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Frequently Asked Questions
about Nebraska Sales and Use Tax

Frequently Asked Questions about Nebraska Sales and Use Tax on Certain Services


Sales Tax Returns

Use Tax


Further Questions?
Contact Nebraska Taxpayer Assistance
at 800-742-7474 (NE & IA) or 402-471-5729


What are the sales and use tax rates in Nebraska? Is there county or city sales tax in Nebraska?

The Nebraska state sales and use tax rate is 5.5%. In addition, local sales and use taxes can be set at 0.5%, 1%, 1.5%, 1.75%, or 2%. There are provisions to impose both a city and county local sales tax. As of January 1, 2014, no counties are imposing a county sales tax and local sales tax is only being imposed at the city level. Dakota County terminated its local tax as of December 31, 2013.

Click here for charts listing all jurisdictions with a local sales and use tax.

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Which counties impose a county sales tax?

Dakota County imposed a county sales tax of .5% from January 1, 2005 through December 31, 2013. As of January 1, 2014 there are no counties that impose a county sales tax.

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How do I get a refund of sales tax paid in error?

You may request a refund by submitting a Claim for Overpayment of Sales and Use Tax, Form 7, or Form 7AG-1 (for certain agricultural equipment) to the Department of Revenue.

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How do I reinstate my sales tax permit?

If your account has been canceled within the last 36 months, you can reinstate it by filing a Nebraska Change Request, Form 22. If your account has been inactive for over 36 months, you must file a Nebraska Tax Application, Form 20, so the Department can issue you a new permit.

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Are federal 501(c) nonprofit organizations exempt from sales tax?

The 501(c) federal status (exemption from  federal income tax) does not automatically mean the nonprofit organization is exempt from Nebraska sales tax. Very few nonprofit organizations actually qualify for the sales and use tax exemption. Sales Tax Regulations 1-012 and 1-090 identify who is exempt in this state. Also refer to the Department's information guide, Nebraska Taxation of Nonprofit Organizations.

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How do I know the correct rate of sales tax to charge?

The point of delivery determines the location of the sale. The sales tax rate is calculated at the rate in effect at that location. Deliveries into a Nebraska city that imposes a local option sales tax are taxed at the state rate (5.5%), plus the applicable local rate. Deliveries into another state are not subject to Nebraska sales tax.

Services are generally taxed at the location where the service is provided to the customer. Utility services are taxed where the meter is located. Refer to Sales Tax Regulation 1-006, and Local Option Sales and Use Tax Regulation 9-007.

To find the rate for a specific location for a sale made today, click here.

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What labor charges are taxable?

Charges for production and assembly labor are taxable. Charges for repair and installation labor are taxable when the property being repaired, replaced, or installed is taxable. See Sales and Use Tax Regulation 1-082.

For labor charges to repair agricultural equipment, please see the Department's information guides "Agricultural Machinery & Equipment" and "Well Drilling and Irrigation Industry."

Labor charges to install new or upgraded component parts or accessories are taxable. See our notice titled "If you install or apply tangible personal property."

For the taxability of labor charges performed on motor vehicles, see “What labor charges for work done on motor vehicles are taxable?

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Are delivery, freight, postage, shipping, handling, and other service charges for transportation of the item purchased taxable?

These charges are taxable whenever the item is taxable and the charges for such items are paid to the retailer of the item (Regulations 1-026 and 1-079).

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Are computer consulting services taxable?

Charges for consultants who only provide generalized advice and who do not provide software or updates or modifications to software are exempt. Charges for services by a consultant that result in a transfer of software, whether canned or custom, are subject to tax including charges for programming, program development, systems analysis, software customization and modification, upgrading of software programs, and charges for installation. See Sales and Use Tax Regulation 1-088. You can also find more information in the Nebraska Sales and Use Tax Guide for Computer Software.

Training charges are taxable whenever paid to the seller of the software. Automatic or mandatory telephone support services that come with the transfer of software are taxable. The optional purchase of telephone support services which are separately stated are not taxable. See Sales and Use Tax Regulation 1-074.

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Are sales made over the Internet taxable?

Yes. Sales made by retailers via the Internet are taxed in the same manner as sales made by other retailers, including those via mail-order catalogs. If the seller is licensed to collect Nebraska sales tax, then the customer pays the tax to the seller. If the seller is not licensed to collect Nebraska tax or fails to collect the tax, then the customer becomes personally liable for the tax and must pay it directly to the Department of Revenue as use tax. Forms are available on our website for remitting use tax.

