Closing Your Business in Nebraska

Nebraska Change Request, Form 22, is used to cancel any or all of the following tax programs:

• Corporation Income Tax	• Partnership Income Tax	• Unstamped Cigarette Transporter
• Fiduciary Income Tax	• Sales Tax	• Use Tax
• Financial Institution Tax	• Severance & Conservation Tax	• Waste Reduction & Recycling Fee
• Litter Fee	• Tire Fee	• Wholesale Cigarette Dealer
• Lodging Tax	• Tobacco Products Tax	• Withholding Tax

You are required to file tax returns for all tax periods through the date of your last transaction or last wage payment. You must file a final return if you:

• Cease business operations;
• Sell, transfer, or assign your business; or
• Change the form of your business (for example, from a sole proprietorship to a corporation), which requires registration of the new entity.

A final return must be filed within 20 days after you cease business operations or the sale, transfer, or change occurs.

Employers who cancel their income tax withholding account within 30 days after discontinuing business must file a final Nebraska Reconciliation of Income Tax Withheld, Form W-3N, and attach the state copy of each Federal Form W-2, Wage and Tax Statement, that was issued to each employee.

You can also cancel your business license by checking the box on your final return. If you are licensed for more than one tax program, you will need to check this box on EACH final return.

Purchasers of a business beware – You could be buying a debt to the Nebraska Department of Revenue! When purchasing an existing business, or assets of an existing business, you may be held liable for unpaid taxes owed by the business to the Department at the time of sale.

Even if the purchase contract includes a statement that the seller’s business is free and clear of all encumbrances, you need to verify that there is no tax due with the Department. A certificate of clearance can be obtained by requesting in writing a notification, either stating that no tax is due (certificate of clearance), or identifying the amount of taxes owed.

Send a letter requesting the certificate to:

State of Nebraska
Department of Revenue
Compliance Division
PO Box 94609
Lincoln NE 68509-4609

The letter should include the business name, address, Federal and Nebraska ID numbers, and a copy of the purchase agreement.

Purchasers of a business must withhold sufficient money from the purchase price to ensure that all taxes owed by the previous owner to the Nebraska Department of Revenue have been paid. Failure to withhold a portion of the purchase price may result in the purchaser becoming personally liable as the successor for any taxes that might be due.

Money which is to be paid to the seller will not be available to other lienholders until the Tax Commissioner certifies there is no tax due.

For more information, see REG-1-073, Discontinuation of Business, or the information guide "Statutory Responsibilities for Collecting, Reporting, and Remitting Nebraska Taxes."

Additional information regarding closing your business may be found here: