Doing business in the Cornhusker State means more than hard work—it also requires understanding tax obligations. Knowing how sales tax in Nebraska works can make the difference between compliance and costly fines.
This guide breaks down everything you need to know about Nebraska’s sales tax, from determining the right sales tax rates to understanding exemptions and filing processes. By the end of this comprehensive guide, you’ll be equipped to handle Nebraska’s sales tax with confidence and ease.
Sales Tax Nexus in Nebraska
When a business creates either a physical or economic nexus, it is required to collect sales tax in Nebraska.
Physical Nexus
A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Nebraska include:
- Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
- Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
- Employees, independent contractors, agents, or other representatives operating on your behalf.
- Affiliate Nexus: A business is considered to be operating in Nebraska if it is owned or controlled by the same interests that own or control a retailer conducting business in the same or related industry within the state.
- Presence at Trade Show: A trade show or fair promoter must be licensed as a retailer if they collect taxes for unpermitted sellers or make taxable sales. They must also provide a list of participating sellers to the Department. All sellers, including nonresidents, need a sales tax permit unless the promoter remits tax on their behalf.
To stay informed about the current criteria for establishing a physical sales tax nexus in Nebraska, take a look at the official regulations available right here!
Economic Nexus
States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.
Beginning April 1, 2019, the threshold for economic nexus in Nebraska is $100,000 in gross revenue or 200 or more separate transactions in the previous or current calendar year’s sales.
While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the
governing laws for economic sales tax nexus requirements in Nebraska.
Nebraska Sales Tax on Goods and Services
One of the first things you need to know is whether the goods you’re selling or services you’re offering are taxable in Nebraska.
Tangible Products
Almost all goods are taxable in Nebraska, including:
- Cosmetics
- Electronics
- Clothing
- Furniture
- Jewelry
- Home Goods
- Personal Hygiene – Soaps, cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants, sun tan lotions, and sunscreens are taxable.
The goods that are exempt from sales tax are:
Services
In Nebraska, the majority of service-based transactions, such as advertising, storage, and employment services, are not subject to sales tax.
However, there are specific situations where certain services are taxable. For instance, taxable services are:
- Armored Car Services
- Janitorial
- Landscaping
- Pest Control
- Printing Services
- Security
Software as a Service (SaaS)/Digital Products
SaaS is not taxable in the state of Nebraska.
Digital products (i.e., ebooks, downloadable video content, mobile apps) are taxable. It applies to selling digital audio, video, books, and related codes to end users, whether they gain permanent, temporary, or payment-based usage rights.
Shipping/Handling
Shipping and handling charges in the state of Nebraska are taxable. When a delivery fee covers both exempt and taxable items, sales tax applies to the portion allocated to taxable items based on their price or weight ratio in the shipment.
Sales Tax Permits and Licenses in Nebraska
Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Nebraska, the next important step is getting your Nebraska Seller’s Permit, also known as a sales tax permit.
Seller’s Permit
You can register for a seller’s permit online through the Nebraska Department of Revenue or follow our detailed step-by-step guide for assistance.
Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:
- Business Identification Information (name, address, phone number, email address)
- Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Owner/Partner/Officer Information
- Business Activity Details (description of products or services sold, sales volume, date of the first sale, or the expected date to start dates)
- A Signed Power of Attorney (Form 33) if applicable
- NAICS Code
Registration fee
There is no fee to register for a sales tax permit.
Renewal
In Nebraska, you don’t have to renew your sales tax permit as long as the business exists without any changes in ownership or structure.
Resale Certificate
A resale certificate is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept resale certificates from others looking to buy for resale.
In Nebraska, sellers use resale certificates to buy goods from the suppliers they intend to resell. The issuance of the certificates is always done in good faith that the seller would report tax on the final sale of the items.
You can fill out Form 13 provided by Nebraska after you receive your sales tax permit. You can also fill out the Streamlined Sales and Use Tax Certificate of Exemption if you would like to get sales tax exemption for multiple states simultaneously. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.
Streamlined Sales Tax (SST)
The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. Nebraska is a party to this program, meaning it follows the uniform rules and definitions established by SST but has its own sales tax regulations.
Check with the Nebraska Department of Revenue for the most current information on Nebraska’s participation in the Streamlined Sales Tax initiative.
Calculating and Collecting Sales Tax in Nebraska
Sales Tax Computation
In Nebraska, sales tax isn’t just one simple rate; it’s a combination of state and local taxes. To figure out the total sales tax for your calculation, you’ll need to add up the rates for the state, county, and city (if applicable) where your transaction occurs..
Here’s an example. Suppose an out-of-state seller satisfies the economic nexus criteria in Nebraska and sells to a customer in Omaha, NE, with a ZIP code of 68105. In that case, the seller has to charge the customer a total sales tax, which can be broken down as follows:
 |
SALES TAX FORMULA |
RATE |
| State: |
Nebraska |
5.50% |
| County: |
Douglas |
0.00% |
| District: |
Second District |
0.00% |
| City: |
Omaha |
1.50% |
| Combined Sales Tax Rate = |
7.00% |
|
Origin-based vs. Destination-Based
When making in-state sales, it is important to determine if you are located in an origin-based state or destination-based state to figure out what rate to charge for sales tax.
Nebraska is a
destination-based state, meaning sales tax is determined based on the buyer’s location. That means for a Nebraska-based seller, sales tax is generally based on the location of the buyer when selling within the state.
For out-of-state or remote sellers, the sales tax rate is always determined by the buyer’s location. For instance, if you’re selling a product from Alabama to a customer in Lincoln, Nebraska, where you have nexus, you’d apply Lincoln’s sales tax rate to that sale.
To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.
Filing and Remitting Sales Tax Returns in Nebraska
The next step after collection is filing and remitting your Nebraska sales tax returns. Filing and remittance can vary in frequency, typically monthly and quarterly.
- Quarterly Filing: Tax liability of at least $900 but less than $3,000.
- Annual Filing: Annual tax liability is under $900; seasonal retailers may receive special approval to submit annual returns.
Due Dates
In Nebraska, the due date falls on the 20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.
However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for the month of April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.
Filing Sales Tax Returns
To file your sales tax return for Nebraska, a few options are available:
- File online through the NebFile for Business.
- File by calling 1-800-433-8631 if you don’t have access to a computer
- File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.
Timely Filing Discount
Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. In Nebraska, taxpayers can deduct and retain 3% of the first $5,000 in use taxes, which they remit monthly as compensation for collection costs.
Sales Tax Holiday
Currently, for 2024-2025, there are no planned sales tax holidays in Nebraska.
Sales Tax Penalties in Nebraska
Like in most states, sales tax is a big part of how Nebraska generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial always to ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.
Here are the specific penalties for non-compliance with sales tax regulations in Nebraska:
- Civil penalties: 10% of unpaid tax or $25 for failure to file or remit by the due date; 25% or $50 if due to fraud or intent to evade tax.
- Criminal offenses: Class 4 misdemeanors for general violations, operating without permits, misuse of certificates, and frivolous compliance delays. Class 4 felonies for willful failure to collect, report, or pay sales tax, assisting in fraudulent filings, or intentional tax evasion.
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