Exception: Sales of household goods and personal effects made on an online auction site, by an individual, are not taxable if:

  • The sale is made only once per calendar year for a period of three days or less; and
     
  • The type of property placed on the online auction site does not include anything which is similar to that sold by the individual (or any member of the individual's household) in a trade or business.

If you are a seller via the Internet, click here for more information.

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What labor charges for work done on motor vehicles are taxable?

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Is food taxable?

Sales of food or food ingredients which are generally for home preparation and consumption are not taxable.  Food which may be purchased exempt from tax includes cereals, eggs, fruits, meats, vegetables, milk, cooking oils, sugar, canned or bottled soft drinks, bottled water, and candy. 

Prepared foods such as restaurant meals, fountain drinks, and ice cream sundaes are taxable. Food sales in vending machines, and by caterers are taxable. Sales tax regulations 1-083 (food services), and 1-087 (food for human consumption), explain when a retailer should collect sales tax.

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What machinery or equipment qualifies for the agricultural machinery and equipment sales tax exemption?

Depreciable agricultural machinery and equipment purchased for use in commercial agriculture is exempt from sales and use tax provided the purchaser completes and gives to the seller a Nebraska Resale or Exempt Sale Certificate, Form 13, Section B

Machinery or equipment that is used directly in planting, tilling, harvesting, haying, fertilizing, or irrigating crops, and equipment used in raising or feeding livestock may qualify for the exemption. Refer to the Department's information guide, Agricultural Machinery and Equipment

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How do I get a refund if I paid sales tax on agricultural machinery or equipment that qualifies for the exemption?

The purchaser must complete and file a Nebraska Sales and Use Tax Refund Claim for Agricultural Machinery and Equipment Purchases or Leases, Form 7AG-1, within three years from the date of the purchase or the lease payment.

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Are sales of services between related entities subject to tax?

Intercompany sales of services (companies that have at least 50% common ownership) are exempt from sales and use tax as occasional sales. (See Sales and Use Tax Regulation 1-022)

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What services are taxed?

Several enumerated services and labor charges are taxed. See information guide "Nebraska and Local Sales Tax."

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Are aircraft subject to Nebraska sales or use tax?

Yes. The sale and delivery of aircraft to a purchaser in this state is subject to the Nebraska and local sales or use tax unless a specific exemption applies. See Sales and Use Tax Regulation 1-067, Aircraft and Related Services.

In addition, an aircraft which is purchased in another state and brought into Nebraska within on year of purchase and is either regularly based within this state or has more than one-half of the aircraft’s operating hours in this state, is subject to sales or use tax in this state.

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Are aircraft subject to local sales or use tax?

Yes. The local sales or use tax is due based on the address where the aircraft is hangared.

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Where does the Department obtain its aircraft registration information?

The Nebraska Department of Revenue obtains aircraft registration information from the Federal Aviation Administration and from county assessors. This information is used to verify and ensure that the state and applicable local sales or use tax has been paid.

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Am I required to report use tax on my purchase of a aircraft? If so, how do I do it?

Purchasers who have not paid the Nebraska sales tax to the seller of the aircraft can resolve their use tax liability by filing a Nebraska and Local Business Use Tax Return, Form 2, or a Nebraska and Local Individual Use Tax Return, Form 3. Penalty and interest may be assessed if the tax is not timely remitted.

If you need additional information, please contact Scott Arlt at 402-370-3337, or call Taxpayer Assistance at 800-742-7474 (toll free in Nebraska or Iowa) or 402-471-5729.

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Are enzymes and other items used in the production of ethanol exempt from tax as ingredient and component parts of the ethanol or of distiller grains, a sub-product of the ethanol process?

Enzymes and certain other items used in the production of ethanol do not become ingredient and component parts of the finished ethanol product. The enzymes are consumed in the ethanol production process and do not pass through the physical distillation which generates the ethanol. In addition, the enzyme products similarly are not present in the distiller grains, a sub-product of the process.

Therefore, the purchase and use of the following items are taxable. Such items do not become ingredient and component parts of the finished ethanol product or distiller grains.

