Sales Tax Guide for Nebraska

What Is Taxable in Nebraska?

In Nebraska, most tangible personal property is subject to sales tax. However, certain items are exempt, including prescription medications, some types of medical equipment, and certain agricultural machinery.

If your business sells taxable goods or services, it’s essential to collect and remit sales tax accurately. Additionally, businesses should be mindful of use taxes that might arise from purchasing products out of state.

Who Needs to Collect Sales Tax?

Businesses obligated to collect sales tax in Nebraska include:

• Retailers with a physical presence in Nebraska
• Online sellers surpassing the state’s economic nexus threshold
• Service providers, particular to specific services

The economic nexus threshold in Nebraska is set at $100,000 in sales or 200 transactions in the preceding or current calendar year. Surpassing this threshold requires registering and collecting sales tax. It’s crucial to comply to avoid penalties and back taxes, for which doola’s Bookkeeping services are invaluable for ensuring compliance and avoiding legal troubles.

How to Register for a Sales Tax Permit in Nebraska

Registering for a sales tax permit in Nebraska involves the following steps:

1. Gather required information: EIN, business license, and business particulars.
2. Visit the Nebraska Department of Revenue website.
3. Fill out the online application form.
4. Receive the Sales Tax Permit and start collecting tax.

Collecting tax without a sales tax permit is illegal, so registration prior to making taxable sales is necessary.

How to Calculate Sales Tax in Nebraska

To calculate sales tax accurately, follow these demonstrated steps:

Step 1:
Ascertain the correct sales tax rate, taking into account both the business’s and buyer’s locations.

Step 2:
Collect the correct tax amount at the sale point.

Step 3:
Maintain meticulous records of all transactions.

Nebraska mandates monthly, quarterly, or yearly sales tax filings, contingent upon sales volume. Be vigilant with filing deadlines to circumvent penalties.

Furthermore, businesses must recognize varied sales tax rates based on different counties or municipalities. Some local areas impose supplementary taxes that must be included in your taxation calculations.

Common Sales Tax Exemptions in Nebraska

Certain businesses and organizations are eligible for sales tax exemptions, which include:

• Purchases intended for resale (requires a valid resale certificate)
• Sales to qualifying nonprofit entities
• Specific manufacturing and agricultural transactions

To claim an exemption, businesses need to utilize the correct exemption certificates and maintain detailed records. Misuse of exemption certificates can result in audits and financial penalties.

Remote Seller and Marketplace Sales Tax Rules in Nebraska

Nebraska has set forth particular rules for remote sellers and marketplace platforms such as Amazon, eBay, Shopify, and Etsy.

The economic nexus threshold operates at $100,000 in sales or 200 transactions, prompting businesses to adhere to Nebraska’s remote seller sales tax regulations when these limits are surpassed.

What Triggers a Sales Tax Audit

Reasons for triggering a sales tax audit in Nebraska may involve missing or incorrect sales tax filings, repeated late payments, disparities between reported sales and actual revenue, and misuse of exemption certificates.

To lessen the risk of audits, businesses should keep comprehensive records of sales, exemptions, and tax payments and conduct regular internal audits to ensure accuracy in tax submissions.

FAQs About Sales Tax in Nebraska

Here are some frequently asked questions about Nebraska sales tax:

Does Nebraska tax digital goods?

Certain digital goods may be taxable. Always consult the latest state regulations.

What about out-of-state businesses?

If you exceed the economic nexus threshold of $100,000 or 200 transactions, sales tax collection is mandatory.

What if I overcharge or undercharge sales tax?

You may need to issue refunds or remit the shortfall to the state. Hence, maintaining precise records is imperative.

Are any services taxable in Nebraska?

While many services are non-taxable, some like repairs and maintenance services may incur tax.

Stay Compliant With doola

Ensuring compliance with sales tax regulations doesn’t have to be cumbersome. With informed insights and the right instruments, you can prevent penalties while ensuring smooth business operations.

doola can offer assistance and resources to ensure compliance, extending support through comprehensive financial solutions, tax guidance, and bookkeeping services.