Wednesday, March 27, 2024

What Is The Sales Tax In Nebraska

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Nebraska Sales Tax Software

Nebraska Tax Sales – Tax Liens

Regardless of the volume of taxable sales that you make in Nebraska, keeping up with the requirements for collecting and remitting sales taxes to the state can be a time-consuming and confusing process. And if you sell in multiple states, its an even bigger headache, as they each have their own sets of regulations, procedures, and rates. However, this burden can be eased by using a suite of sales tax calculator software designed to manage sales tax collection and reporting.

TaxTools gives you back the time you spend on tracking your taxable sales in Nebraska and elsewhere so that you can use it to focus on other aspects of growing your business. With the ability to produce up-to-date reports on your taxable sales, TaxTools allows you to stay on top of things while also meeting state requirements for record-keeping. The program will also periodically check for changes to state sales tax laws that may impact you, and it allows you to file your sales tax returns and make payments directly. TaxTools integrates smoothly with all eCommerce platforms, so you wont have to change anything about the way you already do business to take advantage of its benefits.

So, if youre ready to see how TaxTools can help streamline your business processes, for a free trial today.

What To Expect During An Audit

Thetypical audit process is shown in this flowchart. Detailed guidance for each Nebraskaaudit process stage follows in the sections below.

Nebraska regularly audits businesses required to charge, collect, and remit various taxes in the state. Many audits begin with a call from a Nebraska Department of Revenue sales tax auditor. Shortly after the call, your business will receive aNotification of Intent to Audit. This notification confirms that you were lucky enough to be chosen for a Nebraska sales tax audit.

A Notice of Determination stating the reason for the assessment and the amount will be sent to you by the Tax Commissioner no later than 12 months from the commencement of the audit.

It is good to start with getting a state and local tax professional involvedto prepare for the audit.

Option : Voluntary Disclosure Agreement

Nebraska’s lookback period: The standard lookback period isthree years.

In many situations, voluntary disclosures are a valuable tool to reduce extended periods of past exposure.

The voluntary disclosure limits the lookback period tothree years. So, if you should have collected sales tax over the past ten years but didn’t, you may benefit from doing a VDA.

A VDA may be a good option for you if:

  • You established nexus more than 3 or 4 years ago.
  • You have a sales tax collected but not remitted issue.
  • The sales tax penalty savings is MORE than the professional fees charged for the VDA.

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Protest Rights And Audit Finding Confirmation

If you disagree with an audit’s findings, you must file an appeal 60 days from theNotice of Determination date.

  • The appeal must state why the assessment, the tax, interest, or penalties are incorrect. If the Tax Commissioner believes your statement of grounds is incomplete, you must be provided with an opportunity to perfect your statement. This statement of grounds may be filed up to 60 days after the Notice of Determination.

If you have received a Notice of Assessment and haven’t talked to someone experienced in Nebraska State tax, now is the time. Do it before these deadlines are missed.

No later than nine months, plus extensions, after the statement of grounds, the Tax Commissioner must send you aNotice of Reconsideration, which states the amount of the final assessment and the reasons.

How Often Should You File

How to File and Pay Sales Tax in Nebraska

How often you need to file depends upon the total amount of sales tax your business collects.

  • Annual filing: If your business collects less than $75 in sales tax per month then your business should elect to file returns on an annual basis.
  • Quarterly filing: If your business collects between $75 and $250 in sales tax per month then your business should elect to file returns on a quarterly basis.
  • Monthly filing: If your business collects more than $250 in sales tax per month then your business should file returns on a monthly basis.

Note: Nebraska requires you to file a sales tax return even if you have no sales tax to report.

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About The Nebraska Sales Tax

The state of Nebraska has relatively simple sales tax rate, and utilizes a flat state tax rate. In addition to the flat state tax rate, the municipalities have the option to impose an additional sales tax rate, which can vary significantly depending on which jurisdiction you are in. These local tax rates would be in addition to the state rate.

I Should Have Collected Nebraska Sales Tax But I Didn’t

Many of our competitors suggest Filing aVoluntary Disclosure Agreement

in each state. This is a one-size-fits-all solution that isn’t always the best.Our sales tax professionals will work with you to determine your business’s best and most cost-effective solution.

If you determine your business has nexus, but you have not collected Nebraska sales tax, here are your options:

1. Register and pay back taxes, penalties, and interest, or

2. Complete a VDA to cut penalties .

Here is what you need to know about each option to make the best decision for your business:

Option 1: Register to Pay Back Taxes, Penalties, and Interest.

A VDA is not cost-effective if the past liabilities and penalties are minimal. Sometimes the best resolution for a business is to register with Nebraska and pay back taxes, penalties, and interest.

Be wary of the tax professionals recommending a VDA in these cases. They want to make a buck rather than look out for your best interests.

