Nebraska Sales Tax Guide 2024: Compliance, Rates, and Regulations for Ecommerce Businesses

Sales tax at a glance

‍

Nebraska sales tax rates & calculations in 2023

The Nebraska sales tax rate in 2023 is 5.5% to 7%. This comprises a base rate of 5.5% plus mandatory local rates up to 2%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 7.5%.

List of local sales tax rates in Nebraska

You can check this page for the full table of sales tax rates in each city and county in Nebraska. Here’s a snippet of the same:

‍

Impact of South Dakota vs. Wayfair on Nebraska sales tax

Before the Supreme Court's South Dakota v. Wayfair decision in 2018, online retailers without a physical presence in a state were not required to collect sales tax there. 

However, purchases from those retailers were still subject to state use tax. Nebraska residents had to report and pay use tax directly to the Department of Revenue if no sales tax was collected. 

After the Wayfair decision, online retailers in Nebraska began collecting sales tax. Legislative Bill 284 further clarified the tax responsibilities of remote sellers and marketplace facilitators. 

The goal was to simplify sales tax collection and make it more consistent for online and in-state purchases.

FAQs

Is Nebraska a Streamlined Sales Tax state?

Yes, Nebraska has been a full member of the Streamlined Sales Tax state since October 1, 2005

How do you calculate Nebraska sales tax?

To calculate Nebraska sales tax, you can use the following formula:

Sales tax = (5.5% + local rate) * purchase price

For instance, if the local rate is 1.5% and the purchase price is $100, the sales tax would be $7 or 7%.

What’s the difference between destination-based and origin-based sales tax states?

In destination-based sales tax states like Nebraska, the buyer's location determines the tax rate. In origin-based states, it's determined by the seller's location.

Is the Nebraska sales tax destination-based or origin-based?

Nebraska has a destination-based sales tax system. Sellers must charge the tax rate of the buyer's address.

Sales tax nexus in Nebraska

Type of nexus

Threshold

Physical presence

Any physical presence

Economic nexus

$100,000 in sales or 200 transactions

FAQs

Do I need a Nebraska seller's permit if I’m only a wholesaler?

Yes, wholesalers in Nebraska still need a seller's access even if they only sell to other ecommerce businesses. The permit is required for buying wholesale.

Do I need a Nebraska seller's permit if I only sell temporarily in the state?

Yes, even temporary sellers in Nebraska need a seller's permit if they meet the sales tax nexus thresholds.

What are the sales tax exemptions in Nebraska

Here are some of the sales tax exemptions in Nebraska:

• Component Parts - Property that becomes a part of a product manufactured for sale is exempt. Requires an exemption certificate.
• Containers - Nonreturnable containers sold to a business that will sell the contents are exempt. Requires an exemption certificate.
• Common Carrier Vehicles & Parts - Vehicles, aircraft, and parts used by common carriers are exempt. Requires an exemption certificate.
• Interstate Shipments - Property shipped out of state according to a sales contract is exempt.
• Manufacturing Machinery & Equipment - Machinery and equipment used directly in manufacturing are exempt. Requires an exemption certificate.
• Occasional Sales of Business Assets - Assets used for over one year in business are exempt when the entire company is sold. Requires an occasional sale certificate.
• Sales for Resale to Out-of-State Retailers - Sales to out-of-state retailers who resell the product are exempt. Requires a resale certificate.
• Medical Equipment & Supplies - Prescription medicines, medical equipment, and supplies are exempt—prescription required for medicines.
• Sales to Exempt Organizations - Sales to governments, schools, hospitals, and other exempt entities are exempt. Requires an exemption certificate.

FAQs

Are groceries taxable in Nebraska?

Most groceries are exempt from sales tax in Nebraska, except prepared food, candy, dietary supplements, and soft drinks.

Is clothing taxable in Nebraska?

Yes, all clothing is taxable in Nebraska. There are no exemptions for clothes or footwear.

Are digital products taxable in Nebraska?

Yes, digital products like ebooks, music, movies, and software are taxable in Nebraska.

Is software-as-a-service (SaaS) taxable in Nebraska?

Yes, SaaS is considered a digital product and is taxable.

Are services taxable in Nebraska?

Nebraska does not have a general tax on services. Only specific services like repair and installation services are taxable. Professional services are not taxable.

Excise taxes in Nebraska (alcohol, tobacco, gasoline, fuel, marijuana)

Nebraska has excise taxes on alcohol, tobacco, motor fuel, and other select items. The state does not allow recreational marijuana, so there are no marijuana excise taxes.