Yeast, Anhydrous Ammonia, Sulfuric Acid, Caustic Soda, Sodium Busulfate, Urea, Lactoside 247, Anibiotics, or MAP (monoammonium phosphate)

If you have any questions regarding the taxability of these items or other items used in the ethanol production process, please contact the Department.

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Is Diesel Exhaust Fluid (DEF) taxable?

Sales Tax:  The sale of DEF is taxable unless purchased by a common or contract carrier (carrier) that holds a valid common or contract carrier certificate of exemption issued by the Nebraska Department of Revenue.  To purchase the DEF exempt from sales tax, the carrier must complete and issue to the retailer of the DEF, a Nebraska Resale or Exempt Sale Certificate, Form 13, Section B, exempt category 2.

If the purchase of the DEF is taxable, the retailer must collect the sales tax as an item separate and distinct from the selling price of the DEF. 

Motor Fuels Tax: DEF is not blended into fuel or consumed in a vehicle’s engine and is therefore exempt from motor fuels tax.

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Are parts and labor supplied in an “after-warranty” or “goodwill” repair subject to tax?

When a manufacturer agrees to replace or repair an item after the time period for coverage under a warranty has expired as a “goodwill” or “after-warranty” repair, the transaction is separate from the original warranty.   Any charges to the manufacturer for parts and labor provided with such repairs, except for labor related to the repair of a motor vehicle, are subject to tax.

The exemption provided in Regulation 1-074.02 applies only to parts furnished under a specific warranty, the gross receipts of which were subject to tax. When the repair is performed outside the warranty period any charge made to the manufacturer for the repair parts and labor is subject to tax.

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What are the sales and use tax obligations of motor vehicle dealers related to vehicles furnished free-of-charge to educational institutions?

The motor vehicle dealer is responsible for remitting use tax based on the cost of the vehicle. Nebraska Sales and Use Tax Regulation 1-021 provides the method for calculating the tax due.

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A U.S. government (federal) employee wants to make a tax-free purchase using a government credit card without completing a Nebraska Resale or Exempt Sale Certificate, Form 13. Can this be done?

Yes. When the federal government is the direct purchaser of any taxable property, the sale is exempt. U.S. government purchasers (federal government employees) with credit cards containing the appropriate prefix and sixth digit (see chart below to determine the exempt status) may use the credit card transaction instead of completing a Nebraska Resale or Exempt Sale Certificate, Form 13 or U.S. Tax Exemption Certificate, Form SF 1094.

Federal government employees’ credit card purchases which are not centrally billed, in total, to the U.S. Government are taxable, even if the employees are reimbursed for their expenses while conducting business for the federal government.

The credit cards, listed under the Exempt columns below, have their entire balances centrally billed to the federal government (not an employee) and are therefore exempt from Nebraska sales and use tax.

The Department of the Interior uses credit cards which have an integrated billing system. This system only directly bills the United States Government for some of the purchases made with the cards, such as lodging. However, other purchases, such as meals, are billed to the employee.

New Federal GSA SmartPay®2 credit cards were issued to federal employees in the fall of 2008, which includes the new Integrated System credit card.

Exempt - Federal GSA SmartPay®2 PURCHASE credit cards


Prefix (1st four digits)

Sixth Digit

Type of Credit Card

Exemption Status for Nebraska Sales Tax

4486

N/A

VISA

All purchases are exempt

4614

N/A

VISA

All purchases are exempt

4716

N/A

VISA

All purchases are exempt

5565

N/A

MasterCard

All purchases are exempt

5568

N/A

MasterCard

All purchases are exempt

Exempt - Federal GSA SmartPay®2 FLEET credit cards


Prefix (1st four digits)

Sixth Digit

Type of Credit Card

Exemption Status for Nebraska Sales Tax

4486

N/A

VISA

All purchases are exempt

4614

N/A

VISA

All purchases are exempt

4716

N/A

VISA

All purchases are exempt

5565

N/A

MasterCard
Wright Express

All purchases are exempt

5568

N/A

MasterCard

All purchases are exempt

8699

N/A

Voyager

All purchases are exempt

Exempt - Federal GSA SmartPay®2 TRAVEL credit cards


Prefix (1st four digits)

Sixth Digit

Type of Credit Card

Exemption Status for Nebraska Sales Tax

4486

0, 6, 7, 8, 9

VISA

All purchases are exempt

4614

0, 6, 7, 8, 9

VISA

All purchases are exempt

5565

0, 6, 7, 8, 9

MasterCard

All purchases are exempt

5568

0, 6, 7, 8, 9

MasterCard

All purchases are exempt

Taxable - Federal GSA SmartPay®2 TRAVEL credit cards


Prefix (1st four digits)

