Nebraska taxes the office building you clean and leaves the house next door alone

Nebraska is among the more business-friendly plains states for commercial cleaning operators: right-to-work protections, no local income taxes in any city, and a workers' compensation system that is straightforward to navigate. The state does, however, impose sales tax on commercial cleaning services under a specific statutory provision, and that obligation must be addressed before the first invoice is sent. Nebraska's combination of competitive labor costs, a simple business licensing structure, and relatively low WC rates makes it an attractive market — so long as tax compliance is dialed in from day one.

Business Registration and Licensing

Commercial cleaning companies must register their legal entity with the Nebraska Secretary of State, Business Services Division, P.O. Box 94608, Lincoln, NE 68509 (phone: 402-471-4079). LLC formation costs $100; corporations pay $60 for the first $10,000 of authorized capital plus $0.30 per $1,000 above that. Biennial reports for LLCs are $10. No statewide license is required specifically for janitorial businesses, but Omaha requires a city contractor license through the Omaha Planning Department for businesses performing services within city limits. Lincoln requires a general business license through the City Clerk's office. Confirm municipal requirements in each city where you maintain a branch or regularly service accounts.

Sales Tax on Cleaning of Nonresidential Property

Nebraska imposes sales and use tax on the "cleaning, washing, or polishing of tangible personal property" and on specific real property services. Under Neb. Rev. Stat. § 77-2701.16, "service" includes "the cleaning, maintenance, and servicing of . . . nonresidential property." The Nebraska Department of Revenue and its revenue regulations confirm that janitorial and cleaning services performed on nonresidential (commercial) property are subject to the 5.5% Nebraska sales and use tax. Residential cleaning services are generally not taxable. The statewide rate is 5.5%; municipalities may impose an additional local sales tax of 0.5%–2.5% — Omaha adds 1.5% for a combined rate of 7.0%, while Lincoln adds 1.5% for a 7.0% total. You must register with the Nebraska Department of Revenue for a sales tax permit before invoicing any commercial client. Collecting and remitting sales tax is your responsibility, not the client's. Cleaning supplies you consume while performing taxable services are themselves taxable at purchase — you cannot use a resale exemption for consumed supplies.

Workers' Compensation — One-Employee Threshold

Under Neb. Rev. Stat. § 48-106, the Nebraska Workers' Compensation Act applies to every employer with one or more employees. Coverage becomes mandatory the moment you hire your first person. Nebraska is an open-market (competitive) state — WC insurance is purchased through licensed private carriers; there is no state fund. The NCCI class code for commercial janitorial contractors is 9014. Violations of the WC coverage requirement can result in civil fines of $1,000 per day, potential business closure, and personal liability for all WC benefits owed. Sole proprietors without employees are exempt from mandatory coverage but may elect coverage voluntarily. Corporate officers owning 25% or more of voting shares may file a written exclusion with their carrier. The Nebraska Workers' Compensation Court is the exclusive forum for disputed WC claims in Nebraska — it is a standalone judicial body separate from the district court system.

Right-to-Work in Nebraska

Nebraska has been a right-to-work state since 1946, enshrined in its state constitution under Article XV, § 13. No employee can be compelled to join a union, pay union dues, or pay a "maintenance of membership" fee as a condition of employment. For building service contractors, this eliminates the threat of mandatory union-security clauses and simplifies the employment relationship. Nebraska's right-to-work protection is at the constitutional level — stronger than simple statutory protection and not subject to legislative reversal without a constitutional amendment. When contracting with large commercial clients — particularly in Omaha, which has an active SEIU presence in some janitorial sectors — include clear language in your employment agreements explaining that employment is not conditioned on union membership.

Nebraska Department of Labor — Wage and Hour Compliance

The Nebraska Department of Labor (NDOL), 550 S. 16th Street, Lincoln, NE 68508 (phone: 402-471-9000), oversees wage payment, child labor, and UI. Nebraska's minimum wage is $10.50/hour as of January 1, 2023, rising to $12.00 on January 1, 2024, $13.50 on January 1, 2025, and $15.00 on January 1, 2026 (per the 2022 ballot initiative). For cleaning companies employing minimum-wage workers, model these increases into multi-year contract bids. Nebraska has no mandatory paid sick leave, paid family leave, or pay transparency requirements as of mid-2025. NDOL also administers the UI program; new employer rates are set at approximately 1.25% on the first $9,000 of each employee's wages. Final paychecks must be issued on the next regular payday or within two weeks of termination, whichever is sooner.

Independent Contractor Classification

Nebraska applies a common-law control test for independent contractor classification, not the ABC test. NDOL auditors look at who controls the manner and means of the work, not just the results. Cleaning crews that report to your dispatch, wear your branded uniforms, use your equipment, and are available exclusively to your company cannot plausibly be classified as independent contractors regardless of what their 1099 says. Properly documented subcontractor relationships require the subcontractor to hold their own business license, carry their own WC coverage (provide a COI), provide services to multiple clients, use their own equipment, and operate under a written contract specifying results rather than methods. When in doubt, classify as an employee — retroactive UI, WC, and state income tax withholding penalties are costly.

Bond and Insurance Requirements

Nebraska has no statewide mandatory bond for commercial cleaning operators. State agency and municipal contracts typically require performance bonds for service contracts above $50,000 and fidelity bonds covering employee dishonesty of at least $10,000–$25,000 per occurrence. The Nebraska Department of Administrative Services — State Purchasing Bureau — handles state contracts and lists insurance minimums in each solicitation. Healthcare facility contracts (Nebraska Medicine, CHI Health, Bryan Health) generally require $2,000,000/$4,000,000 general liability coverage. Commercial property management companies in Omaha typically require $1,000,000/$2,000,000.

No PFAS or Special Chemical Law for Nebraska BSCs

As of mid-2025, Nebraska has not enacted a PFAS-in-products reporting or ban statute. Federal TSCA regulations apply to manufacturers and distributors, but Nebraska does not add a state-level overlay. OSHA enforcement in Nebraska is federal (Nebraska is not a state-plan state). Nebraska does maintain a Right to Know Law requiring employers to maintain SDSs for hazardous chemicals in the workplace and to provide employee training — this applies to all cleaning chemical inventories. The Nebraska State Fire Marshal may inspect chemical storage for flammable cleaners if your company operates a warehouse or centralized supply depot. In the absence of PFAS or advanced chemical laws, Nebraska cleaning companies have flexibility in product selection that Minnesota- or Maine-based operators do not, but documenting product safety data and conducting annual employee right-to-know training remains mandatory.

Local / metro cleaning business licenses

City and metro rules sit on top of Nebraska statewide requirements. Use the state sections above for entity, workers’ compensation, and tax — then open the metro page for municipal fees and agencies.

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