Similar to federal income tax exemption, the University of Nebraska is not subject to state income tax as dual status entity under sections 501(a) and 115 as a State Institution for the State of Nebraska, but the University of Nebraska System is subject to unrelated business taxable income imposed by the Internal Revenue Code (IRC) section 511(a)(2)(B). Therefore, the University of Nebraska is liable for state income tax on unrelated business taxable income.
State tax compliance for the University of Nebraska System includes preparation of Form 1120N: Nebraska Corporate Income Tax Returns. In addition to this annual state filing, the University of Nebraska System Tax Department is responsible for filing all state income tax returns of the subsidiary and affiliated entities for the University of Nebraska System.
The University of Nebraska System Tax Department provides consultation and guidance on state employment filings, such as Form 941N: Nebraska Income Tax Withholding Return. These filings are completed and submitted centrally through NeBIS, Nebraska Business Information Systems.
The University of Nebraska System is exempt from sales and use tax on gross receipts from goods or services in fulfilling its exempt purpose as an educational institution, it is not exempt from collecting sales tax at the local or state level. The University of Nebraska Tax Department provides consultation and guidance on state and local sales and use taxes. These filings are completed and submitted by the business and finance function at individual campuses.
NU System tax related questions should be submitted to tax@nebraska.edu.
While the University of Nebraska System (UNCA, UNK, UNL, UNMC, and UNO) is exempt from sales and use tax on gross receipts from goods or services in fulfilling its exempt purpose as an educational institution, it is not exempt from collecting sales tax at the local or state level. In locations the University of Nebraska System has established nexus (level of connection), it is responsible for collection, proper accounting, and reporting to applicable taxing authorities.
Please note that affiliated entities of the University of Nebraska System included in the following list have a separate tax identification number. These entities are not exempt under the University of Nebraska System; University Technology Development Corporation, Biomedical Technology Transfer Corp, Kearney University Village Development Corporation, Med Center Development Corporation, National Strategic Research Institute, Nebraska Defense Research Corporation, Nebraska Innovation Campus Development Corporation, NUtech Ventures, UNeMed Corporation, UNeHealth, UNMC Alumni Association, HD Group LLC, Maverick Athletic Fund, University Dental Associates, NE Enterprises, Museum of Nebraska Art, and UNMC Science Research Fund. Please contact the University of Nebraska System tax department at tax@nebraska.edu if you have any questions.
Out of State Sales: When a sale is transacted out of state, the sale may be subject to sales or use tax, and it may trigger additional nexus for the University of Nebraska System.
Sales Tax Reporting: Departments that sell to outside entities and/or individuals must collect sales tax, unless the entity and/or individual has a Nebraska tax exempt certificate.
- Sales that are generally subject to sales tax, include books, magazines, publications, catered meals, clothing, food, fundraisers, medical supplies, merchandise, online sales, photocopies, photographs, prints, shipping, handling, and delivery charges. Please note these are the general rules, and exceptions may apply.
- State of Nebraska Reporting details:
Use Tax Reporting: Tax on the storage, use, or consumption of a taxable item or service on which no sales tax has been paid.
Local Occupation Taxes: The University of Nebraska System is required to collect occupation taxes on applicable sales within the State of Nebraska at the location the product or service is sold. For example, if a campus department is acting as the retailer, we are required to charge the 2% restaurant/bar occupation tax. If your department sells food, please contact the tax department at tax@nebraska.edu.
Local Occupation Taxes: Many cities (Omaha, Lincoln, Kearney, Grand Island, Fremont, etc.) within the State of Nebraska impose occupation taxes at the local level on hotel accommodations, food, beverage, telecommunication, and/or vehicle rentals. The University of Nebraska System is exempt from these taxes under the Nebraska Revenue Act of 1967 as amended from time to time. The specific city taxes and rates vary throughout the state. Click here for Nebraska Department of Revenue Occupation Taxes.
- Hotel/Motel Occupation Tax: Imposed on hotel rooms with overnight stays. This tax does not apply to rental of conference rooms, e.g. ballrooms, banquet room, reception rooms, or meeting rooms. If a department is booking rooms for overnight guests on behalf of the University of Nebraska System, a copy of the Nebraska Exempt Sale Certificate must be provided to the vendor, instructions for obtaining this document are below.
- Restaurant/Bar Occupation Tax: Imposed on goods purchased from restaurants and bars. If a department is purchasing on behalf of the University of Nebraska System, a copy of the Nebraska Exempt Sale Certificate must be provided to the vendor, instructions for obtaining this document are below.
-
Vehicle Rental Occupation Tax: Imposed on the rental of vehicles. If a department is renting on behalf of the University of Nebraska System, a copy of the Nebraska Exempt Sale Certificate must be provided to the vendor, instructions for obtaining this document are below.
Please note: The University of Nebraska System must be billed directly for this charge. If a personal credit card is used to pay for the rental car, even if the rental is for University of Nebraska System business, the tax must be paid.
- Telecommunication Occupation Tax: Imposed on any telecommunication service (telephone cards, prepaid cards) or sale of telecommunication equipment (phones, pagers). Telecommunication equipment does not include computers, routers, or hubs. If a department is purchasing on behalf of the University of Nebraska System, a copy of the Nebraska Exempt Sale Certificate must be provided to the vendor, instructions for obtaining this document are below.
Nebraska & Other State Exemption Certificates: These forms can be obtained by contacting Procurement (P2P) on each campus.
Please note that voluntary student organizations and affiliated entities are not exempt from sales and use tax under the University of Nebraska System exemption. These organizations must obtain a separate exemption.
