Use Tax
(line 41, page 12)

(Use your back button to return to the Form 1040N instruction booklet.)

Did you purchase items over the Internet or by mail order? If you did, you may owe use tax.

Nebraska law requires that if sales tax is not collected by the seller on any taxable sale, the purchaser must remit the tax directly to the state. When remitted by the purchaser, the tax is called use tax. The same items and services that are subject to Nebraska and local sales taxes are subject to Nebraska and local use taxes. If the item purchased is delivered to a Nebraska address, it is subject to sales or use tax on the total purchase price which includes any shipping, handling, and delivery charges.

Examples of situations when use tax is due:

The use tax rate is exactly the same as the state and local sales tax rate where you reside in Nebraska. Individual state and local use tax may be reported and paid on the Form 1040N, or by using the Nebraska and Local Individual Use Tax Return, Form 3. The Nebraska state sales and use tax rate is 5.5%. A complete list of local sales and use tax rates is available in this booklet.

Example. I order gifts online to be delivered to each of my two sisters. One sister’s gift is delivered to her home in Scottsbluff, Nebraska. The other sister’s gift is delivered to her home in Kansas. The seller does not charge sales tax on either gift. I owe state (5.5%) and local (1.5%) use tax on the cost of the gift and any delivery charge for the gift sent to Scottsbluff. I do not owe Nebraska use tax on the gift delivered to Kansas. (Note: The purchaser should check with the Department of Revenue in Kansas to determine whether any tax is owed.)

Businesses should refer to the Nebraska Use Tax Information Guide for more details on business use tax.