Nebraska City Occupation Taxes: What They Are, Which Cities Charge Them and Rates in Omaha, Lincoln, Kearney and Fremont
Nebraska City Occupation Taxes: What They Are, Which Cities Charge Them and Rates in Omaha, Lincoln, Kearney and Fremont
If you plan to open a restaurant, bar, hotel or other business that sells to the public in a Nebraska city, you will likely run into the term occupation tax. Nebraska has no general state business license and no county business license, so local taxes and activity-specific registrations are often the first local obligations you deal with. A city occupation tax is one of them, and each city sets its own. This guide explains what the tax is, what Nebraska law allows, which cities charge one and what the current rates are in Omaha, Lincoln, Kearney and Fremont.
What a Nebraska Occupation Tax Is
A city occupation tax is a local tax on a specific business activity inside city limits. The most common examples are restaurant and bar sales and hotel or motel lodging. Fremont, for example, calls its restaurant charge a prepared food and beverage tax. The tax attaches to the activity, so the legal form of the business, whether sole proprietorship, LLC or corporation, does not decide whether it applies.
Do not confuse this with the state corporate occupation tax. Corporations file a Biennial Report and Occupation Tax with the Nebraska Secretary of State. That is a state filing, not a city tax. The tax starts at a statutory minimum of $26, charged when paid-up capital stock does not exceed $10,000, and rises with paid-up capital stock.
What the Law Allows
Nebraska law authorizes every class of city and village to levy occupation taxes under Neb. Rev. Stat. 14-109, 15-202, 16-205, 17-525 and 18-1208. Each city sets the rate and the base by ordinance. The amount is not capped by statute, a point addressed in Anthony, Inc. v. City of Omaha (2012). In practice, the rate in one city can differ sharply from the rate in the next.
Three rules limit or shape the tax:
- No second tax on certain sales. Under LB 474 of 2014, a city cannot add a second tax on fuel, cigarettes or alcohol sales as such. Read the ordinance to see exactly which activity it covers.
- Sales tax treatment. An occupation tax that is itemized on a customer's bill is part of gross receipts for sales tax purposes, so it can change the sales tax you report. Confirm the treatment with the Nebraska Department of Revenue before you configure your point-of-sale system. The state sales tax rate is 5.5%.
- Annual report. A city that adds or raises an occupation tax after June 5, 2025 must post an annual report on that tax under Neb. Rev. Stat. 18-1208. If you are opening in a city that recently changed its tax, ask the city clerk or finance office for the report.
Which Cities Charge Them
Nebraska has 93 counties and 528 municipalities, which are cities and villages. Every class of city and village may levy an occupation tax, but each one decides whether to use that authority. Restaurant or lodging occupation taxes are charged in Omaha, Lincoln, Kearney, Fremont, La Vista, Norfolk and Grand Island. Omaha, Norfolk and Grand Island tax restaurants, and Omaha also taxes lodging. La Vista taxes restaurants at 1% under Ordinance 1365.
That list is not a census of Nebraska's 528 cities and villages. If you will operate in a smaller community, check that city's ordinances directly. Do not assume that a neighboring city's rules apply.
Current Rates in Omaha, Lincoln, Kearney and Fremont
The figures below come from city sources as of the dates shown. Cities amend ordinances, so confirm each rate with the city before you set prices or file returns.
| City | Activity | Rate | Source and date |
|---|---|---|---|
| Omaha | Restaurants | Confirm with the City of Omaha Finance Department | Omaha has no general business license, only occupation taxes on specific activities |
| Omaha | Lodging | Confirm with the City of Omaha Finance Department | Same office; confirm the rate and the base |
| Lincoln | Restaurants and bars | 2% | City of Lincoln page archived March 13, 2025 |
| Lincoln | Hotels and motels | 4% | City of Lincoln page archived March 13, 2025 |
| Kearney | Restaurants | 1% | Voter approved in 2014 |
| Kearney | Hotels | 3% | City of Kearney page, 2026 |
| Fremont | Prepared food and beverage | 1.00% | In effect since April 1, 2022; city page, 2026 |
Omaha
Omaha does not issue a general business license. It levies occupation taxes on specific activities, including restaurants and lodging. This guide does not state an Omaha rate or base, because the figure was not verified for this article. Contact the City of Omaha Finance Department for the current rate, the base the tax applies to and any registration you must complete.
Lincoln
Lincoln charges 2% on restaurant and bar sales and 4% on hotel and motel stays. Those figures come from a city page archived on March 13, 2025, so they are the ones most likely to have changed since. Confirm them with the City of Lincoln before you rely on them in a business plan or a price sheet.
Kearney
Kearney's 1% restaurant tax was approved by voters in 2014. The city's 2026 page lists a 3% hotel rate. Because the restaurant tax went through a public vote, you may find it discussed in local coverage from that period, but the current ordinance controls.
Fremont
Fremont's prepared food and beverage tax has been 1.00% since April 1, 2022, according to the city's 2026 page. Ask the city whether the base includes beverages sold without food, and how the charge should appear on receipts.
Occupation Taxes Versus Other Registrations
An occupation tax is one of several requirements. Nebraska handles registration by activity rather than through a single business license:
- Department of Revenue: Register for a Nebraska ID for sales tax and income tax withholding. A sales and use tax permit is needed for retail sales, renting or leasing tangible personal property, or providing taxable services. A withholding certificate is needed if you have employees.
- Department of Labor: Unemployment tax and contractor registration.
- Secretary of State: Entity filings and trade names. A new LLC files a Certificate of Organization with the Secretary of State for $100 online or $110 in the office. New LLCs and corporations must publish a notice in a legal newspaper for three successive weeks and file proof of publication with the Secretary of State. Nebraska uses the term registered agent, and the agent must maintain a Nebraska office.
- Occupational licensing by agency or trade: The State Electrical Division licenses electricians. Plumbers are licensed by the city or village nearest the job. The Department of Agriculture permits food and pesticide applicators. DHHS licenses health professions and child care. The Public Service Commission regulates only passenger carriers and household goods movers. The Liquor Control Commission works with the city or county that grants retail liquor licenses.
- Local: City sales taxes, city occupation taxes, and city and county zoning.
Entity filings also carry recurring deadlines. LLCs file a biennial report in odd-numbered years between January 1 and April 1, at $25 online or $30 on paper. Corporations file in even-numbered years, with the report due March 1. A trade name registration with the Secretary of State lasts 10 years.
How to Check Whether Your City Charges One
- Identify the exact activity you will perform, such as serving meals, selling drinks or renting rooms.
- Search the city's ordinances and finance office pages for an occupation tax covering that activity.
- Contact the city finance office and ask for the current rate, the base the tax applies to, whether you must register, and when returns are due.
- Ask how the tax appears to customers and how it affects your sales tax reporting. Confirm that answer with the Department of Revenue.
- If the city recently added or raised the tax, request its annual report under Neb. Rev. Stat. 18-1208.
- Get the answers in writing before you open or start charging customers.
Official Resources
- Nebraska Secretary of State, Business Services Division
- Nebraska Department of Revenue
- Register your new business online with the Department of Revenue
- Nebraska Business Development Center, University of Nebraska at Omaha
- U.S. Small Business Administration, Nebraska district
Disclaimer
This article is informational content only. It is not legal, tax or accounting advice, and reading it does not create an attorney-client relationship. City occupation taxes change by ordinance, so verify every rate and deadline with the city, the Department of Revenue or the Secretary of State before you act. For a complex situation, such as multiple locations, a mix of taxable activities or an entity election, consult a qualified Nebraska attorney or certified public accountant.