When to consider registration and payment:

  • If you established nexus less than 3 or 4 years ago.
  • The sales tax penalty is LESS than the professional fees charged for the VDA.
  • Your business does NOT have a sales tax collected issue.

Beware: Registering does not generally end past liabilities.

If you’re unsure what your past liabilities are, contact us. Our state tax professionals work with you so you can make the right choice for your business.

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How To Register For Sales Tax In Nebraska

Okay, so you have nexus! Now what?

The next crucial step in complying with Nebraska sales tax is to register for a sales tax permit. Itâs actually illegal to collect tax without a permit. So to get all your ducks in a row, start with tax registration first.

You can find directions about how to register in Nebraska on their Department of Revenue website.

When registering for sales tax, you should have at least the following information at hand:

  • Your personal contact info
  • Social security number or Employer Identification Number
  • Business entity
  • Bank account info where youâll deposit the collected sales tax

After The Audit Understand And Defend Your Businesses Rights

New Bill would lower Nebraska sales tax rate by taxing services

Upon completion of the audit, there will usually be an exit conference with the auditor. The auditor will produce an audit report with corresponding work papers to support the Nebraska sales and use tax assessment.

It is advisable to have a sales tax professional present during this meeting. This is your first opportunity to see the auditor’s findings. You’ll want to push back on areas where they have overstepped their bounds or misapplied Nebraska’s sales tax laws.

It’s best to hold off on agreeing to the sales tax assessment until a sales tax professional has reviewed it for issues that should be challenged.

Many businesses wind up drastically overpaying the state because the business owner or in-house accounting personnel weren’t well versed in the sales tax laws that, if challenged, could have reduced their sales tax liability.

We’ll cover the process of challenging a Nebraska sales tax audit assessment in detail in the following sections.

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Contact The Nebraska Department Of Revenue

The Nebraska Sales Tax is administered by the Nebraska Department of Revenue. You can learn more by visiting the sales tax information website at www.revenue.nebraska.gov.

Phone numbers for the Sales Tax division of the Department of Revenue are as follows:

  • Local Phone: 471-5729
  • Toll-Free Phone: 742-7474

I Received A Nebraska Sales Tax Audit Notice What Should I Do

Businesses that receive a sales tax audit notice need to consider the following questions:

  • If you dont have sales tax audit experience, how can you trust that the state’s auditor abides by the rules and follows proper procedures?
  • How will you know when to provide documents or when to push back?
  • Do you thoroughly understand your sales and use tax areas of exposure?
  • Controlling the audit is paramount to limiting exposure and shaping the results. Are you confident in doing that on your own?

Unless you can confidently answer these questions, hiring a professional is most likely to be the best option.

Contact usto learn how our sales tax professionals can give you the peace of mind and confidence youll need during your audit.

Visit our resource pages for more information to help you make critical decisions during your Nebraska sales and use tax audit.

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Omaha Sales Tax Region Zip Codes

The Omaha sales tax region partially or fully covers 40 zip codes in Nebraska. Remember that ZIP codes do not necessarily match up with municipal and tax region borders, so some of these zip codes may overlap with other nearby tax districts. You can find sales taxes by zip code in Nebraska here

68101

Help us keep our data updated!

If you notice that any of our provided data is incorrect or out of date, please notify us and include links to your data sources . If we can validate the sources you provide, we will include this information in our data.

Data Accuracy Disclaimer

Tax-Rates.org provides sales tax data for “Omaha” on an AS-IS basis in the hope that it might be useful, and we can offer NO IMPLIED WARRANTY OF FITNESS. While we attempt to ensure that the data provided is accurate and up to date, we cannot be held liable for errors in data or calculations we provide or any consequence or loss resulting from the of use of the Data or tools provided by Tax-Rates.org.

Principles Of Sales Taxation

How to Register for a Sales Tax Permit in Nebraska

For the practical purposes of this article, consumption taxation refers to the American retail sales tax as is currently law in Nebraska.

Consumption taxation is more pro-growth and economically neutral than income taxation. The retail sales tax is the American form of consumption taxation. In Europe, consumption taxation takes the form of a value-added tax , which is economically equivalent to the retail sales tax when they are structured correctly.

All state sales taxes underperform on revenue generation because of their structures. Specifically, state sales taxes tend to be levied upon most retail goods consumption but not upon most retail services. This structure is less economically neutral than a tax that is levied upon both goods and services evenly. The goods-weighted sales tax structure is largely an accident of history. When sales taxes were first created, the American economy was largely goods-based, and taxing services would have been administratively challenging. Yet as the American economy has modernized, it has evolved towards relatively more retail service consumption and relatively less retail goods consumption.