Remote sellers in Nebraska

Being a destination-based sales tax state, remote sellers with no physical presence in Nebraska must register and collect sales tax once they exceed the economic nexus thresholds of $100,000 in sales or 200 transactions.

Prepaid sales tax rates for fuel products in Nebraska

The Nebraska prepaid sales tax rates per gallon are:

• Gasoline: 29 cents per gallon from July 1, 2023 to December 31, 2023
• Diesel and other petroleum products: 0.3 cents per gallon

Discretionary taxes in Nebraska (local sales taxes)

Nebraska has local option sales taxes that certain cities and counties can impose. Local rates vary but do not exceed 2%.

Collecting sales tax in Nebraska

Let’s look at the steps to collect sales tax in Nebraska now.

How to collect sales tax in Nebraska if you are not based in Nebraska (Out-of-State or Remote Sellers)

Even if you do not have a physical presence (remote sellers) in Nebraska, you must register with the Department of Revenue if you exceed the economic nexus thresholds of $100,000 in sales or 200 transactions annually.

You can voluntarily register to collect and pay sales tax for your Nebraska customers before exceeding the thresholds.

Once registered, you must charge the applicable Nebraska state and local sales tax rate based on the buyer's delivery address, no matter where your ecommerce business is located.

Register for a seller’s permit online using Nebraska's online registration system. Once registered, you can legally run your business and collect sales tax in Nebraska, even without a physical presence.

Should you collect sales tax on shipping charges in Nebraska?

Yes, Nebraska requires remote sellers to collect sales tax on shipping charges when the products being shipped are taxable. If the products are exempt, shipping is exempt too.

Filing and paying sales taxes in Nebraska

Retailers must file Nebraska sales tax returns and remit taxes monthly, quarterly, or annually, depending on their sales volume. Returns must be filed even for periods with no taxable sales.

Sales tax return filing schedule and due dates in Nebraska

The filing periods and due dates for Nebraska are:

Monthly:

‍

Quarterly:

‍

Annual:

‍

Filing penalties in Nebraska

The penalty for late filing in Nebraska is 10% or $25 (whichever is greater) of the unpaid tax.

FAQs

What are the Nebraska sales tax due dates?

The due dates depend on the filing frequency assigned. For monthly filers, returns are due by the 20th of the following month. Quarterly returns are due on April 20, July 20, October 20, and January 20. Annual returns are due January 20.

I didn’t collect any Nebraska sales tax during this period. Do I still need to file a return?

A retailer must file a “Zero” sales tax return, even for periods without taxable sales. Failing to file can result in penalties.

Audit & appeals process

The audit & appeals process is a series of steps an ecommerce business must go through if the Nebraska Department of Revenue audits them. The process begins with the auditor contacting the ecommerce business to schedule an audit.

The auditor will then review the ecommerce business's records and tax returns to determine if sales tax was not paid. If the auditor finds any discrepancies, they will report their findings.

The ecommerce business then has the opportunity to appeal the findings. The ecommerce business can appeal to the Nebraska Court of Appeals if the appeal is denied.

Nebraska sales tax audit process

The Nebraska sales tax audit process typically involves:

• Initial letter from the auditor requesting records
• Field audit at the ecommerce business location
• Audit findings and assessment from the auditor
• Opportunity to appeal audit findings

What to expect during the audit?

During a Nebraska sales tax audit, the auditor will examine your records, including sales invoices, bank statements, tax returns, and exemption certificates. You should cooperate fully and have records available.

After the audit – Appealing the results

You can file a petition protesting the auditor's findings within 30 days. This begins the appeals process with the Tax Commissioner's Office. Grounds for appeal include unfair assessment and procedural errors.

Sales tax registration

Here are the steps for registering for sales tax in Nebraska:

How to register for sales tax in Nebraska?

To register for a sales tax permit in Nebraska, visit the Nebraska Department of Revenue website. You will need to provide:

• Your ecommerce business information
• Ownership details
• Estimated annual sales

Once registered, you must collect and remit Nebraska sales tax on taxable sales.

Registration requirements for online sellers in Nebraska

Online sellers must register if they exceed $100,000 in sales or 200 transactions from Nebraska buyers. Having a physical presence or marketplace facilitation also creates a nexus.

Cost of registration for a Nebraska sales tax license

There is no cost to register for a sales tax permit in Nebraska. Registration is free.

Agencies to register within Nebraska

You only need to register with the Nebraska Department of Revenue for a sales tax permit. No other agencies.

More Information & Contacts

For sales tax questions or audit appeals in Nebraska, contact:

• Nebraska Department of Revenue
• Phone number: (402) 471-5729
• Website: revenue.nebraska.gov

There you have it—a comprehensive guide on Nebraska sales tax rules and regulations. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.