Nebraska — Corporate Income / Franchise Tax

Nebraska imposes a corporate income tax on every corporation and other entity taxed as a corporation under the Internal Revenue Code that is doing business in Nebraska and has federal taxable income derived from or attributable to sources within this state.

Source: Neb. Rev. Stat. § 77-2734.02(1)

"Doing business in this state" means either exercising the corporation's franchise in Nebraska or conducting operations that exceed the protections of Public Law 86-272 (15 U.S.C. § 381 et seq.).

Source: Neb. Rev. Stat. § 77-2734.04

Source: Neb. Admin. Code tit. 316, ch. 24, § 001.01

## Entities Excluded

Nebraska does not impose its corporate income tax on:

• Corporations protected from state income tax under 15 U.S.C. § 381 (Public Law 86-272)
• Financial institutions as defined in Neb. Rev. Stat. § 77-3801 (these entities are subject to a separate financial-institution franchise tax)
• S corporations that have a valid election in effect under Subchapter S of the Internal Revenue Code (these entities file informational returns; income passes through to shareholders)

Source: Neb. Rev. Stat. §§ 77-2734.02, 77-2734.04

Source: Nebraska DOR Business Income Tax FAQs

## Tax Rate

For taxable years beginning on or after January 1, 2026, and before January 1, 2027, Nebraska imposes a flat 4.55 percent tax on all corporate taxable income.

Source: Neb. Rev. Stat. § 77-2734.02(1)(g)

For taxable years beginning on or after January 1, 2027, the rate decreases to 3.99 percent on all taxable income.

Source: Neb. Rev. Stat. § 77-2734.02(1)(h)

## Tax Base

The starting point for computing Nebraska corporate income tax is the corporation's federal taxable income as reported to the IRS (or as subsequently corrected). Nebraska law requires specific additions to and subtractions from federal taxable income to arrive at Nebraska taxable income.

Source: Neb. Rev. Stat. § 77-2716

Source: 2025 Nebraska Corporation Income Tax Booklet, p. 6

A corporation conducting business solely within Nebraska reports its entire federal taxable income (as adjusted) to Nebraska. A corporation that derives income from both in-state and out-of-state sources and is taxable in another state must apportion its income using Nebraska's single-factor sales apportionment formula.

Source: Neb. Admin. Code tit. 316, ch. 24, § 023.01, § 023.08

## Unitary Combined Reporting

When a group of corporations conducts a unitary business, Nebraska requires a single combined return reporting the income of the entire unitary group.

Source: 2025 Nebraska Corporation Income Tax Booklet, p. 6

Source: Nebraska DOR Business Income Tax FAQs

Nebraska conforms to the federal due dates for corporate income tax returns. For most corporations, the Nebraska Corporation Income Tax Return (Form 1120N) is due on the 15th day of the fourth month following the close of the taxable year. For corporations with a fiscal year ending June 30, the return is due on the 15th day of the third month following the close of the taxable year.

Source: Neb. Rev. Stat. § 77-2768

Nebraska uses a single-factor sales apportionment formula for corporations doing business both within and outside the state. The sales factor is a fraction: the numerator is the corporation's total sales in Nebraska during the taxable year, and the denominator is the corporation's total sales everywhere during the taxable year. This single-factor formula has applied to all tax years beginning on or after January 1, 1992.

Source: Neb. Rev. Stat. § 77-2734.05

Nebraska requires corporations to make quarterly estimated income tax payments when the expected tax liability for the year, after credits, exceeds $400. Payment due dates conform to the federal estimated tax payment schedule. Partnerships, limited liability companies taxed as partnerships, and S corporations are not required to make estimated tax payments under this provision.

Source: Neb. Rev. Stat. § 77-2769(2)(b), (5)

Source: Neb. Admin. Code tit. 316, ch. 20, § 003.01

A corporation has nexus with Nebraska and is subject to corporate income tax if it is "doing business in this state" and derives federal taxable income from Nebraska sources. "Doing business in this state" means either (1) exercising the corporation's franchise in Nebraska, or (2) conducting operations that exceed the protections of Public Law 86-272 (15 U.S.C. § 381 et seq.).

