Nebraska
Updates
What You’ll Learn
If you’re a nonprofit in Nebraska, or you’re a nonprofit considering fundraising or other activities in Nebraska, you must understand the requirements that Nebraska has established for nonprofits operating in the state.
How can you become familiar with these laws? Where should you start?
Start here. This state profile includes the basic requirements nonprofits must consider. Reading the profile and implementing appropriate compliance measures will help you prepare your organization for success in Nebraska.
Getting to Know the State Nonprofit Corporation Law
Background
*Important primarily for nonprofits incorporated in Nebraska
Emma Woodhouse, handsome, clever, and rich, with a comfortable home and happy disposition, seemed to unite some of the best blessings of existence; and had lived nearly twenty-one years in the world with very little to distress or vex her. She was the youngest of the two daughters of a most affectionate, indulgent father; and had, in consequence of her sister’s marriage, been mistress of his house from a very early period. Her mother had died too long ago for her to have more than an indistinct remembrance of her caresses; and her place had been supplied by an excellent woman as governess, who had fallen little short of a mother in affection.
- Emma, Jane Austen
When reading a novel, we get to know a fictional character by the author’s description. The author tells us about the character’s appearance, purpose, actions, mannerisms, and values.
Nonprofit corporations are something like fictional characters.
We learn how a nonprofit will look and act and make decisions not by reading a novel, but by reading the state law (called the nonprofit corporation act) and the rules the nonprofit makes for itself (called the bylaws and articles of incorporation). The law and the organization’s own rules tell us the organization’s name, purpose, way of acting, and method of making decisions.
To get to know your own nonprofit, be sure to review the sections below.
State Nonprofit Corporation Law
Corporate Governance
Conflict Transactions: Neb. Rev. Stat. § 21-1987; Need to review the basic best practices for conflicted transactions? See Bylaws Module 14: Conflicts of Interest.
Director Standards of Conduct: Neb. Rev. Stat. § 21-1986; Need a refresher on the role of directors? See Bylaws Module 6: Directors.
Members: Eligibility and Statutory Powers: Neb. Rev. Stat. § 21-1938; Neb. Rev. Stat. § 21-1941; Not sure what a “member” is? Need to review the basics? See Bylaws Module 5: Members.
Indemnification: Neb. Rev. Stat. § 21-1998; Neb. Rev. Stat. § 21-19,102; Not sure what “indemnification” is? Need to review the basics? See Bylaws Module 8: Indemnification.
For Religious Nonprofits
Nonprofit Religious Corporations Act: Nebraska’s nonprofit corporation law acknowledges the ability of nonprofit corporations to incorporate for religious purposes but does not include specific provisions to protect religious nonprofits’ right to self-government in internal affairs or an option to incorporate expressly as a nonprofit religious corporation. Express deference to religious doctrine in Neb. Rev. Stat. § 21-1919. Confused about what it means to be a religious nonprofit corporation? See our whitepaper “Why a Religious Corporation?”
Reliance on Religious Guidance in Governance: Nebraska law permits a director to rely on guidance from religious figures within his or her faith tradition in the fulfillment of the director’s fiduciary duties. Neb. Rev. Stat. § 21-1986(b)(4)
Understanding Religious Liberty in this State
Case Study
*Important for all nonprofits doing business in Nebraska, whether incorporated in Nebraska or elsewhere
The religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.
- Our Lady of Guadalupe School v. Morrisey-Berru, 140 S. Ct. 2049 (2020).
Sometimes, the state or local government (like the city or county) makes laws that could conflict with your organization’s free exercise of religion or its sincerely-held religious beliefs.
For example, a law might require employers not to make faith-based distinctions between job candidates. If your organization’s mission is to pass on the teachings of your faith, you will need to make faith-based distinctions in evaluating candidates because their faith commitments will impact their abilities to partner in your mission and witness the faith to your program participants.
So what do you need to do? Be aware of the laws listed below. If any of the laws impact your organization—for example, if you are an employer or a facility open to the public—learn more about how you can protect yourself by reviewing Napa Legal’s religious liberty resources. Talk to an attorney if you have specific concerns.
Religious Liberty Protections
State Religious Freedom Restoration Act: Nebraska has not enacted a RFRA and has enacted nondiscrimination laws that conflict with the beliefs of many religious organizations. Not sure what a “religious freedom restoration act” is? Click here to learn the fundamentals.
State Constitutional Protection of Free Exercise: The Nebraska Constitution follows in “lockstep” with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment. Neb. Const., art. I, § 4; art. XIII, § 4
Blaine Amendment: The Nebraska Constitution contains a Blaine Amendment that broadly restricts the ability of faith-based organizations to participate in public benefit programs on the same terms as similarly situated secular institutions. Current U.S. Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes. See Neb. Const., art. I, § 4; art. XIII, § 4 - hostile to state support of religious schools. Not sure what a Blaine Amendment is? Review the basics here.
Other Relevant State Laws and Regulations
Nebraska currently has a statewide public accommodation law. The law includes broad protections for the free exercise of religious organizations. Be sure you understand this and any similar local regulations that may apply to your organization.
Religious Freedom and Public Accommodation Laws: Nebraska’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities but provide strong accommodations or exemptions. Neb. Rev. Stat. § 20-132; Neb. Rev. Stat. § 20-133; Not sure what a public accommodation law is or what it means for your organization’s religious liberty? Learn the basics in this article which discusses the issue in the context of the case Fulton v. City of Philadelphia.
