If you run an Ecommerce or CPG business in Nebraska, securing a Nebraska Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate enables you to purchase inventory and raw materials tax-free, thereby reducing upfront costs, maintaining competitive pricing, and ensuring compliance with Nebraska sales tax laws.
Understanding Resale Certificates in Nebraska
What is a Nebraska Resale Certificate?
In Nebraska, a resale certificate is documented on the Nebraska Resale or Exempt Sale Certificate (Form 13) issued by the Nebraska Department of Revenue (DOR). Businesses use this document to:
- Purchase goods without paying sales tax, provided these goods are intended for resale to their customers in the normal course of their business.
- Make tax-exempt purchases of inventory and materials that will become part of the products they sell by presenting a valid resale certificate to their suppliers.
The resale certificate helps avoid double taxation, once at wholesale and again at the point of retail sale.
However, a Nebraska resale certificate is not a blanket exemption from all sales tax obligations. Businesses are still required to collect and remit sales tax on taxable sales to end consumers.
Why do you need a Nebraska Resale Certificate?
Obtaining a resale certificate in Nebraska offers several significant advantages for businesses that purchase goods for resale.
Here are some key benefits:
- Avoid Paying Sales Tax on Inventory: The most direct benefit is purchasing inventory and materials that will be resold to customers without paying Nebraska’s sales tax upfront.
- Maintain Competitive Pricing: By not paying sales tax on the cost of goods, businesses have more flexibility in setting competitive prices for products in the Nebraska market. This can be a crucial advantage, especially in price-sensitive industries.
- Legal Compliance: Possessing and using a valid resale certificate for eligible purchases ensures that businesses comply with Nebraska’s sales tax laws and regulations, thereby avoiding penalties.
You’ll use Form 13, Nebraska Resale or Exempt Sale Certificate, to document these tax-exempt purchases.
When completing the form, you must include your Nebraska Sales Tax ID number. You must first obtain this number, as it confirms your registration with the Nebraska Department of Revenue.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Nebraska Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales. A Nebraska Resale Certificate (Form 13) allows you to purchase goods tax-free from suppliers if those goods are for resale.
To use Form 13 correctly, your business must first register for and maintain an active sales tax permit sales tax permit with the state.
Who Can Use a Resale Certificate in Nebraska?
Businesses that purchase goods for resale, lease, or rental, or as ingredients or parts of other property to be resold, leased, or rented, can use a Nebraska Resale Certificate. To qualify, your business must actively sell taxable tangible products or services and hold a valid Nebraska Sales Tax Permit.
Out-of-state purchasers may also use the form, provided they include their home state’s sales tax number and the purchase meets Nebraska’s resale criteria.
How to Get a Resale Certificate in Nebraska: A Step-by-Step Guide
Obtaining a resale certificate in Nebraska is straightforward, but it is essential to follow a few key steps to ensure compliance. Here’s how to get started:
1. Make Sure You’re Eligible
Your business purchases goods for resale, lease, or rental in the normal course of business, or as an ingredient or part of other property to be resold, leased, or rented, and registers with the Nebraska Department of Revenue.
Only businesses with a valid Nebraska Sales Tax Permit can issue or use a resale certificate.
2. Get a Nebraska Sales Tax Permit
If you haven’t already registered, apply for a Nebraska Sales Tax Permit through the Nebraska Department of Revenue website. You must obtain this permit before issuing resale certificates to suppliers.
Need help? Read our blog: How to Get a Seller’s Permit in Nebraska
3. Gather Your Business Information: You’ll need basic business details to complete the resale certificate, including:
- Business Identification Information: Legal Business Name, Physical Address, Mailing Address
- Business Entity Structure (i.e., Sole Proprietorship, Partnership, Subchapter S Corp., Corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, and SSN of Owners, Partners, or Officers
- Business Activity Details: Date & State of Incorporation, Start Date with the State of Nebraska (Nexus Start Date), Estimated Yearly Sales Tax Liability, Month of Fiscal Year End, Accounting Method (Cash vs. Accrual)
- A Signed Power of Attorney (Form 33) (if applicable)
- NAICS Code
4. Complete Form 13
Download and fill out Form 13: Nebraska Resale or Exempt Sale Certificate from the Department of Revenue’s website. You’ll give this completed form to your suppliers when making qualifying tax-exempt purchases for resale.
5. Submission
You don’t need to file Form 13 with the state. Instead, provide the completed certificate directly to your suppliers at the time of purchase. They must keep it on file to justify not charging you sales tax.
6. Pay Any Applicable Fees
There’s no cost to use Form 13, but you’ll need a valid Nebraska Sales Tax Permit.
7. Understand Renewal Requirements
Your Nebraska resale certificate stays valid only while your Sales Tax Permit remains active. Nebraska Sales Tax Permits generally do not require periodic renewal once issued, but you must maintain good standing with the Department of Revenue.
To continue making tax-exempt purchases, you must ensure your permit remains active and your business continues to qualify.
How to Use a Resale Certificate in Nebraska
If you’re an out-of-state business buying goods from a Nebraska vendor for resale, you may still claim an exemption, provided you meet Nebraska’s documentation standards.
Nebraska does not maintain formal resale certificate reciprocity, so sellers have the discretion to accept or reject out-of-state certificates.
