RATE OF SALES TAX:
5.50%
LOCAL & COUNTY MAXIMUM RATES:
2.50%
Table of Contents
What are the taxable goods and services?
The first step in sales tax compliance is determining if the items or services your firm offers are taxable in Nebraska.
Traditional Products and Services
Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in Nebraska.
Medicine, food, and fuel are all free from taxation.
Some Nebraska services are subject to sales tax. View the Nebraska Department of Revenue’s Sales Tax Frequently Asked Questions for a comprehensive list of taxable services.
In addition, the Nebraska Department of Revenue has released a detailed reference on sales tax exemptions and exclusions.
Digital Products and Services
A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.
Nebraska compels firms to collect sales tax on digital items sold.
How to Apply for Nebraska Sales Tax
If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.
This enables your company to collect sales tax on behalf of the municipal and state governments.
You will need the following information to register:
Personal identifying information (SSN, address, etc.)
Identification information for a business (EIN, address, etc.)
Type of business entity
Accounting period and basis (cash, accrual, or other) (fiscal year, calendar year, etc.)
Describe your company and/or goods
A Resale Certificate might help you save money.
When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.
Sales Tax Collection
After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.
When computing sales tax, consider the following types of transactions:
Store Sales Shipping Within-State Sales Outside-State Sales
Retail Sales
For conventional company owners who sell products or services on-site, calculating sales tax is simple: all sales are taxed at the rate determined by the store’s location.
Here’s an illustration of how this situation may look:
In Fremont, Nebraska, Mary owns and operates a bookshop. Because books are taxable in Nebraska, Mary charges her clients a 7.0% flat-rate sales tax on all transactions. This includes Nebraska’s 5.5% state sales tax and Fremont’s 1.5% local sales tax.
Sales inside the state
The state of Nebraska has a policy known as origin-based sales taxation. This implies that long-distance transactions inside Nebraska are taxed based on the seller’s address. This regulation applies to sales taxes levied by the state, county, and city.
Consider the following scenario:
Steve operates his own eBay electronics company from his home in Grand Island, Nebraska. A buyer from Lincoln, Nebraska, discovers Steve’s eBay website and buys a $350 set of headphones. Steve uses the 5.50% Nebraska state tax rate plus the 1.75% Lincoln municipal tax rate when computing the sales tax for this item. The entire cost is $375.38 ($25.38 sales tax) at a total sales tax rate of 7.25%.
Out-of-State Purchases
Nebraska firms must only pay sales tax on out-of-state sales if they have a presence in other states.
Nexus indicates that the company has a physical presence in another state.
Common nexus types include:
A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.
Submit Your Sales Tax Return
You’re ready to submit your sales tax return now that you’ve obtained your Nebraska seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.
How to File a Claim
Businesses in Nebraska are required to file sales tax forms and make sales tax payments online.
How Frequently Should You File?
The frequency with which you must submit is determined by the total amount of sales tax collected by your firm.
Annual filing: If your company receives less than $75 in sales tax each month, you should submit returns on an annual basis.
Quarterly filing: If your company collects between $75 and $250 in sales tax every month, you should choose to submit quarterly returns.
Monthly filing: If your company receives more than $250 in sales tax every month, you must submit returns on a monthly basis.
Deadlines for Filing
The deadline for all Nebraska sales tax returns is the 20th of the month, unless it is a weekend or federal holiday, in which case the deadline is postponed to the following working day.
Penalties for Filing Late
Nebraska assesses a late filing penalty of 10% of the tax owed on the tax return, or $25, whichever is larger.
Nebraska assesses a late payment penalty of 10% of the tax owing on the tax return, or $25, whichever is larger. This penalty is only imposed if the company submits its return on time but fails to pay the debt in full.
For any unpaid tax or penalty, the state levies a compounding interest rate of 9% per year or 0.75% every month or partial month.