Sixth Digit

Type of Credit Card

Exemption Status for Nebraska Sales Tax

4486

1, 2, 3, 4

VISA

All purchases are taxable

4614

1, 2, 3, 4

VISA

All purchases are taxable

5565

1, 2, 3, 4

MasterCard

All purchases are taxable

5568

1, 2, 3, 4

MasterCard

All purchases are taxable – includes Department of the Interior

Please note:  Currently the Federal GSA SmartPay®2 program does not have a No. 5 in use in the sixth digit of their Purchase, Fleet, or Travel credit cards.

For additional information regarding the Federal GSA SmartPay®2 program see the United States General Services site on the GSA website.
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A local government (county or city) employee wants to make a tax exempt purchase using a local government charge card. Can this be done?

It will depend on several factors. The requirements identified here for a local government unit do NOT apply to purchases made by Nebraska state employees or by federal employees. Information on state or federal purchases is provided at the end of this FAQ response.

Local governmental units

A local governmental unit that is exempt (identified in Sales Tax Regulation 1-093, Governmental Units), must submit an Exemption Permit Application for Use of Credit or Debit Cards by Sales Tax Exempt Entities, Form 13CCE (Application), to obtain approval for a specific credit or debit card (card) to be used to make tax exempt purchases (Application may be made for multiple credit or debit cards).

Upon approval of this Application, the Nebraska Department of Revenue will issue an Exemption Permit for Use of Credit or Debit (Exemption Permit) for each specific card that can be used to make tax-exempt purchases by the exempt entity. This Exemption Permit will confirm that any purchases made using the specific card are directly billed to and paid for by the sales tax exempt governmental unit

When the exempt entity makes purchases using one of the specific cards that has been issued an Exemption Permit, it must present the card, a copy of the Exemption Permit, and a copy of a fully completed Nebraska Resale or Exempt Sale Certificate, Form 13, to the seller at the time of purchase. A “blanket” Form 13 that is already on file with the seller will replace the need to issue a Form 13 at each use. The card used must match the identifying information on the Exemption Permit.  It is important that the seller keep these copies for its records.

Any purchases made by a local governmental unit using a card other than those previously authorized and specifically identified on an Exemption Permit are taxable.

State Purchasing Card. The Exemption Permit identified above does not apply to purchases made using the State of Nebraska Purchasing Card. Information on the proper documentation needed to confirm tax exempt purchases using the state purchasing card is in our information guide Charge Card Purchases by Nebraska State Government and Its Employees.    

Federal Smart Pay® Card Purchases. The Exemption Permit discussed above does not apply to purchases made by federal employees. Federal employees making purchases require different documentation to make tax exempt purchases. Information on purchases made by federal employees is available in our information guide Nebraska Sales Tax Guide for Charge Card Purchases by United States (Federal) Government Employees.

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When the veterinarian or veterinary technician grooms my pet, is it taxable?

Animal grooming (other than for livestock) is taxable unless a licensed veterinarian or veterinary technician grooms the animal in conjunction with medical treatment. If the grooming is not performed in conjunction with medical treatment, the charges for grooming are taxable.

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Are “fuel surcharges” taxable?

Due to the current high cost of fuel, many retailers are passing this cost on to their customers by including a separate line item on the invoice instead of including it in the price of the goods or services. Retailers are calling it a “fuel surcharge” or some similar description.

Taxable Fuel Surcharges: Retailers of taxable goods and services, who add fuel surcharges to the customer’s invoice, must charge sales tax on this additional charge. Fuel surcharges are considered to be part of the delivery charge or the cost of doing business. Fuel surcharges are taxable regardless of whether they are billed based on the distance traveled, as a percentage of the sale, or at a flat rate.

Non-taxable Fuel Surcharges: If the goods or services are exempt from tax, then the fuel surcharge is not taxable.

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Are graphic design services subject to sales and use taxes?

When a graphic design is created and transferred to the customer on a tangible medium, for example: paper, CD, or thumb drive, the graphic designer must collect and remit tax on the total sales price. This type of sale represents a sale of tangible personal property. However, if a graphic design is created and transmitted electronically, the sale is not taxable.

