Nebraska Sales Tax License Revocation / Business Shutdown Checklist

Nebraska Sales Tax License Revocation / Business

Shutdown Checklist

What Sales Tax Permit Revocation Means

A Nebraska sales tax permit revocation is a formal enforcement action taken by the Nebraska

Department of Revenue to cancel a business’s legal authority to collect sales tax from customers. This action occurs after a formal administrative hearing, where the permit holder must show cause why the permit should not be revoked.

Revocation differs fundamentally from voluntary cancellation, which allows a business owner to close an account by filing Form 22 and submitting final returns without enforcement proceedings. Once the state revokes a permit, the business cannot legally collect sales tax, and any continued operation without a valid license constitutes a separate criminal offense for each day of operation.

Why the Nebraska Department of Revenue Revokes

Permits

The department initiates revocation proceedings under specific statutory authority found in

Nebraska Revised Statutes Section 77-2705. Common triggers include failure to file monthly or quarterly sales tax returns for extended periods, unpaid sales tax or related penalties, invalid business addresses where the state cannot contact the owner, or credible evidence that the business no longer operates.

Consequences of Ignoring a Nebraska Sales Tax License

Suspended or Revoked Status

Operating a business after the state revokes or suspends your sales tax permit creates immediate criminal liability. Each day of operation without a valid license constitutes a separate

Class IV misdemeanor offense under Nebraska Revised Statutes Section 77-2713.

Beyond criminal exposure, the department pursues collection through tax liens filed against business assets or personal property, wage garnishment proceedings, and referrals to collection agencies. Unpaid sales tax liability continues to accrue both the mandatory penalty of

twenty-five dollars or ten percent of the tax due, plus interest at rates published by the department.

What Revocation Does Not Mean

A revocation hearing is a civil administrative proceeding, not an automatic criminal prosecution.

However, willfully failing to collect, account for, or pay sales tax constitutes a Class IV felony punishable by up to 5 years' imprisonment and a fine of $10,000.

Revocation does not forgive or resolve underlying sales tax debt, and the department expects full payment or structured resolution of all outstanding amounts. A business owner whose permit was revoked must apply for reinstatement and pay fees of twenty-five dollars after the first revocation or fifty dollars after subsequent revocations.

Steps to Take After Receiving a Revocation Notice

Confirm Your Status and Gather Records

Contact the department directly to confirm your permit status if you suspect revocation but received no written notice. Request written confirmation showing your current account status, including all assessed sales tax, penalties, interest, and the specific reason for revocation.

Collect all sales tax returns filed within the past thirty-six months, bank statements showing sales activity, payment receipts for tax remittances, and all correspondence from the department. Identify all business owners and obtain both your Federal Employer Identification

Number issued by the IRS and your Nebraska Tax ID Number issued by the state for sales tax purposes.

Identify Outstanding Obligations

Review the revocation notice to identify total amounts owed, including unpaid sales tax, penalties calculated at twenty-five dollars or ten percent of tax due, and interest accrued at published rates. Request a detailed account statement showing assessment dates, calculation methods, and the current total liability.

Determine Filing Compliance

Contact the department to request a list of all unfiled sales tax returns for your business. Identify specific filing periods, gather sales records or bank statements for those periods, and prepare documentation showing when business activity actually ceased if the company closed but returns were not filed.

Understand Personal Liability Exposure

Sole proprietors face automatic personal liability for all business debts, including sales tax obligations. Corporate officers or employees with authority to decide whether the corporation will pay taxes imposed on the corporation become personally liable for willful failure to collect, account for, or pay sales tax under Nebraska Revised Statutes Section 77-2713.

Respond to Notices and Deadlines

Document all communication with the department, including dates, times, and names of representatives contacted. Never ignore stated deadlines for response or payment, even when full payment cannot be made immediately.

Urgent notices regarding wage garnishment, tax liens, or collection actions require immediate response. Ask the department in writing for a list of available payment plan options, penalty abatement requests, and installment arrangements, given your specific circumstances.

Common Mistakes That Worsen Outcomes

Business owners often ignore notices from the department, believing that issues will resolve on their own. Failing to file unfiled returns prevents account closure and resolution, while providing incomplete financial information can delay resolution and may result in estimated assessments.

Operating the business or collecting sales tax after receiving notice of revocation creates criminal violations. Assuming that stopping business operations automatically closes a sales tax account is incorrect, as the department must formally cancel the permit and resolve all outstanding obligations through proper procedures.

Facing State Tax Enforcement Action?

If you’ve received a notice related to sales tax or payroll tax enforcement, and aren’t sure how to respond, our team can help you understand your options and next steps.