Learn more about keeping your business compliant with sales tax requirements.
The Nebraska sales and use tax rate is 5.5 percent. In addition, make sure you contact your local governments in Nebraska because they are allowed to assess an extra local sales and use tax of 0.5, 1, or 1.5 percent.
This tax is imposed on gross receipts from the following activities:
The tax also applies to the renting or furnishing, for periods of less than 30 days, of rooms or accommodations in hotels, motels, etc.
The lease or rental of tangible personal property at retail in Nebraska is subject to sales and use tax. Tax on a conditional sale is due on the full contract price at the time the contract is entered into. An agreement is considered a conditional sale if one or more of the following conditions are present:
In Nebraska the sales tax is imposed on the consumer although the retailer is required to collect the tax. The sales tax required to be collected is a debt owed by the retailer to the state.
Absorbing the tax is prohibited. It is against the law in Nebraska to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.
In Nebraska any person conducting business as a seller must apply for a permit for each place of business. An application for a permit is made on the form prescribed by the Nebraska Commissioner, and there is a $10 fee. A permit is not assignable and is valid only for the person in whose name it is issued and only for transacting business at the designated place.
Nebraska has many specific items that are exempt from sales tax — for example, certain prescription medications are exempt from Nebraska sales tax. You'll want to check and see if you are exempt from the sales tax.
An exemption certificate may be issued by a purchaser of a nontaxable item. The exemption certificate may be based on the type of transaction (such as a resale exemption) or on the item itself.
In Nebraska the sale of tangible personal property for the purpose of resale is not subject to tax. Sales are considered made for resale when you give the seller a resale certificate.
Requirements for resale exemption certificates. The Department of Revenue recognizes only the Nebraska resale certificate, Form 13, or a previously approved substitute, such as the multijurisdictional Uniform Sales and Use Tax Certificate of the Multistate Tax Commission. The exemption certificate must be presented in good faith and include the following information:
Sellers may accept blanket certificates from a purchasers who repeatedly purchase the same type of property for resale. However, sellers take at their own risk a blanket certificate. The blanket certificate covers future sales for no longer than three years from the date of issuance.
Nebraska has a statute that specifically taxes out-of-state mail order and catalog sellers. However, you will be responsible for paying this tax only if you have physical presence within Nebraska. To determine if you have physical presence, ask yourself the following:
The bracket system may be followed by sellers in computing the sales tax. Assuming a combined state and local rate of 5.5 percent, the tax is computed on each dollar and/or fraction of a dollar according to the following table:
|Amount of Sale||Tax|
|$0.00 to $0.09||no tax|
|0.10 to 0.27||$0.01|
|0.28 to 0.45||0.02|
|0.46 to 0.63||0.03|
|0.64 to 0.81||0.04|
|0.82 to 0.99||0.05|
|1.00 to 1.18||0.06|
|and so forth|
The sales price of property returned by your customers may be deducted from gross receipts if the full sales price is refunded. You take the deduction on the return for the period in which the refund was made. A refund claim must be filed on a form prescribed by the Commissioner within three years from which the overpayment was made.
The use tax complements the sales tax and is imposed on the storage, use, or other consumption in Nebraska of tangible personal property. The use tax is imposed when the property is purchased, leased, or rented from any retailer and on any transaction subject to sales tax when the sales tax has not been paid. In Nebraska property brought into the state on which a sales or use tax has been paid in another state equal to or in excess of the Nebraska tax is not subject to tax in Nebraska.