Do you need to collect and remit sales tax in Nebraska?
In Nebraska, sales tax applies to the retail sale, lease, or rental of tangible personal property and certain services. Taxable services include but are not limited to: admissions and fees for recreational activities; hotel accommodations; telecommunications; production, assembly, repair and installation labor charges; utilities. Something different about Nebraska to keep in mind is that they tax most services. You can find a FAQ about Nebraska taxable services here.
There are exemptions to the rule, however. Examples of these include:
- Sales to government entities
- Sales to nonprofit educational and religious organizations
- Prescribed drugs
- Food (like groceries)
Do you have sales tax nexus in Nebraska?
Sales tax nexus in the modern age is a crucial concept for businesses, as it determines whether a company has a tax obligation in a specific state. There are two main types of nexus to watch out for: physical and economic. In Nebraska, physical nexus is established when a business has a physical presence, such as a store, office, or warehouse. On the other hand, economic nexus is triggered when an out-of-state or online retailer exceeds a certain threshold of sales or transactions in Nebraska.
Physical sales tax nexus in Nebraska
According to the Nebraska Department of Revenue Information Guide, retailers meeting any of the following criteria have physical sales tax nexus:
- Maintaining or occupying an office or place of business in the state.
- Having a representative or solicitor selling, delivering, or taking orders in the state.
- Obtaining rental receipts from leased tangible personal property.
- Being owner or controlled by an entity that owns or controls a retailer in the state.
- Maintaining or having a franchisee or licensee who is a retailer in the state.
Economic sales tax nexus in Nebraska
A business which generates over $100,000 in Nebraska sales or 200 or more Nebraska transactions in the previous or current year have economic nexus in the state. These thresholds include any sales made through a marketplace facilitator or a Multivendor Marketplace Platform (MMP).
Determining nexus for your business can be a complex and daunting task. With many factors to consider, businesses struggle to navigate the intricacies of nexus determination, and even end up paying thousands of dollars to accounting firms to get answers. That’s why we offer nexus determination as an a-la-carte or package deal for businesses at affordable prices. With over 20 years of experience in federal and state tax and accounting laws, we’re a trusted partner for many businesses in need of nexus review services. Contact us now for a consultation!
Are marketplace facilitators required to collect and remit sales tax in Nebraska?
In Nebraska, marketplace facilitators, such as Amazon or eBay, are required to collect and remit sales tax on behalf of their sellers if they meet the state’s economic nexus thresholds. This means that if a facilitator has over $100,000 in sales or 200 transactions within the state, they are responsible for handling the sales tax obligations. This requirement shifts the tax burden from individual sellers to the facilitators, while ensuring that brick-and-mortar stores in Nebraska are not at an unfair disadvantage.
However, just because facilitators have jurisdiction over the sales tax made through their marketplace does not mean that remote sellers are off the hook. The sales and transaction economic threshold stated above applies to all Nebraska retail sales, including those made through a marketplace. This means that even if you aren’t responsible for the collection and remittance of sales tax on marketplace facilitator sales, you may still have economic nexus if your total Nebraska sales, regardless of platform, exceed either of the two thresholds. In this case, you will need to apply for a Nebraska Sales Tax Permit.
What platforms are marketplace facilitators?
What is a marketplace facilitator?
A marketplace facilitator, sometimes referred to as a Multivendor Marketplace Platform (MMP), is an online platform that allows customers to purchase goods or services from various vendors in one convenient location. These platforms can benefit businesses by increasing product visibility and attracting a larger customer base. Additionally, marketplace facilitators often have the legal responsibility to collect and remit sales tax on behalf of sellers, which can help ease the sales tax burden for businesses.
Filing Nebraska Sales Tax
Before you can file Nebraska returns or collect and remit sales tax from consumers in the state, there are a few initial steps to take. We’ve broken down the process for you in the tables below.
Registering for a Nebraska Sales Tax Permit
|1. Determine if you need a permit||Using the information we’ve provided in this guide, (or by consulting us for a nexus review), verify if your business has a tax obligation in Nebraska.||SalesTaxSolutions Nexus Determination|
|2. Gather required documents||Prepare documents such as your Social Security Number (SSN) or Federal Employer Identification Number (FEIN), business information, and bank account details.|
|3. Register your business with the Nebraska Department of Revenue||You can register your business via the online application form, a paper form, or by Streamlined Sales Tax, which is a free registration service for businesses that need to register for sales tax in multiple states. Additionally, we handle sales tax registration in all states.||Nebraska Online Application; Paper Form 20; Streamlined Sales Tax; SalesTaxSolutions Registration|
Collecting Nebraska Sales Tax
|1. Determine taxable items and services||Identify items and services subject to sales tax in Nebraska, including tangible personal property and most services.||Nebraska Information Guide|
|2. Apply the correct sales tax rate||Apply the appropriate state, county, and local sales tax rates based on the location of your business (if you have physical nexus) or your customer’s shipping address (for remote sellers with economic nexus).||Nebraska Local Sales and Use Tax Rates; Nebraska Sales Tax Finder|
|3. Obtain exemption certificates (if necessary)||If necessary, obtain exemption certificates from eligible customers to document your tax-exempt sales.||Nebraska Sales Tax Exemptions; Nebraska Resale or Exempt Sale Certificate|
Filing Nebraska Sales Tax Returns
|1. Collect sales tax data according to your filing frequency||The Nebraska Department of Revenue will assign you a filing frequency based upon your yearly tax liability (more on this below).||REG-1-010, Information on Sales and Use Tax Return|
|2. File your Nebraska sales tax return||There are three ways to file a Nebraska sales tax return: online using the efiling system (which is recommended), downloading paper Form 10, or outsourcing your sales tax filing to a reliable third party (like us!)||NebFile for Business Electronic Filing System; Form 10|
|3. Submit or mail your return and payment||File your sales tax return and remit payment either online or by mail before the due date.|
A few more relevant steps
- Stay informed about rate changes.
- Filing and paying your sales tax before the due date is required and comes with an extra perk! Timely filing is subject to a 0.25% discount of the tax due (up to $75).
- Businesses must keep sales tax records for at least three years from the last filing.
- Even if you have no tax due, you must still file a zero return for each filing period or risk potential penalties and fees.
When are sales tax returns due in Nebraska?
There are three filing frequencies in Nebraska: annually, quarterly, and monthly. The Nebraska Department of Revenue assigns these filing frequencies based on the estimated yearly tax liability of a business. Take a look at the chart below for a breakdown.