When you make retail sales to customers in Nebraska, whether you’re based in the state our 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’re selling is taxable in Nebraska, whether you have a sales tax nexus there, and what rate to charge your customers. In most respects, Nebraska’s laws in this area are similar to those of other states, but it’s important to understand the details of the law in each state that you do business.
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%. Counties can also add a 0.5% option sales tax, but that rate will only be applicable in areas that are not already covered by a local city tax.
That means that in a city that imposes a local tax, that rate can be combined with the state rate to determine the total tax due. If there is no city rate, the state rate can be combined with a county rate, if there is one, to get the total tax due. Currently, Dakota County is the only one in the state to impose its own tax in this way.
Nebraska is a destination-based state when it comes to sales tax, so the appropriate rate to charge your in-state customers is that at 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.
In order for the state of Nebraska to require you to collect and remit 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:
As an out-of-state seller, you are considered to have a sales tax nexus if you meet any of these conditions. There are not currently any Amazon fulfillment centers in the state, so you don’t have to worry about that triggering a nexus condition for you if you use fulfillment by Amazon to complete the orders of your Nebraska customers.
Even if you don’t have a nexus, however, you can still 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.
In general, sales of tangible personal property are taxable in Nebraska, as are admission fees, hotel accommodations, mobile telecommunication services, telephone service, and utilities, among others. Some services are taxable as well, and these include:
Groceries are not subject to sales tax in Nebraska, but prepared food is. There are other exceptions and exemptions that apply in certain situations, and they generally fall into four categories, including 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.
You can register for a Nebraska sales tax permit either online or by filling out and mailing a paper form. There is no charge to apply for the permit, and you do not have to renew it. If you have more than one business location, each location will need its own permit.
You can file your returns and make payments online or through the mail as well. The state will mail out paper forms only to 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. In general, business with a monthly tax liability of $250 or more will file monthly. Those with an average monthly tax liability of 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 to do so from the state.
Annual filers must submit their returns and payments by January 20th of the following year.
|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.
Regardless of the volume of taxable sales that you make in Nebraska, keeping up with the requirements for collecting and remitting sales tax to the state can be a time-consuming and confusing process. That condition is only amplified if you sell in multiple states, as they each have their own sets of regulations, procedures, and rates. This burden can be eased, however, by using a suite of software designed to manage sales tax collection and reporting, and TaxTools is just such a product.
TaxTools can give you back the time you’ve been spending 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 all of your taxable sales, TaxTools allows you to stay on top of things while also meeting any 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 returns and make payments directly. TaxTools also 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.