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Nebraska has a state sales tax of 5.5 percent for retail sales. Additionally, city and county governments can impose local sales and use tax rates of up to 2 percent. Nebraska also has special taxes for certain industries that may be on top of or in lieu of the state and local sales tax rates.
Types of taxes
Nebraska has several taxes that businesses must collect. If a business is late paying taxes, the state fines the business $25 or 10 percent of the tax due, whichever is more.
Sales and use tax
In addition to the state sales tax of 5.5 percent, Nebraska has a complementary use tax of 5.5 percent. If a business purchases taxable tangible personal property without paying taxes and does not resell it, the business must pay use tax on the property. The use tax also applies to certain taxable services, for example, an order delivered to Nebraska from an out-of-state retailer that charges delivery fees.
Nebraska imposes a lodging tax on the rental of rooms for less than 30 days. The tax is on gross receipts and is 1 percent.
Additionally, local governments have the discretion to impose a local lodging tax of up to 4 percent. The local tax is collected in addition to and in the same manner as the state lodging tax. The tax is in addition to Nebraska’s 5.5 percent sales tax rate.
To figure the lodging tax, add the state sales tax rate, state lodging rate, local sales tax rates and local lodging tax rates together. For example a county that charges 2 percent sales tax and 4 percent lodging tax would have a total tax rate of 5.5 plus 1 plus 2 plus 4 for a total of 12.5 percent tax rate. A room that is $100 for the night would be $112.50 once the business adds taxes.
Nebraska only charges the regular sales tax rate on motor vehicle rentals. However, local governments can charge up to 5.75 percent of the contract amount as a county rental fee. Thus, if the rental of a vehicle is $100 for a day, the business would tax the renter a total of 11.25 percent as long as the county rental fee is listed separately. If it is listed as part of the rental price, then it is subject to Nebraska’s sales tax rate. Thus, the total sale would be $111.25 in this example.
If the business were to charge $105.75 for the rental, and that total included the county rental fee, the business would charge sales tax on $105.75. For example, 105.75 times .055 percent equals $5.82 in taxes, for a total of $111.57.
Marijuana excise tax
Marijuana sellers and dealers must have a drug tax stamp from the Nebraska Department of Revenue for marijuana. The dealer must place the tax stamp on the container that holds the marijuana. The tax is $100 per ounce or portion of an ounce.
For example, if a customer purchases 1 ounce, the dealer, who has already paid the tax, can recover the tax it paid by collecting it from the customer.
Nebraska levies a cigarette tax; however, the distributor pays the tax. Retailers should always ensure that each cigarette pack has a tax stamp on it before selling it.
Food and beverage tax
Food ingredients are not taxable. However, prepared food is taxable at the regular state sales tax rate and the local tax rate. Thus, a restaurant bill for $100 is taxed at 5.5 percent plus the local rate. If the local rate is 1.5 percent, the total tax is 7 percent. The total bill would be $107.
Some local jurisdictions might charge an occupation tax. The occupation tax is added to the price of the prepared food and then taxed at the sales tax rates. For example, using the same rates as above, the bill is $100, the occupation tax is 2.5 percent. The business would tax the original $100 bill by 2.5 percent (100 times .025 equals 2.50) for a total of $102.50. The establishment would then add the 5.5 percent state tax and the 1.5 percent local tax, for a total of 7 percent (102.50 times 7 percent).
The tax would be $7.18, and the total bill would be $109.68.
Alcohol is taxed at the state sales tax rate plus the local tax rate, just as prepared foods are taxed.
Registering for and filing Nebraska’s taxes for sales of goods and services
If you sell taxable tangible personal property or services, you must register with the Nebraska Department of Revenue. Most businesses register online, since it makes it easier to remit sales tax returns and tax payments.
However, a business can register by mail using Nebraska Tax Application, Form 20. When you register and indicate that you will collect sales tax, the state will issue you a Sales Tax Permit. Each business must display the permit at all of its retail locations. Each location has its own permit unless you request a combined filing or use the Streamlined Sales Tax Agreement.
A business also receives a Nebraska State Identification Number. It must include this number when filing tax returns and remitting taxes due.
Due dates for Nebraska’s taxes
Sales and use taxes are due on or before the 20th of the month following the month the business collected the tax. For example, for taxes collected in January, the business would file a sales tax return and remit taxes on or before February 20.
Calculating Nebraska’s sales and use tax
When calculating Nebraska’s sales and use tax, determine the taxes the local jurisdiction charges for the city and county, then add those percentages to the state sales tax percentage of 5.5 percent. Multiply the total sales by the total percentage. For example, Widget A costs $100. The county charges 2 percent. The total tax is 7.5 percent. Multiply 100 by .075. The tax is $7.50 and the total bill is $107.50.
Nebraska sales tax holiday
Nebraska does not have a sales tax holiday for 2022.
Nebraska sales tax exemptions
Nebraska has several sales tax exemptions and publishes them on the Nebraska Department of Revenue website. However, because the exemptions can frequently change, the state does not recommend relying on the published information, but instead, asks businesses to sign up for its subscription service.
When you sign up for the service, the state will let you know when the sales and use tax law has changed.
Remote and marketplace sellers
If a business sells to someone out of state, it must collect sales tax for the location the property is shipped to. Check with the buyer’s state laws for collecting that state’s taxes. Some states do not require you to collect tax unless you sell $100,000 or have 200 transactions. Others do not have these thresholds.
In most cases, businesses collect another state’s sales taxes as a convenience to the buyer. If not, the buyer must pay use tax to its state.
If a business in Nebraska purchases tangible personal property out of state, it must pay use tax if:
- The tangible personal property is taxable, and
- The buyer does not intend to resell the property, and
- The buyer does not pay sales tax to the seller.
Nebraska’s sales and use tax is 5.5 percent. Nebraska also has several local jurisdictions that add a sales and use tax to the state’s taxes.
Download and complete Form 13, Nebraska Resale or Exempt Sale Certificate and complete it. The business does not submit it to the Nebraska Department of Revenue. It must give each seller a copy of the resale certificate to purchase taxable goods without paying taxes. The business must also keep a copy for its records.
Yes, in most cases. Check with the state’s Department of Revenue and local jurisdictions for the sales tax rate and any other taxes the state might require you to collect.
Yes. Even if business filers did not make any taxable sales they must file a sales and use tax return. Indicate that the business did not have taxable sales on the form.
Yes. Gross sales are all of the sales a business makes. Even though you must list gross sales, the only tax liability is on taxable goods and services.
Request a refund by submitting Form 7, Claim for Refund of Sales and Use Tax. If the refund is for certain agricultural equipment, use Form 7AG. Submit the tax forms to the Nebraska Department of Revenue.