Protections for Religious Exercise in State of Emergency: Nebraska law has no explicit constitutional or statutory protections for religious exercise during a time of emergency.
Key Employment Laws and Regulations
In addition to tracking with the protected classes in the federal anti-discrimination employment law, Title VII of the Civil Rights Act of 1964, Nebraska prohibits employers from discriminating on the basis of disability and marital status. An employer is any person who has fifteen or more employees for twenty or more weeks each year. The requirements do not apply to religious corporations with respect to the employment of individuals to carry out the religious mission. An attorney can help you understand what requirements apply to your organization.
Religious Freedom for Faith-Based Employers: Neb. Rev. Stat. § 48-1103; Neb. Rev. Stat. § 48-1104; Need to review the basics on religious freedom and employment matters? Walk through a self-audit of best practices here.
Religious Freedom for Employees: Not present
Conducting Activities or Programs in this State
Understanding the Business Registration Requirement
*Important primarily for nonprofits doing business in Nebraska but incorporated elsewhere
If you are fundraising or conducting activities in this state, you must consider whether you need to register as a foreign nonprofit corporation. The state law requires entities to register before transacting business in the state. An attorney can help you decide whether you need to register based on the type and volume of activities you have in this state.
Business Registration Statute
Fundraising and Charitable Registration in This State
How to Know (And What to D0) If You're Fundraising In This State
*Important for both Nebraska and Foreign Nonprofits
Not sure what “charitable registration” is? Need to review the basics? Read this article for a refresher.
Charitable solicitation registration is no longer required in Nebraska. Be sure to review other state registration and tax requirements, and stay apprised of updates by visiting the applicable state agency's website.
If You're Fundraising In Multiple States, Make Sure You Understand the URS
Not applicable
Evaluate Whether You'll Need a Registered Agent
Not applicable
Follow the Rules About Communicating with the Public
This state does not require organizations to post specific language when conducting charitable solicitations unless the organization is working with a professional fundraiser.
Charitable Registration Statute
Not present
Charitable Registration Exemption Statute
Not present
Annual Report Requirement
Not present
Audit Requirements: Nebraska has no charitable registration requirement, and therefore no audit requirement.
Get Acquainted with State and Local Taxes and Exemptions
State and Local Taxes
*Important for all nonprofits doing business in Nebraska, whether incorporated in Nebraska or elsewhere
In this state, organizations which have received federal income tax exemption under IRC § 501(c)(3) are automatically exempt from state income tax. Some organizations may choose to send a copy of their IRS determination letter to the state department of revenue to indicate the organization’s position that it qualifies for the exemption. Note that, although an organization may be exempt, if it has unrelated business taxable income (“UBTI”) that is subject to federal taxation, that UBTI may be subject to state income tax. See Title 316 Neb. Admin. Code, ch. 24, Reg -24-003.003. See also Neb. Rev. Stat. § 77-2714.
It is also important to consider whether your organization might be eligible for sales and use tax or property tax exemption. In this state, federal § 501(c)(3) status does not automatically provide an exemption from sales, use and property taxes. Nebraska offers a sales and use tax exemption for both sales by and purchases by eligible faith-based nonprofits. Organizations must apply to receive the exemption. Information regarding sales and use tax exemption is available from the Nebraska Department of Revenue. Nebraska has a broad property tax exemption for religious nonprofits, which is available upon application. More information regarding property tax exemption is available from the local government. For an example, see this guidance from the Douglas County Assessor/Register of Deeds. An accountant or attorney can provide answers to specific questions regarding your organization’s eligibility for exemption.
Corporate Income Tax Statute
Nebraska imposes a statewide corporate income tax but automatically exempts organizations with federal 501(c)(3) exempt status. Neb. Rev. Stat. § 77-2734.02
Corporate Franchise Tax Statute
Nebraska does not have a franchise tax statute. Nebraska has an occupation tax applicable to for profit corporations. See Neb. Rev. Stat. § 21-303. Nebraska does require nonprofit corporations to file a biennial report (which has a filing fee.) See Neb. Rev. Stat. § 21-19, 172.
What You Need to Know About Sales Tax
Sales and Use Tax: Nebraska imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items. Nebraska imposes a sales and use tax on religious organizations’ purchases but generally provides a broad and comprehensive, entity-based tax exemption for 501(c)(3) religious organizations’ purchases upon application. Neb. Rev. Stat. § 77-2704.12(1)(a); see also Title 316 Neb. Admin Code, ch. 1, Reg-1-091
State Tax Treatment of Unrelated Business Income: Title 316 Neb. Admin. Code, ch. 24, Reg -24-003.003.
Property Tax: Nebraska imposes property tax but, upon application, generally provides an exemption to religious organizations for property used for religious and/or charitable purposes. Neb. Rev. Stat. § 77-202(1)(d); Neb. Rev. Stat. § 77-202.01
State-Specific Special Requirements
Miscellaneous
Useful Links
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Legal Disclaimer
This resource contains general educational information related to legal concepts, but this information does not constitute legal advice. Anyone seeking legal advice is strongly encouraged to consult with a licensed attorney regarding any of the matters discussed herein. Although licensed attorneys work with Napa Legal, Napa Legal is not a law firm and does not undertake legal representation on behalf of any clients. Further, no licensed attorney working with or on behalf of Napa Legal agrees to undertake legal representation on behalf of any client unless the terms of such representation are set forth in a separate, written representation agreement.
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**Please note that the following state profiles are forthcoming and will be published soon:Hawaii and Washington