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Are charges for Web page development, maintenance, and hosting taxable?

Charges for the development and maintenance of Web pages which are hosted by the developer or a third-party hosting entity are not taxable. Such charges are not taxable even though the purchaser may be provided with passwords by the developer or third-party host in order to access the Web page to update or delete files, create file directories, change permissions, and the like. 

Separately stated charges for hosting and maintenance of the Web pages are not taxable.

See Revenue Ruling 01-10-2 for more information.

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Are charges for Web-based software applications taxable?

Charges by an Application Service Provider (ASP) for services that allow customers remote access to software applications via the Internet or other electronic connection are not taxable when the ASP retains title to the software. The location of the software, whether located on a server in Nebraska or on a server outside the state, does not affect this determination. The ASP is, however, responsible for paying sales or use tax on its purchases of software which reside on a server located in Nebraska.

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Do I owe sales tax when I purchase a gift card which may be used to purchase digital goods, such as music and movies, over the Internet?

No. Gift cards allow purchasers to download digital goods of their choice and are sold in various denominations of money and time. As the cards are used, the selling price of the digital good, plus the applicable sales tax, is deducted from the value of the card. The provider of the digital good is responsible for the collection and remittance of the applicable sales tax. For more information, see Revenue Ruling 01-11-3.

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Do I owe sales tax when I purchase a content or digital release card which may be used to purchase digital goods, such as music and movies, over the Internet?

Yes. Sales of “content cards” or “digital release cards” which allow purchasers to download specific digital goods are subject to tax at the time and place of purchase if the specific digital product is taxable when purchased directly. For example, the sale of a digital release card for the latest music of a specific vocalist is subject to tax. When the purchaser utilizes the digital code contained on the card to download the specific digital good, no sales tax is charged by the digital provider. For more information, see Revenue Ruling 01-11-3.

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What is "advertising and promotional direct mail?"

Advertising and promotional direct mail is printed material intended to attract attention to a product, person, or business in an attempt to sell, popularize, or secure financial support.

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What sales tax rate applies to sales of "advertising and promotional direct mail?"

Sales of the printing and delivery of advertising and promotional direct mail are subject to sales tax at the rate imposed by the locations where the materials are delivered. Purchasers of these materials may provide the retailer with a summary of the delivery locations, and reasonably allocate the total based on the sales volume in each jurisdiction, the number of customers in each jurisdiction, or another reasonable allocation method. The retailer of the direct mail will collect tax according to the allocation. No further sales or use tax is due.

Example 1: A printer produces 5,000 advertising flyers and is responsible for delivering the flyers to addresses on a mailing list provided by the purchaser. 500 flyers are delivered to addresses within Nebraska. The selling price of the 500 flyers can be allocated to the specific jurisdictions within Nebraska where the flyers are distributed based upon the percentage of the population in each jurisdiction to the total population of all jurisdictions where the flyers are distributed.

If the purchaser does not provide the retailer with the relevant delivery information, a direct payment permit, or an exemption certificate, the retailer will collect sales tax for the entire print job based on the shipping point. When sales tax is paid based upon the shipping point, the purchaser remains liable for use tax based on the addresses to which the advertising and promotional direct mail is delivered.

Example 2: A printer produces 5,000 advertising flyers. The printer does not receive a direct payment permit, exemption certificate, or delivery information from the purchaser. Therefore, the printer must collect tax based upon the address from which the materials are shipped. However, the purchaser remains liable for the use tax based on the addresses to which the materials are delivered.
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What is "other direct mail?"

“Other direct mail” includes only the printing and delivery of materials, such as invoices, statements, newsletters, etc. Other direct mail does not include the development of billing information or data processing services.

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What sales tax rate applies to sales of "other direct mail?"

If the purchaser of other direct mail does not provide the retailer with a direct payment permit or an exemption certificate, the retailer must collect sales tax at the tax rate imposed at the purchaser's address. The purchaser, however, remains liable for use tax based on the addresses to which the other direct mail is delivered.

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Are purchases of retail promotional deals (“deals-of-the-day”) taxable?

Retail promotional deals, sometimes referred to as “deals-of-the-day,” can include offers on everything from vacation packages to restaurant meals. Purchases of these promotional deals from advertisers, such as online businesses, local radio stations, and newspapers, are treated in the same manner as purchases of gift certificates. The payment made by the purchaser to the advertiser for the promotional “deal” is sales tax exempt

When the promotional deal is redeemed by the customer, sales tax is first calculated on the full selling price of the taxable sale. The amount of the promotional deal is then applied to the transaction.  