Because retail service consumption is often left untaxed, the sales tax base has eroded over time. As a result, just like other states, Nebraskas sales tax collects less revenue than it otherwise would if it was applied more evenly to the retail consumption base.

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Nebraska Sales And Use Tax Faqs

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. DOR recommends you do not print this document. Instead, at revenue.nebraska.gov to get updates on your topics of interest.

Food And Beverage Tax

Food ingredients are not taxable. However, prepared food is taxable at the regular state sales tax rate and the local tax rate. Thus, a restaurant bill for $100 is taxed at 5.5 percent plus the local rate. If the local rate is 1.5 percent, the total tax is 7 percent. The total bill would be $107.

Some local jurisdictions might charge an occupation tax. The occupation tax is added to the price of the prepared food and then taxed at the sales tax rates. For example, using the same rates as above, the bill is $100, the occupation tax is 2.5 percent. The business would tax the original $100 bill by 2.5 percent for a total of $102.50. The establishment would then add the 5.5 percent state tax and the 1.5 percent local tax, for a total of 7 percent.

The tax would be $7.18, and the total bill would be $107.18.

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Sales Tax On Certain Services Faqs

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue until amended. A guidance document does not include internal procedural documents that only affect the internal operations of DOR and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

This guidance document may change with updated information or added examples. DOR recommends you do not print this document. Instead, at revenue.nebraska.gov to get updates on your topics of interest.

Penalties For Late Filing

NEBRASKA TAX LIEN PRE-SALE REVIEW: $20,000,000 RETIREMENT CONDO COMPLEX!

Nebraska charges a late filing penalty equal to 10% of the tax that is due on the tax return or $25 whichever is greater.

Nebraska charges a late payment penalty equal to 10% of the tax that is due on the tax return or $25 whichever is greater. This penalty is only applied If the business files the return on time but neglects to pay the balance in total.

The state assesses the unpaid tax with a compounded interest rate of 9% per year or 0.75% per month or partial month for any unpaid tax or penalty.

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Sales Tax On Shipping Charges In Nebraska

Nebraska does apply sales tax to shipping costs. The rule of thumb is that if what youâre selling is subject to tax, then the shipping charges are also subject to tax.

If you happen to be shipping products that are both taxable and nontaxable, then shipping charges for the entire shipment are subject to tax.

How Much Is The Car Sales Tax In Nebraska

The state sales tax on a car purchase in Nebraska is 5.5%. Therefore, you will be required to pay an additional 5.5% on top of the purchase price of the vehicle.

However, this does not include any potential local or county taxes. The average local tax rate in Nebraska is 0.825%, which brings the total average rate to 6.325%.

As an example, if you were to purchase a new truck at a purchase price of $50,000, then you will have to pay an additional $2,750 in sales tax. That would bring the final price up to $52,750.

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Modernizing Nebraskas Sales Tax

Nebraskas sales tax is the most competitive component of its four major taxes, ranked 14th in Tax Foundations 2022 State Business Tax Index. Nebraskas statewide sales tax is 5.5 percent. With local sales taxes added in, Nebraskas average state plus local sales tax is 6.94%. That makes Nebraskas sales tax the 29th highest in the country, meaning that it is lower than the median state.

Still, Nebraskas sales tax can be improved. For example, LB 1264, proposed during Nebraskas 2022 legislative session, would have expanded the sales tax to include more retail consumption. The sales tax should be expanded to non-business retail consumption such as motor vehicle maintenance, painting and maintenance services for real property, investment consulting, personal care, and medical, dental, accounting, real estate and legal services. It would have also expanded more broadly to include more retail goods consumption, such as some medical equipment, medicines and motor vehicle fuel. These broad consumption categories rightfully belong in the sales tax base and would generate revenue that could be used to reduce tax rates.

Still more components of retail consumption would still remain outside Nebraskas sales tax base. Policymakers should thoroughly consider bringing as much consumption as possible under the sales tax in order to make the tax code as economically neutral as possible, and to generate revenue to modernize the rest of Nebraskas tax code.

How To Collect Sales Tax In Nebraska

How to File and Pay Sales Tax in Nebraska

Now itâs time to tackle the intricate stuff! Tax rates can vary based on the location of your business and the location of your customer, plus the levels of sales tax that apply in those specific locations.

The state-wide sales tax in Nebraska is 5.5%.

There are additional levels of sales tax at local jurisdictions, too.

Check out Quaderno’s Sales Tax Calculator see your product’s tax rate, amount, and final price in Nebraska.

Nebraska has a destination-based sales tax system, * so you have to pay attention to the varying tax rates across the state. Charge the tax rate of the buyerâs address, as thatâs the destination of your product or service.

* Important to note for remote sellers: While this is generally true for Nebraska, some state have peculiar rules about tax rates for remote sellers. Contact the stateâs Department of Revenue to be sure.

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