund include:
  • Aircraft fuel, minerals, oil, natural gas, motor vehicle fuels and and specialty fuels
  • Sales of electricity, coal, gas, fuel oil, diesel fuel, tractor fuel, propane, coke, nuclear fuel and butane when more than 50 percent of the amount purchased is used directly to process, manufacture or refine tangible property or in the generation of electricity
  • Sales of property that will become ingredients or component parts of tangible personal property that is manufactured or processed for ultimate retail sale
  • Qualified air or water pollution control facilities
  • Agricultural machinery and equipment purchased or leased on or after January 1, 1992 for use in commercial agriculture
  • Water used to irrigate agricultural land or in manufacturing
  • Organizations that qualify for the Nebraska Advantage Act are also eligible for sales tax refunds

 

Personal Income Tax
The State of Nebraska levies a personal income tax that is calculated as follows:

 

Federal adjusted gross income
PLUS non-Nebraska tax-exempt bonds
MINUS federal standard deduction

 

OR federal itemized deduction (less any state or local income taxes included)
MINUS United States government interest

Nebraska taxable income is then subject to one of four personal income tax brackets – ranging from 2.56 percent to 6.84 percent. After the tax is calculated, a $118 tax credit is subtracted from the tax liability for each personal exemption. See the following table for more detail.

State of Nebraska Personal Income Tax Rates - 2010
Single Taxpayer
Taxable Income Nebraska Tax Rate Is:
Over Not Over  
$0 $2,400 2.56% of taxable income
$2,400 $17,500 $61.44 + 3.57% of the excess over $2,400
$17,500 $27,000 $600.51 + 5.12% of the excess over $17,500
$27,000+   $1,086.91 + 6.84% of the excess over $27,000*
Married Filing Jointly and Surviving Spouses
Taxable Income Nebraska Tax Rate Is:
Over Not Over  
$0 $4,800 2.56% of taxable income
$4,800 $35,000 $122.88 + 3.57% of the excess over $4,800
$35,000 $54,000 $1,201.02 + 5.12% of the excess over $35,000
$54,000+   $2,173.82 + 6.84% of the excess over $54,000*
Head of Household
Taxable Income Nebraska Tax Rate Is:
Over Not Over  
$0 $4,500 2.56% of taxable income
$4,500 $28,000 $115.20 + 3.57% of the excess over $4,500
$28,000 $40,000 $954.15 + 5.12% of the excess over $28,000
$40,000+   $1,568.55 + 6.84% of the excess over $40,000*
Nebraska Standard Deductions**
  $5,700 Single
  $11,400 Married, Filing Jointly
  $8,350 Head of Household
Note: all brackets are subject to a personal exemption credit of $118
*If adjusted gross income is $167,100 or more ($83,550 if married filing separate), Nebraska itemized deductions are reduced and marginal tax rates are phased out. **Same as the Federal Standard Deductions, those over age 65 and those who are blind receive a larger deduction.
Source: Nebraska Department of Revenue

Property Tax
There is no state-levied property tax in Nebraska. However, local governments levy ad valorem taxes on real estate and some personal property. Taxable property valuations are determined by each county assessor based on:
  • Earning capacity of the property
  • Relative location
  • Desirability and functional use
  • Reproduction costs less depreciation
  • Comparison with other properties of known or recognized value
  • Market value in the ordinary course of trade and zoning

 

Tangible property is assessed on the first of January each year. Tax levies vary by city, county and school district and are specific to each site location. The following table shows the most recent tax rates for selected jurisdictions in Greater Omaha.

 

 

 

Select Greater Omaha Property Tax Levies
 
Levy per $100
Assessed Value
City
Bellevue 2.050882
Blair 2.106577
Gretna 2.205155
La Vista 2.20343
Louisville 2.457688
Omaha (OPS) 2.178160
Omaha (MPS) 2.180640
Omaha (Westside) 2.249550
Papillion 2.101949
Plattsmouth 2.360159
Ralston 2.249440
Valley 2.122650
Waterloo 2.021070
  Levy per $1,000 Assessed Value
 
Council Bluffs 44.96564
Council Bluffs (Lewis Ctrl) 39.66925
Note: These are taxes levied in 2010, collectable in FY 2011
Source: County assessor data (Cass, Douglas, Sarpy, Washington & Pottawattamie)


Depreciable Personal Property

Depreciable personal property is taxed based on a depreciation factor determined by the acquisition year and the recovery period using the federal Modified Accelerated Cost Recovery System (MACRS). Depreciation factors range from 85 percent to 89.29 percent. Most recovery periods fall within a five to seven year range for office, transportation, construction and manufacturing equipment. Once a property’s net book value reaches zero, it is not taxed.

