Sales tax is a tax imposed on the retail sale of goods and services in Nebraska. The Nebraska sales tax rate is 5.5% of the purchase price, which is collected by the seller at the time of sale. In addition to the state sales tax, there may be additional local sales taxes imposed by cities, counties and other taxing jurisdictions. These can range from 0.5% to 2%, bringing the total sales tax rate to between 6% and 7.5% depending on location.
In this comprehensive guide, we will cover everything you need to know about Nebraska sales tax including the sales tax calculator, exemptions, filing and remittance requirements. Whether you are a Nebraska resident, run a business or sell taxable goods or services in Nebraska, this article will provide key information to ensure you are complaint with the sales tax laws.
Nebraska Sales Tax Calculator
To make sales tax calculations easy, you can use a Nebraska sales tax calculator. Just enter the purchase amount and delivery address and it will instantly calculate the state, county and city sales tax rates and amounts due.
Nebraska Sales Tax Calculator
Nebraska Sales Tax Calculator
Nebraska Sales Tax Exemptions
Certain goods and services are exempt from Nebraska sales tax. Major exemptions include:
- Food for home consumption: Most grocery food including meat, produce, bread, dairy products when sold for home consumption are exempt. However, prepared foods, dietary supplements, candy and soft drinks are still taxable.
- Prescription drugs: Prescriptions and over-the-counter drugs are exempt.
- Medical items: Medical equipment and devices prescribed by a doctor are exempt. This includes items like eyeglasses, hearing aids and prosthetic devices.
- Farm machinery and equipment: Qualifying farm machinery and equipment used in commercial agriculture are exempt.
- Motor vehicle trade-ins: You only pay sales tax on the difference between the purchase price of a motor vehicle and the amount of your trade-in.
- Utilities: Water, sewer, gas and electricity consumption for residential use are exempt.
- Manufacturing machinery and equipment: Machinery and equipment used primarily in manufacturing tangible personal property is exempt.
In addition to these exemptions, there are exemptions for:
- Government and nonprofits
- Occasional sales by individuals
- Textbooks and school supplies
- Newspapers and periodicals
- Lottery tickets
Sellers must keep proper documentation such as exemption certificates to prove a transaction qualifies for a valid exemption. If you are unsure whether an item is taxable or exempt, you can refer to the Nebraska Sales Tax Exemptions guide published by the Nebraska Department of Revenue.
Registering for a Nebraska Sales Tax Permit
If you are selling taxable goods or services in Nebraska, you must register for a Nebraska Sales Tax Permit. This applies to all retailers with a physical presence in Nebraska (e.g. store location) and remote sellers who have economic nexus.
Economic nexus is triggered if your sales into Nebraska exceed:
- $100,000 in gross sales or
- 200 or more separate transactions
in the current or previous calendar year.
You can easily register for a Nebraska Sales Tax permit online through the Nebraska Taxpayer Access Point (TAP) system. The registration process only takes a few minutes and you will receive your sales tax permit immediately by email.
Once registered, you will be provided with a Nebraska Sales Tax Account ID Number which must be displayed on all invoices and sales receipts. You will also be required to collect sales tax on taxable sales and file regular Nebraska sales tax returns.
Filing Nebraska Sales Tax Returns
If you have a Nebraska sales tax permit, you must file regular sales tax returns to report and remit the sales tax that you collected.
- Reporting Frequency: Monthly, quarterly or annually depending on your sales volume
- Due dates:
- Monthly filers: 20th day of the following month
- Quarterly filers: Last day of April, July, October and January
- Annual filers: January 31st
- Late filing: Returns filed after the due date are subject to penalties of $25 or 10% of the unpaid tax
- Electronic Filing: E-filing through TAP is mandatory. No paper returns accepted.
- Payment: Must be remitted electronically when e-filing.
Sales tax returns report your gross sales, allowable deductions (exempt sales), net taxable sales and the sales tax due. Nebraska has reciprocity agreements for collecting sales tax with some surrounding states. So for transactions with qualifying neighboring states, you may be able to use a reciprocal tax credit to offset Nebraska sales tax due.
Careful recordkeeping of gross sales, exemptions and taxes collected is crucial to accurate reporting. Retain all business records, such as invoices and exemption certificates, for at least 3 years. Electronic records are sufficient.
Local Sales Taxes in Nebraska
There are over 300 local jurisdictions in Nebraska that impose local sales taxes in addition to the state sales tax. Local sales tax rates range from 0.5% to 2% depending on the city or county.