Source: Neb. Rev. Stat. § 77-2734.04

## Activities Creating Nexus

Nebraska's Department of Revenue regulation 316 Neb. Admin. Code ch. 24, § 205 provides that a business entity is "doing business in Nebraska" if its activities within the state exceed soliciting sales of tangible personal property as protected by 15 U.S.C. § 381. Activities that constitute doing business in Nebraska include, but are not limited to:

• Maintaining an office, warehouse, or inventory in Nebraska
• Owning or leasing property in Nebraska
• Providing or arranging for repair, service, or training in Nebraska in connection with sales of property or services (including repairs under a warranty sold or provided by the business entity)
• Transactions involving intangibles such as copyrights, trademarks, trade names, and service marks
• Entering into franchising or licensing agreements
• Selling or leasing real or intangible property
• Any other activity conducted in Nebraska that is not soliciting sales of tangible personal property and is not de minimis

Source: 316 Neb. Admin. Code ch. 24, § 205.01, § 205.01B

## Public Law 86-272 Protection

A corporation whose only in-state activity is the solicitation of orders for sales of tangible personal property, where the orders are approved and filled from outside Nebraska, is protected from Nebraska corporate income tax under Public Law 86-272 (15 U.S.C. § 381). Any activity beyond this narrow scope — including sales of services, intangibles, or digital products, or any post-sale activity such as warranty service, training, or technical support — exceeds the protection and creates nexus.

Source: Neb. Rev. Stat. § 77-2734.04

Source: 316 Neb. Admin. Code ch. 24, § 001.01

## Special Rule for Trucking Companies

Trucking companies that transport goods using Nebraska roads are doing business in Nebraska. Additionally, a trucking company is doing business in Nebraska if, during the taxable year, it (1) owns or rents any real or personal property in Nebraska (except mobile property), (2) makes any pick-ups or deliveries within Nebraska, (3) travels more than 25,000 mobile property miles within Nebraska, (4) travels in Nebraska for more than 3% of the total mobile property miles traveled in all states during that taxable year, or (5) makes more than 12 trips into Nebraska.

Source: 316 Neb. Admin. Code ch. 24, § 205.02, § 205.02A

## Economic Nexus

Unlike sales tax, Nebraska does not impose a bright-line dollar threshold for corporate income tax nexus. Instead, nexus is based on the traditional standards of doing business and exceeding the Public Law 86-272 safe harbor. A corporation with substantial business activities in Nebraska — regardless of revenue levels — may have nexus if those activities are not limited to the solicitation of orders for tangible personal property.

Unable to confirm as of 2026-05-28.

Nebraska adopted market-based sourcing for corporate income tax apportionment effective for tax years beginning on or after January 1, 2014. Market-based sourcing assigns receipts to Nebraska based on where the customer's market is located—primarily where the service is received or the intangible property is used—rather than where the taxpayer performs the underlying activities (cost-of-performance). This methodology applies to multistate businesses that apportion income to Nebraska; it does not apply to corporations that operate exclusively within Nebraska and therefore report 100 percent of their income to the state.

Source: Neb. Rev. Stat. § 77-2734.14

Source: Nebraska DOR Market-Based Sourcing Page

## Tangible Personal Property

Sales of tangible personal property are sourced to Nebraska if the property is delivered or shipped to a purchaser (other than the U.S. Government) within Nebraska, regardless of the f.o.b. point or other conditions of sale. Sales of tangible personal property shipped from a Nebraska location to the U.S. Government are also sourced to Nebraska.

Source: Neb. Rev. Stat. § 77-2734.14(2)(a), (b)

## Services

Sales of services are sourced to Nebraska based on where the service is received by the customer. Specifically, a service sale is attributable to Nebraska if the service, when rendered:

• Relates to real property located in Nebraska, even if the buyer is located in another state;
• Relates to tangible personal property located in Nebraska at the time the service is received, even if the buyer is located in another state; or
• Is performed in connection with the buyer's trade or business operations that are conducted in Nebraska and the buyer is operating or engaged in a trade or business in Nebraska (meaning the buyer has property, payroll, or customers in Nebraska). If the buyer is operating in multiple states, the sale is apportioned to Nebraska in proportion to the extent the service is received in Nebraska.

