Nebraska Sales Tax
Nebraska Sales Tax At a Glance
State rate: 5.5%
Maximum combined rate: 8.0%
Tax Holidays: None
Governing Body: Nebraska Department of Revenue
When your small business makes retail sales to customers in Nebraska, whether you’re based in the state or outside of it, you need to know what Nebraska’s sales tax laws are and how they apply to you. This includes information on whether what you are selling is taxable in Nebraska, whether you have a sales tax nexus, and what rate to charge your customers.
Nebraska Sales Tax Rates
The state sales tax rate in Nebraska is 5.5%, and cities are permitted to add a local sales tax at rates of 0.5%, 1%, 1.5%, 1.75%, or 2%. In addition, Dakota and Gage Counties each impose an additional sales tax of 0.5%, resulting in Beatrice’s highest combined rate of 8.0%.
Nebraska is a destination-based sales tax state, so the appropriate rate to charge your in-state customers is based on their delivery address if you’re shipping their purchase. If you have a physical retail space where your customers come to make purchases, the applicable sales tax rate is whatever’s in force at that location.
Sales Tax Nexus Regulations in Nebraska
Before you can be required to collect Nebraska sales tax on purchases made by in-state customers, your company must have a significant presence, or nexus, in the state. As far as the state is concerned, you have a nexus if you:
- Maintain or occupy an office or place of business in the state
- Have any representative or solicitor in the state for selling, delivering, or taking orders
- Derive rental receipts from leased tangible personal property in the state
- Solicit retail sales from residents of the state on a continuous or systematic basis through the media
- Are owned or controlled by an entity that owns or controls a retailer in the state
- Maintain or have a franchisee or licensee who is a retailer in the state
Additionally, economic nexus is established if you make $100,000 in sales annually to Nebraska residents or if you process 200 or more transactions in the state. Even if you don’t have a nexus, you can voluntarily register to collect and remit Nebraska sales tax on purchases to your customers in the state as part of the Streamlined Sales and Use Tax Agreement (SSUTA), of which Nebraska is a full member state. If you register through SSUTA, you are required to register for all member states at once.
What’s Taxable in Nebrask?
Sales of tangible personal property are taxable in Nebraska, as are admission fees, hotel accommodations, mobile telecommunication services, telephone service, and utilities. Some services are taxable as well, including:
- Production and assembly labor
- Repair and installation labor when the item being worked on is taxable
- Labor to install new or upgraded parts or accessories, including on motor vehicles
- Shipping and handling, as long as the item being shipped is taxable, and except separately stated U.S. postage on direct mail
- Computer consulting services, if they involve the transfer or modification of software
- Training for use of computer software, when paid to the seller of the software
- Labor to paint a motor vehicle
- Pest control services
- Animal specialty services
- Building cleaning and maintenance
- Detective services
- RV park services
- Security services
Groceries are not subject to sales taxes in Nebraska, but prepared food is. Other exceptions and exemptions apply in certain situations, and they generally fall into four categories: retailer-based exemptions, buyer-based exemptions, product-based exemptions, and use-based exemptions. All tax-exempt retail sales must be documented appropriately by providing proof of a valid state-issued exemption certificate presented at the time of purchase.
Nebraska Sales Tax Registration and Filing
To ensure sales tax compliance, you must register for a Nebraska sales tax permit online. For those with existing business relationships in Nebraska, you can also complete Form 20 and mail it to the Department of Revenue. There is no charge to apply for the permit, and you do not have to renew it. Each location will need a separate permit if you have more than one business location.
You can file your sales tax returns and make payments online or by mail. The state will mail out paper forms only to small businesses that have never filed online and are not required to. If you meet these criteria, you will receive your return in the mail on or about the 10th of the month following the close of the period that the return is for. The return is due with your payment on the 20th of the same month.
Returns filed online are also due on the 20th of the month following the close of the period they cover, and the frequency with which you must file will depend on the size of your average monthly tax liability. Businesses with a monthly tax liability of $250 or more will file monthly. Those with an average monthly tax liability between $75 and $249.99 will file quarterly, and those with an average monthly tax liability of less than $75 will file annually.
If you have multiple business locations, you can file one combined return for all of them if the same person or persons own at least 80% of all locations. Regardless of how you file, however, each location is always required to have its own sales tax permit. Before you file a combined return, you must apply for permission from the state.
Nebraska Sales Tax Due Dates and Penalties
Annual filers must submit their returns and payments by January 20th.
Monthly Due Dates
Quarterly Due Dates
|January – March (Q1)||April 20|
|April – June (Q2)||July 20|
|July – September (Q3)||October 20|
|October – December (Q4)||January 20|
Failure to file or make payments on time will result in a penalty of $25 or 10% of the total tax due, whichever is greater. Zero returns are required for as long as you hold a valid Nebraska sales tax permit.
Nebraska Sales Tax Resources
Nebraska Sales Tax Software
Regardless of the volume of taxable sales that you make in Nebraska, keeping up with the requirements for collecting and remitting sales taxes to the state can be a time-consuming and confusing process. And if you sell in multiple states, it’s an even bigger headache, as they each have their own sets of regulations, procedures, and rates. However, this burden can be eased by using a suite of sales tax calculator software designed to manage sales tax collection and reporting.
TaxTools gives you back the time you spend on tracking your taxable sales in Nebraska and elsewhere so that you can use it to focus on other aspects of growing your business. With the ability to produce up-to-date reports on your taxable sales, TaxTools allows you to stay on top of things while also meeting state requirements for record-keeping. The program will also periodically check for changes to state sales tax laws that may impact you, and it allows you to file your sales tax returns and make payments directly. TaxTools integrates smoothly with all eCommerce platforms, so you won’t have to change anything about the way you already do business to take advantage of its benefits.
So, if you’re ready to see how TaxTools can help streamline your business processes, click here to sign up for a free trial today.
Last updated July 2022