Starting a Nebraska business could be the first step in making you independently wealthy, or helping you achieve your highest career aspirations. However, there are some legal and formal requirements you’ll need to make before you can start generating revenue. First, you should familiarize yourself with the kind of business environment that Nebraska offers to entrepreneurs. The state of Nebraska is home to 172,958 small businesses as of 2018, which ultimately represent 99.1 percent of all Nebraska businesses. They employ more 46.7 percent of Nebraska’s total workforce, which translates to 406,745 employees.
Steps to Obtaining a Tax ID (EIN) Number and Registering a Nebraska Business
- Forming a Business in Nebraska
- Federal Tax ID (EIN) Number Obtainment
- Nebraska State Tax ID Number
- Localized Licenses and Permits in Nebraska
When deciding how to structure your Nebraska business, consider the following options; here are the most common business structure options:
- Sole proprietorships and partnerships. Sole proprietorships and partnerships are fairly straightforward business structures, and they’re similar in nature. The main difference is that sole proprietorships only involve one person, while partnerships involve more than one. These are easy to start, and taxes are easy to understand; you’ll simply pay taxes on any business income you make as an individual. However, you’ll be exposed to personal liability; with no means of protection, any debts you take on will be debts of your own, and you could be held legally responsible for actions you take for the business.
- Limited liability companies (LLCs). LLCs are so named because they provide some degree of liability protection, which makes them a step up from sole proprietorships and partnerships. They’re treated as separate legal entities that can take on debts and be held responsible for certain legal matters. They’re also considered "pass-through" entities for tax purposes. They don’t pay taxes on income they generate, but instead, you’ll pay taxes as an individual on money you made from the business. In Nebraska, LLCs are required to fill out and submit biennial reports in odd-numbered years.
- Corporations. Corporations are more complex because they offer some additional business perks. They can issue public shares, which is useful for raising capital, but this means they’re subject to tighter rules and regulations. They’re treated as separate legal entities like LLCs, and provide significant liability protection. This makes them ideal for larger companies. However, they’re also subject to double taxation; corporations are required to pay taxes on eligible income they generate, and owners and shareholders must also pay taxes on money they make from the business. In Nebraska, the corporate income tax rate is 5.58 percent for any income up to $50,000 per year, and 7.81 percent on any income above that threshold.
You can change your business’s structure later on in its development, but it’s much more efficient to choose the best structure from the beginning.
Your Nebraska business will most likely need an employer identification number (EIN), casually referred to as a federal tax ID number. It’s a 9-digit number that’s unique to your business, similar to a social security number. You’ll get this number when you register with the federal government. It’s a requirement for any business with multiple members (like an LLC, partnership, or corporation) and for any business that’s going to hire employees. You’ll need one to open a business bank account, apply for a loan, or apply for a business license or permit.
Getting a federal tax ID can be easy, if you use the right method. For example, you can make use of our federal tax ID number obtainment services to get your federal tax ID in less than an hour. All you have to do is fill out our online application, and you’ll get your tax ID by email in an hour or less.
Your Nebraska business may also need a state tax ID number. As the name suggests, this is like a federal tax ID number, but it’s a unique identifier that applies at the state level (and when you register with the state government). You’ll need a Nebraska state tax ID number if you’re going to hire employees in the state of Nebraska, if you’re selling taxable goods and services in the state, or if you’re going to owe excise taxes on certain regulated goods.
You’ll need a federal tax ID number before you can get a Nebraska state tax ID number, so secure that first. When you have it, make use of our Nebraska state tax ID number obtainment services to get your number as quickly as possible. Fill out our online application, and you’ll receive your state tax ID number in just 4 to 6 weeks.
Do note that many Nebraska businesses will be required to get a license, permit, or other form of certification before they can legally begin operations. However, there isn’t a single, generic license that will cover all your needs at the state level. There are many different departments, some at the local level and some at the state level, that may issue the documents you need. The rules for business licensure may vary wildly from area to area, and from industry to industry. To resolve some of this confusion, you can talk to your local Chamber of Commerce. They should be able to help you determine which licenses or permits you may need. If you have your federal tax ID number, you may be able to apply for them on the spot.
The economic growth rate in Nebraska is slightly slower than the national average, at 1.9 percent. However, this represents a recovery, since the state’s growth rate was down to 0.9 percent as of 2016. Small businesses are one of the driving economic forces in Nebraska, responsible for adding 11,211 net new jobs in 2018, and many industries are well-represented in the state, including healthcare and social assistance, retail trade, and accommodation and food services.
Start your Nebraska business sooner by applying for your tax IDs online. Make use of our federal tax ID number and Nebraska state tax ID number obtainment services, and make your business legal as soon as possible.