For services that do not fall within these categories, the sale is sourced to Nebraska if the service is delivered to a location in Nebraska, or if the service relates to an individual located in Nebraska at the time the service is received.

Source: 316 Neb. Admin. Code ch. 24, § 333.01

Service Default Rule

If the location where a service is received cannot be determined, the sale is sourced to Nebraska if the customer's billing address is in Nebraska. If the customer is an individual and the billing address is a post office box, the sale is sourced to Nebraska if the individual's residence is in Nebraska.

Source: 316 Neb. Admin. Code ch. 24, § 333.02

## Intangible Property

Sales of intangible property (patents, copyrights, trademarks, trade names, royalties, and formulas) are sourced to Nebraska if the buyer uses the intangible property at a location in Nebraska, even if the buyer's customers are located in another state. If the buyer uses the intangible property both within and outside Nebraska, the sales are apportioned to Nebraska in proportion to the buyer's use of the intangible property in Nebraska relative to the buyer's total use everywhere during the taxable year.

Source: 316 Neb. Admin. Code ch. 24, § 335.01

Marketing Intangibles

If the intangible property is used by the buyer in marketing its products (e.g., licensing a trademark, trade name, or service mark), the use in Nebraska is measured by the share of the buyer's receipts that reflects the buyer's sales within Nebraska relative to the buyer's sales everywhere. If this cannot be determined, the Nebraska use is the share of receipts that reflects Nebraska's population relative to the population everywhere the buyer markets the product.

Source: 316 Neb. Admin. Code ch. 24, § 335.01A(1)

Production Intangibles

If the intangible property is used by the buyer in production (e.g., licensing a patent or copyright for manufacturing), the Nebraska use is the share of the buyer's production that occurs in Nebraska using the intangible relative to the buyer's total production using the intangible everywhere.

Source: 316 Neb. Admin. Code ch. 24, § 335.01A(2)

Service Intangibles

If the intangible property is used by the buyer like a good or service (e.g., licensing use of a legal research database), the sales are attributable to Nebraska using the sourcing rules for services described above.

Source: 316 Neb. Admin. Code ch. 24, § 335.01A(3)

Mixed Intangibles

If the buyer uses the intangible property in more than one way (marketing, production, or service), and the license separately states fees for each type of use, each use is sourced to Nebraska separately under the applicable rule. If the fees are not separately stated, the sales are sourced based on the predominant use.

Source: 316 Neb. Admin. Code ch. 24, § 335.01A(4)

Intangible Default Rule

If the location of use cannot be determined, the sale of intangible property is sourced to Nebraska if the buyer's billing address is in Nebraska.

Source: 316 Neb. Admin. Code ch. 24, § 335.01B

## Interest, Dividends, and Treasury Function Income

Interest, dividends, investment income, and other net gains from transactions in intangible assets held in connection with a treasury function (excluding net gains from the sale or redemption of marketable securities) are sourced to Nebraska to the extent:

1. The income is included in the corporation's federal taxable income; and
2. The investment, management, and record-keeping activities associated with corporate investments occur in Nebraska.

Source: Neb. Rev. Stat. § 77-2734.14(3)(d)

Source: 316 Neb. Admin. Code ch. 24, § 335.02

## Loans Secured by Real or Tangible Personal Property

Gross interest, fees, points, charges, penalties, net gains from the sale of loans, and loan servicing fees derived from loans secured by real property or tangible personal property are sourced to Nebraska if the property securing the loan is located in Nebraska. This applies to loans owned by the taxpayer or by another person, including loans under a participation agreement.

Source: Neb. Rev. Stat. § 77-2734.14(3)(e)

Source: 316 Neb. Admin. Code ch. 24, § 335.03

## Catch-All Provision

Sales other than sales of tangible personal property that are not specifically addressed in the sourcing statute or regulations must be sourced so as to fairly represent the extent of the taxpayer's business activity in Nebraska. The method used must be reasonable and described by the taxpayer.

Source: Neb. Rev. Stat. § 77-2734.14(3)(k)

Source: 316 Neb. Admin. Code ch. 24, § 338.01