 

Corporate Income Tax
In Nebraska, it is the state (not local) governments that access a corporate income tax. The Nebraska corporate income tax rates are:
  • 5.58 percent for the first $100,000
  • $5,580 plus 7.81 percent for income over $100,000 (rates are based on federal tax income attributable to Nebraska operations)

 

Taxable Corporate Income
  • Direct Income Tax – applies to corporations whose business consists exclusively of foreign or interstate commerce.
  • Franchise Tax – applies to corporations with any intrastate business and is measured by net income.
  • Sales Only Formula – is advantageous to multi-state unitary firms that sell products and services outside Nebraska while having significant property and payroll within the state. It is equal to the ratio of Nebraska sales to total U.S. sales, multiplied by adjusted federal taxable income.
  • Tax Incentives– apply to qualifying companies that are able to earn payroll and investment credits under the Nebraska Advantage Act (LB 312).

 

Biennial Corporation Occupation Tax

Nebraska imposes an occupation tax for the privilege of doing business in the state or existing in the state as a corporation. Domestic and foreign corporation occupation tax reports are filed biennially in even numbered years.  The next tax reporting period will be 2010-2011.  The tax rates are based on the type of corporation and include:
  • Domestic corporations and domesticated foreign corporations – based on paid up capital stock.
  • Foreign corporations doing business for profit and owning or using a part or all of their capital in Nebraska – based on the conduct of its business in Nebraska, which consists of the sum total of the actual value of all real estate and personal property employed in Nebraska in the transaction of its business.

 

Corporate Organization Filing Fees

The State of Nebraska requires domestic corporations pay corporate organization filing fees at the time of filing with the Nebraska Secretary of State. These include (note: there is a $5.00 per page recording fee in addition to the amount listed):

 

  • Articles of Incorporation, Association or Consolidation - Fees are based on authorized capital stock:
                $10,000 or less - $60
                $10,001 to $25,000 - $100
                $25,001 to $50,000 - $150
                $50,001 to $75,000 - $225
                $75,001 to $100,000 - $300
                Over $100,000 - $300 (plus $3 per each additional $1,000)
  • Amendments, Mergers and Share Exchanges – The fee is $25 plus a recording fee.
  • Dissolutions – The fee is $45 plus a recording fee.
  • Certificate of Authority – Foreign corporations must procure a certificate of authority from the Nebraska Secretary of State to transact business in Nebraska. The fees include:
                 Application filing fee - $130
                 Recording fee - $25
                 Withdrawal - $25 (plus a $25 recording fee)

For a complete schedule of corporate fees, contact the Nebraska secretary of state’s office at (402) 471-4079 or visit www.state.ne.us/home/SOS.

 

Workers' Compensation

Businesses in Nebraska enjoy an average workers’ compensation manual rate of $3.53 per $100.00 of payroll for manufacturers – nearly five percent below the national payroll average of $3.71 per $100.00. In addition, Nebraska helps businesses hold the cost of workers’ compensation down by utilizing the Loss Cost Multiplier approach for determining rates. This allows insurance companies to determine the rate according to each company’s own experience.

 

Nebraska companies are also able to be self-insured for workers’ compensation. Qualifying companies must have at least 100 employees with a minimum annual payroll of $2.6 million and have been in business for at least five years.

 

Unemployment Insurance

Nebraska businesses also enjoy exceptionally low unemployment insurance rates. According to the Nebraska Department of Labor, new employers not in the construction industry and other non-experience-rated employers are assigned a tax rate equal to the state average tax rate (3.33 percent) or 2.5 percent, whichever is less.  (After two years, companies with positive experiences are eligible for lower rates.)  This tax rate applies to the taxable wage base of $9,000.  The latest estimated contribution per worker was $283.50 for Nebraska, which is more than 22 percent lower than the national average of $366.67 (Source: U.S. Department of Labor)



    

 


© Copyright 2013 | Greater Omaha Economic Development Partnership | 1301 Harney Street | Omaha, NE 68102 | 800-852-2622