Example 1:  A restaurant in a city with a 1.5% local option sales tax contracts with an online advertiser to sell $50 promotional deals for $25.  When a promotional deal is purchased, a certificate is issued to the customer.  The promotional deal is redeemable on the purchase of meals.  The customer orders meals with a total selling price of $70.  The restaurant must calculate and collect sales tax on the full selling price of $70 before deducting the $50 value of the promotional deal as indicated on the certificate.

Meals
$ 70.00
Sales Tax
+$   4.90
   Subtotal
$ 74.90
Deal
-$ 50.00
Total Due
  $ 24.90

Example 2:  A clothing store in a city with a 1% local option sales tax contracts with a radio station to sell $20 promotional deals for $10.  When the promotional deal is purchased, the radio station issues a certificate to the customer.  The promotional deal is redeemable for a specific article of clothing.  The customer comes into the clothing store to purchase the specified article of clothing which has a selling price of $20 .  The clothing store must calculate and collect sales tax on the full selling price of $20 before deducting the $20 value of the promotional deal.

Article of clothing
$ 20.00
Sales Tax
+$   1.30
   Subtotal
$ 21.30
Deal
-$ 20.00
Total Due
  $   1.30

Please note that the total amount due from the customer consists only of the tax calculated and collected by the clothing store on this transaction.  The tax is still due from the customer even if the deal certificate covers the full price of the article redeemed.

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Is insulin for human use exempt from sales and use tax?

Yes.  Insulin for human use (with or without a prescription) is sales tax exempt.

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Are drugs exempt from sales and use tax?

Drugs as defined in Sales and Use Tax Regulation 1-050, are sales tax exempt when they are:
  • Prescribed by a practitioner licensed under the Uniform Credentialing  Act for a specific patient.
This exemption applies whether they are dispensed by a physician or filled by a pharmacist.

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What types of drugs qualify under the sales tax exemption?

Qualifying drugs (Reg. 1-050) are compounds, substances, or preparations which are:

  1. Recognized in the official U.S. Pharmacopoeia, official U.S. Homeopathic Pharmacopoeia, or official National Formulary;
  2. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or
  3. Intended to affect the structure or function of the body.

Drugs do not include:

  • Alcoholic beverages;
  • Dietary supplements;
  • Food or food ingredients;
  • Grooming and hygiene products; or
  • Over-the-counter drugs.

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What is durable medical equipment?

Durable medical equipment (Reg. 1-050) is equipment that:

  1. Can withstand repeated used;
  2. Is primarily and customarily used to serve a medical purpose;
  3. Is generally not useful to a person in the absence of illness or injury; and
  4. Is appropriate for use in the home.

Examples of this type of equipment are:

  • Hospital bed;
  • Sleep apnea monitor; or
  • Home dialysis machine.

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Is durable medical equipment exempt from sales and use tax?

Equipment defined as durable medical equipment (Reg. 1-050) is sales tax exempt when it is:

  1. Prescribed by a practitioner licensed under the Uniform Credentialing Act for a specific patient; and
  2. A type of durable medical equipment coverable by Medicaid.

Repair and replacement parts for qualifying durable medical equipment may also be purchased sales tax exempt.

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What is a prosthetic device?

A prosthetic device (Reg. 1-050) is a replacement, corrective, or supportive device that is worn on, or in, the body to:

  1. Artificially replace a missing portion of the body;
  2. Prevent or correct a physical deformity or malfunction; or
  3. Support a weak or deformed portion of the body.

Examples of prosthetic devices are:

  • Prescription eye glasses;
  • Hearing instruments; or
  • Insulin pumps.

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Are prosthetic devices exempt from sales and use tax?

Equipment defined as a prosthetic device (Reg. 1-050) is sales tax exempt when it is:

  1. Prescribed by a practitioner licensed under the Uniform Credentialing Act for a specific patient; and
  2. A type of prosthetic device coverable by Medicaid.

Supplies and repair and replacement parts for qualifying prosthetic devices may also be purchased sales tax exempt.

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What is oxygen equipment?