Nebraska generally does accept resale certificates issued by other states. However, there might be specific conditions:
- Use your home state ID: Out-of-state purchasers may list their home state’s sales tax number on Section A of Form 13. Nebraska does not require these buyers to have a Nebraska tax ID for resale purposes.
- Vendor discretion still applies: Nebraska sellers may accept an out-of-state resale certificate or a properly completed Form 13 in good faith, but they’re not obligated to. Always check the vendor’s policy before the purchase.
- Expect to complete Form 13: Even if you’re presenting an out-of-state certificate, the seller may ask you to fill out Form 13 to document the transaction correctly under Nebraska law.
For more information regarding sales tax exemption laws in Nebraska, you may visit the state’s website.
Multi-Jurisdictional Resale Certificates
A multi-jurisdictional resale certificate simplifies tax-exempt purchases for businesses that operate and buy goods for resale across state lines.
Unlike single-state resale certificates, multi-jurisdictional ones aim for acceptance by multiple states as proof of tax-exempt resale purchases.
However, it’s crucial to understand that not all states accept these multi-state forms, and acceptance can come with specific conditions.
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: This widely recognized form is accepted by many U.S. states. In Nebraska, sellers are authorized to accept it if it’s properly completed and includes either a Nebraska Sales Tax Permit number (for in-state buyers) or a home-state sales tax number (for out-of-state buyers). Always confirm with the seller if they’ll accept this form before using it.
- Streamlined Sales Tax (SST) Certificate of Exemption: Nebraska is a full member of the Streamlined Sales and Use Tax Agreement (SSUTA) since October 1, 2005. This status means Nebraska recognizes the SST Certificate of Exemption. However, vendors may prefer the MTC form or Nebraska’s Form 13. If a vendor chooses to accept the SST certificate, ensure it is fully completed and includes all required details.
Businesses must confirm whether Nebraska accepts these certificates and understand any specific requirements or limitations for their use in the state. This is to avoid any audit issues.
Responsibilities When Using or Accepting a Nebraska Resale Certificate
Buyer Responsibilities
If you’re using a Nebraska resale certificate, you’re responsible for applying it only to purchases of tangible goods or services you plan to resell.
Misusing it for personal items, office supplies, or operational expenses is illegal and can trigger audits, penalties, and tax liabilities.
- Nebraska-based buyers: If your business is registered in Nebraska, you must provide your Nebraska Sales Tax Permit number when completing the resale certificate. Make sure to use the certificate only when purchasing tangible goods or certain taxable services intended for resale. You must also keep track of what was purchased under exemption and ensure accurate sales tax reporting on your taxable sales.
- Out-of-state buyers: If you’re based outside Nebraska, you may use your home state’s sales tax number on the resale certificate, provided the Nebraska vendor agrees to accept it. In some cases, vendors might still request that you fill out Form 13. You should clearly state the exemption reason and confirm that the purchase is for resale outside Nebraska to remain compliant.
Seller Responsibilities
As a seller, you’re required to accept resale certificates in good faith and maintain proper documentation for every exempt sale.
Failing to do so may result in the seller being held liable for unpaid tax if the exemption is challenged during an audit.
You must:
- Verify certificate accuracy: Check that the resale certificate includes the buyer’s name, address, sales tax permit number (or equivalent), exemption reason, and signature, and ensure it is received timely
- Ensure resale use: Make sure the items sold are intended for resale and not for the buyer’s personal or business use.
- Retain records for 3 years: Nebraska regulations require sellers to maintain all sales-related records, including exempt resale certificates, for a minimum of three years after the return is filed or while a refund claim or audit is pending.
- Reject incomplete or invalid certificates: If the buyer doesn’t provide all required information or intends to use the purchase for non-resale purposes, you must charge sales tax or deny the exemption.
Frequently Asked Questions About the Nebraska Resale Certificate
Are There Penalties for Misusing a Nebraska Resale Certificate?
Yes. Misusing Form 13 for non-exempt purchases can result in a penalty of $100 or ten times the tax due, whichever is greater.
Additionally, fraudulently signing Form 13 may be considered a Class IV misdemeanor.
Does a Nebraska Resale Certificate Expire?
Form 13, Nebraska’s resale certificate, does not include a stated expiration date. However, the certificate remains valid only while the buyer’s Nebraska Sales Tax Permit is active and in good standing.
Nebraska Sales Tax Permits usually don’t expire or need renewal unless your business changes ownership, structure, or location. If the permit is revoked, canceled, or inactive, the certificate is no longer valid for tax-exempt purchases.
How Do I Verify a Resale Certificate in Nebraska?
Online verification for Nebraska resale certificates is not available. Instead:
- Ask the buyer to provide a fully completed and signed Nebraska Resale Certificate (Form 13).
- Ensure all required fields are completed, including the buyer’s name, address, sales tax number (if any), and exemption reason.
- If you have questions or need confirmation, contact the Nebraska Department of Revenue by phone or email for assistance.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale csertificates in Nebraska. TaxHero simplifies the process, from keeping your Nebraska Sales Tax Permit active to ensuring you use resale certificates correctly.
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Schedule a Demo to see how TaxHero can streamline your resale certificate in Nebraska process today!