Sales & Use Tax: Nebraska

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Disclaimer

This page is derived from a PowerPoint handout created by the Nebraska Department of Revenue which is used for training purposes in conjunction with the oral presentation given by Department training staff.

It is not intended to be a stand‐alone document. It is not an information guide, nor does it carry regulatory or statutory authority.

Nebraska tax statutes,regulations, information guides, and other resources are available at http://www.revenue.ne.gov.

Sales Tax & Use Tax Comparison

A sales transaction is defined as "the transfer of title or possession of an item or taxable service for consideration."

Sales tax and use tax are NOT BOTH due on the same transaction.

SALES TAX USE TAX
Collected and remitted by the seller Paid directly to the Department by the purchaser/consumer
Calculated on the gross receipts.
  • Delivery location determines the rate of local tax.
  • Retailers must collect and report sales tax or document why they didn’t.

A transactional tax: based on the transaction rather than the item sold

Due when:
  • Nebraska sales tax has not been paid on a taxable item or service purchased for use in Nebraska
  • Purchases are made from an out‐of‐state seller
    • Internet, catalog, mail order;
    • Magazines and journals by subscription
  • If a business withdraws tax exempt inventory for business or personal use, or forlater donation to a nonprofit organization.
Similarities
  • They are imposed on the same types of transactions.
  • They share the same exemptions.
  • They are calculated at the same rate.
  • Where delivery occurs

OR

  • Where first usage in Nebraska takes place.
Entities exempt from payment of sales tax are also exempt from payment of use tax.

Nonprofits

Organizations with 501(c) status are exempt from Federal Income Tax and Nebraska Income Tax but are not exempt from Nebraska Sales Tax or Nebraska Use Tax.

ENTITIES WHO QUALIFY FOR A NEBRASKA SALES & USE TAX EXEMPTION NUMBER
Type Criteria
Religious
  • A distinct legal existence;
  • A recognized creed and form of worship;
  • Regular religious services;
  • Established places of worship; and
  • A formal code of doctrine.

For more information on religious organizations, read REG-1-091

Educational Institutions
  • Educational services units
  • Nonprofit or private colleges and universities(primary campuses must be located in Nebraska)
  • Private educational institutions
  • Public school districts
  • Technical community colleges
  • Schools for the deaf
  • Schools for the visually impaired
  • State college systems
  • Universities

For more information on educational institutions, read REG-1-092

Nonprofit Service Providers for the Blind and Visually Impaired
Healthcare Nonprofits (Licensed in Nebraska)
  • Assisted living facilities
  • Health clinics owned by a hospital
  • Home health care services
  • Hospice services
  • Hospitals
  • Intermediate care facilities for the mentally retarded
  • Mental health centers (eff. 10/1/12)
  • Nursing facilities
  • Respite care services
  • Skilled nursing facilities
Other Nonprofits (Licensed in Nebraska)
  • Child care agencies providing 24‐hour daily care,Neb. Rev. Stat. §§ 71‐1901 through 71‐1904 (does not include day care providers)
  • Child‐placing agencies
  • Organizations providing community-based services for persons with developmental disabilities

For more information on nonprofit organizations, read REG-1-090

Notes

  • Construction of new facilities is not exempt until project completion, appropriate licenses are obtained, and an exemption number has been issued by the Department.
  • No sales tax exemption is allowed until the facility is licensed.
  • Dual‐use facilities(for example, assisted living and independent living facilities) are sales tax exempt only for the exempt portion.
    • Once the facility is licensed, the facility may apply for a refund of the sales tax paid by the contractor

Auctions

Nebraska Department of Revenue: Nebraska Sales & Use Tax for Auction Sales

How to Obtain a Nebraska Sales & Use Tax Exemption Number

Apply for exemption by filling out Form 4.

Resources & Further Reading

Nebraska Department of Revenue: Nebraska Sales and Use Tax for Nonprofit Organizations

DOCUMENT SECTIONS
When making tax exempt purchases Page 23
When making sales
  • Admissions (see also pp. 37-39)
  • Auctions
  • Car shows
  • Car washes
  • Dances
  • Fireworks
  • Fundraising events
  • Garage sales
  • Golf outings
  • Prepared food
  • Sports leagues
Page 28
When items are sold at fundraising events Page 32
Example fundraising sale Page 33
Prepared food Page 34-35
Coin-Operated Machines Page 41
Gift Baskets Page 43
Construction Contracts with Exempt Entities Pages 45-54
Lottery & Raffle Overview/Other Games SEE ALSO: Charitable Gaming: Nebraska Pages 56-62

Nebraska Department of Revenue: Nebraska Taxation of Nonprofit Organizations

Nebraska Department of Revenue: Nebraska Sales and Use Tax

Nebraska Department of Revenue: Nebraska Sales & Use Tax for Auction Sales