Nebraska Sales and Use Tax FAQs

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%, as adopted by city or county governments.

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 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. Refer to Sales Tax Regulation 1-006, Retail Sale or Sale at Retail, and Local Sales and Use Tax Regulation 9-007, Cities – Change or Alteration of City Boundaries.

Click on the Sales Tax Rate Finder to find the correct state, city, and/or county tax rate for a specific location. 

DOR 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. Returns and payments are due on the 20th of the month following 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.

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, Consumer's Use Tax, for additional information.

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, Labor Charges.

For labor charges to repair agricultural equipment, please see DOR'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 the question below, “What labor charges for work done on motor vehicles are taxable?”

Charges for consultants who only provide generalized advice and who do not provide software or updates or modifications to software are sales tax exempt. Charges for services by a consultant that result in a transfer of software, whether canned or custom, are subject to sales 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, Computer Software. 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, Warranties and Guarantees.

• Labor charges to install new or upgraded component parts or accessories on a motor vehicle are taxable. See our notice titled “ If you install or apply tangible personal property.”
• Labor charges to paint a motor vehicle are taxable. See our notice titled “If you are engaged in motor vehicle painting.”

Labor charges to repair or replace a used, worn, or damaged part or accessory on a motor vehicle are not taxable. See our notice titled “ If you provide repair or maintenance services to tangible personal property."

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.

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

During periods of high fuel costs, many retailers pass 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 generally call 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 being purchased are exempt from sales tax, then the fuel surcharge is not taxable.

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.

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 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 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 sales tax is still due from the customer, even if the deal certificate covers the full price of the article redeemed.

Transactions subject to sales and use tax occurring within a GLD are subject to a reduced Nebraska state sales and use tax rate of two and three-quarters percent (2.75%).  The local jurisdiction tax rate and any occupation taxes are not changed in areas located in a GLD.

Transactions subject to sales and use tax that occur inside a GLD are subject to the 2.75% GLD reduced state sales and use tax rate instead of the 5.5% state sales and use tax rate.  The location of the sale is generally where the purchaser takes delivery of the property or service.  Transactions made inside a GLD generally means the purchaser takes possession of the property or receives the services within a GLD. Licensable motor vehicles are an exception, they are taxed at the address where the vehicle is licensed.   

For reporting purposes, you need to identify all sales made inside a GLD separately from sales made outside of a GLD. Use Schedule I, Section C on the Nebraska and Local Sales and Use Tax Return, Form 10 to report the correct state sales tax on Line 3 of Form 10. Line 3 of Form 10 is the total state sales tax for both rates.  This is calculated on Schedule I, Section C. You will need to complete the Schedule I, Section C for the correct calculation of the amount to enter on Lines 3 and 4 for Form 10. For NebFilers, you need to complete the Good Life District page to report sales within a GLD.

If all or any of your sales are made within a GLD you must complete the Schedule I Section C to properly report the sales and use tax.  Report sales for each GLD separately as identified on Schedule I.  Then use the correct rate to calculate the sales and use tax. The totals are transferred to line 3 and 4 of the Form 10, respectively. For NebFilers, you need to complete the Good Life District page to report sales within a GLD.

You may choose to show the Nebraska and local sales tax combined on the invoice or receipt and then just identify this as Nebraska and local sales tax.  You may choose to separately show the Nebraska state tax and the local tax as two-line items and identify each as Nebraska sales tax or local sales tax.  Sales tax must always be separately identified from any city-imposed occupation tax. You cannot identify sales tax and city-imposed occupation tax as ‘sales tax’ on the invoice/receipt. 

Retailers who have been approved to file a combined Form 10 are required to file using the NebFile system. Only complete the Good Life Taxable Sales field if you have taxable transactions made within a GLD. On the Schedule II under the location ID that has sales made within a GLD, enter all Net Taxable Sales for that location.  In the Good Life Taxable Sales field, enter the portion of the total Net Taxable Sales that are from transactions made within a GLD.  The difference between the amounts entered in the Net Taxable Sales field and the Good Life Taxable Sales field is taxed at 5.5% rate.  The transactions reported in the Good Life Taxable Sales are taxed at the 2.75% rate.  The total state sales tax for sales made inside and outside of a GLD is calculated in Nebraska Sales Tax.  You must also complete the Good Life District page to report the GLD sales and calculate the correct tax for all locations.

Businesses located at the Mall have a 1.95% occupation tax imposed by the city of Gretna. Below is an example of the correct way to calculate the tax for sales delivered at your location within the Mall effective April 1, 2024. Purchases shipped to addresses outside of GLD802 are also subject to the occupation tax, but the sales tax rate is the 5.5% state tax rate and any applicable local tax when shipped to a Nebraska address.
 
Cost of item                                        $200.00
Gretna Occupation Tax 1.95%                3.90 =  This occupation tax is sent to Gretna.
Amount subject to sales tax             $203.90
GLD state sales rate 2.75%                       5.61 =  State and local tax is reported and paid on
Gretna local sales rate 2%                        4.08     Nebraska and Local Sales and Use Tax Return,
Total amount                                       $213.59     Form 10. Section C must be completed. 
 
Changes have been made to the Form 10, Schedule I, and Schedule II beginning with the tax period April 2024, so you may calculate and report the correct tax for transactions inside the GLD. Section C, GLD, has been added to the end of Schedule I for Form 10 paper filers and NebFilers will see a new entry section titled "GoodLife". The GLD section must be completed prior to completing Lines 3 and 4 of Form 10 if you have transactions subject to sales and/or use tax that are either entirely inside a GLD or both inside and outside of a GLD.
 
Purchases that are shipped to an address from inside a GLD to a location outside of a GLD in Nebraska are subject to the state tax rate of 5.5%, not the 2.75% GLD state tax rate. The "Net Nebraska Taxable Sales" and "Amount Subject to Nebraska Use Tax" will need to be identified separately for transactions inside and outside of a GLD to calculate the correct state tax to report on Lines 3 and 4. If you only have sales outside of a GLD, then you do not need to complete the Good Life District information.
 
If you file a combined sales tax Form 10, the Schedule II has a new line to report the GLD sales portion of the total Net Taxable Sales. Only those locations making sales within a GLD will need to complete the new line.  For other locations with no sales from within a GLD, then they will just need to skip the new line and complete the correct lines, as currently being done.

If your account has been canceled, you can reinstate it by filing a  Nebraska Change Request, Form 22, that can be mailed or faxed to DOR:

Nebraska Department of Revenue
PO Box 98903
Lincoln, NE 68509-8903
FAX 402-471-5927