Oxygen equipment (Reg. 1-050) is equipment which dispenses or holds oxygen and includes:

  • Cylinder studs and support devices;
  • Cylinder transport devices, including sheaths and carts;
  • Face masks;
  • Flowmeters;
  • Liquid oxygen base dispensers;
  • Liquid oxygen portable dispensers;
  • Nasal cannulas;
  • Oxygen concentrators;
  • Oxygen cylinders;
  • Oxygen fittings and accessories;
  • Oxygen humidifiers;
  • Oxygen tubing;
  • Regulators; and
  • Tank wrenches.

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Is oxygen and oxygen equipment exempt from sales and use tax?

Oxygen and oxygen equipment (Reg. 1-050) are sales tax exempt when they are:

  1. Prescribed by a practitioner licensed under the Uniform Credentialing Act for a specific patient; and
  2. A type of oxygen equipment coverable by Medicaid.

Repair and replacement parts for qualified oxygen equipment are also sales tax exempt.

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What is mobility-enhancing equipment?

Mobility-enhancing equipment (Reg. 1-050) is equipment that is:

  1. Primarily and customarily used to provide or increase the ability to move from one place to another;
  2. Not generally used by persons with normal mobility; and
  3. Appropriate for use in a home or a motor vehicle.

Examples of mobility-enhancing equipment are:

  • Wheelchairs;
  • Canes;
  • Handrails and grab bars; or
  • Wheelchair lifts.

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Is mobility-enhancing equipment exempt from sales and use tax?

Equipment defined as mobility-enhancing equipment (Reg. 1-050) is sales tax exempt when it is:

  • Prescribed by a practitioner licensed under the Uniform Credentialing Act for a specific patient.

Repair and replacement parts for qualifying mobility-enhancing equipment may also be purchase sales tax exempt.

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What are home medical supplies?

Home medical supplies (Reg. 1-050) are medical supplies which are:

  1. Appropriate for use in the home;
  2. Primarily and customarily used to serve a medical purpose; and
  3. Generally only useful to a person with an illness or injury.

Examples of home medical supplies are:

  • Body fluid collection bags;
  • Glucose test strips; and
  • Syringes.

Home medical supplies will not include any items used for personal comfort, hygiene, or cosmetic purposes. Drugs are also not home medical supplies.

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Are home medical supplies exempt from sales and use tax?

Medical supplies defined as home medical supplies (Reg. 1-050) are sales tax exempt when they are:

  1. Prescribed by a practitioner licensed under the Uniform Credentialing Act for a specific patient; and
  2. A type of home medical supply coverable by Medicaid.

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When will I receive my sales tax return?

The Department will not mail Form 10 to anyone who files a combined return, is required to make electronic payments, or has e-filed the form in the past. All other taxpayers who are mailed the Form 10 should receive it around the 10th of the month following the tax period. 

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What is the penalty for late filing of a sales tax return or making a payment after the due date?

The penalty is $25.00, or 10% of the tax, whichever is greater.

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Do I need to file a sales tax return if I have nothing to report for the tax period?

Yes, a "zero" return must be filed by the due date, even if there is no tax information to report or tax to be remitted. The taxpayer should indicate on the return that there were no taxable sales or purchases for the tax period.

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Can I file one sales tax return for all my retail locations?

Any retailer filing monthly returns and engaged in business at more than one location selling property or providing services subject to sales and use tax may make application to file a combined monthly Nebraska and Local Sales and Use Tax Return, Form 10. Each sales location must hold a sales tax permit, and all licensed locations must be subject to common ownership (the same person or persons own eighty percent of each licensed location). To request permission to file a combined sales and use tax return, file Nebraska Combined Filing Application, Form 11.

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What is use tax?

Use tax is a complement to the Nebraska sales tax. It is imposed on the storage, use, distribution, or consumption of tangible personal property and certain services purchased by the end user when Nebraska sales tax has not been paid. An example is a delivery into Nebraska from an out-of-state Internet or catalog seller. See Sales and Use Tax Regulation 1-002 for additional information.

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How do I report and pay use tax?

Business use tax is reported by licensed retailers on the Nebraska and Local Sales and Use Tax Return, Form 10. If the business is not a retailer, use tax is reported on the Nebraska and Local Business Use Tax Return, Form 2. Individual use tax is reported on the Nebraska Individual Income Tax Return, Form 1040N, line 37, or the Nebraska and Local Individual Use Tax Return, Form 3.


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