Some of the major cities with local sales taxes include:
- Omaha – 1.5%
- Lincoln – 1.5%
- Bellevue – 1.5%
- Grand Island – 1.5%
- Kearney – 1.5%
County Sales Tax Rates in Nebraska
Adams County: 5.5%
Antelope County: 5.5%
Arthur County: 5.5%
Banner County: 5.5%
Blaine County: 5.5%
Boone County: 6%
Box Butte County: 5.5%
Boyd County: 5.5%
Brown County: 5.5%
Buffalo County: 6%
Burt County: 6%
Butler County: 5.5%
Cass County: 6%
Cedar County: 6%
Chase County: 5.5%
Cherry County: 5.5%
Cheyenne County: 5.5%
Clay County: 6%
Colfax County: 6%
Cuming County: 5.5%
Custer County: 5.5%
Dakota County: 6%
Dawes County: 5.5%
Dawson County: 5.5%
Deuel County: 5.5%
Dixon County: 6%
Dodge County: 5.5%
Douglas County: 6%
Dundy County: 5.5%
Fillmore County: 5.5%
Franklin County: 5.5%
Frontier County: 5.5%
Furnas County: 5.5%
Gage County: 6%
Garden County: 5.5%
Garfield County: 5.5%
Gosper County: 5.5%
Grant County: 5.5%
Greeley County: 5.5%
Hall County: 5.5%
Hamilton County: 5.5%
Harlan County: 5.5%
Hayes County: 5.5%
Hitchcock County: 5.5%
Holt County: 5.5%
Hooker County: 5.5%
Howard County: 5.5%
Jefferson County: 6%
Johnson County: 5.5%
Kearney County: 5.5%
Keith County: 5.5%
Keya Paha County: 5.5%
Kimball County: 5.5%
Knox County: 6%
Lancaster County: 6%
Lincoln County: 5.5%
Logan County: 5.5%
Loup County: 5.5%
Madison County: 5.5%
McPherson County: 5.5%
Merrick County: 5.5%
Morrill County: 5.5%
Nance County: 6%
Nemaha County: 6%
Nuckolls County: 5.5%
Otoe County: 6%
Pawnee County: 5.5%
Perkins County: 5.5%
Phelps County: 5.5%
Pierce County: 5.5%
Platte County: 5.5%
Polk County: 5.5%
Red Willow County: 5.5%
Richardson County: 6%
Rock County: 5.5%
Saline County: 5.5%
Sarpy County: 6%
Saunders County: 5.5%
Scotts Bluff County: 5.5%
Seward County: 5.5%
Sherman County: 5.5%
Sioux County: 5.5%
Stanton County: 5.5%
Thayer County: 5.5%
Thomas County: 5.5%
Thurston County: 5.5%
Valley County: 5.5%
Washington County: 5.5%
Wayne County: 5.5%
Webster County: 5.5%
Wheeler County: 5.5%
York County: 5.5%
Many counties charge an extra 0.5-1% local option tax for a total rate of 6-6.5%.
Local sales taxes are collected on the same taxable goods and services as the state sales tax. They are reported and remitted to the Nebraska Department of Revenue, which then distributes the local taxes to the appropriate city or county.
You can lookup the complete local sales tax rates by address using a Nebraska sales tax calculator. Be sure to collect the combined state and local tax rate based on each customer’s ship-to or delivery address.
Managing Sales Tax Compliance
Here are some tips for staying compliant and managing your Nebraska sales tax obligations:
- Use accounting software: To properly track sales and taxes charged, use accounting software like QuickBooks. Some programs even integrate sales tax calculations and filing.
- Master product taxability rules: Know which of your products and services are taxable or exempt to avoid over or under collecting tax. Consult the taxability guides.
- Check for nexus: Review economic nexus thresholds yearly to determine if you have sales tax registration requirements.
- Charge proper rates: Use a ZIP code based rate calculator to determine state and local tax rates based on delivery address.
- File on time: Calendar your due dates and set reminders to file and pay timely. Consider enrolling for ACH debit payments.
- Keep records: Retain purchase orders, invoices and exemption certificates for at least 3 years in case of an audit.
With the right knowledge of the Nebraska sales tax laws and a good compliance process, managing your sales tax obligations can be fairly simple. Reach out to the Nebraska Department of Revenue if you have any additional questions or need help with your specific situation.
Sales Tax Administration in Nebraska
The Nebraska Department of Revenue administers the collection of state and local sales taxes in Nebraska. Some key administrative responsibilities include:
- Administering sales tax registrations
- Publishing sales tax rules, notices and guides
- Providing online filing and payment systems
- Processing sales tax returns and payments
- Auditing taxpayers for compliance
- Overseeing hearings for tax appeals
The Department of Revenue also operates taxpayer service centers across Nebraska that can provide local assistance with registration, filing, account updates, audits and other sales tax matters.
In general, the Nebraska DOR aims to provide high quality customer service and make complying with sales tax requirements simple through their online systems and comprehensive guidance.
The Nebraska Department of Revenue website contains additional resources for understanding compliance obligations:
- Current sales and use tax rates
- Taxability guides and exemption certificates
- Online permit registration
- File online
- Tax calendar of due dates
- Free sales tax workshops
Stay up-to-date on any changes in the sales tax laws by subscribing to the email updates from the Department of Revenue. You can also contact them directly with any sales tax questions at 800-742-7474 (NE and IA) or 402-471-5729.
Conclusion
Managing sales tax compliance in Nebraska does require staying on top of registrations, product taxability, changing rates, filing due dates and payments. However, the Nebraska Department of Revenue provides ample resources and support to make the process straightforward.
Use this guide as a starting point for understanding your sales tax obligations in Nebraska. Be sure to follow the latest notifications from the Department of Revenue and don’t hesitate to reach out to them for help. With some basic planning and preparation, you can keep your business in compliance, avoid audit risks and properly collect, report and remit Nebraska sales taxes.
