Nebraska Department of Revenue Issues Guidance on Market-Based Sourcing Method for Sales Tax Collection

The Nebraska Department of Revenue issued guidance on the market-based sourcing method for sales tax collection. For the year-end 2014 and subsequent years, the market-based sourcing method replaces the previously used costs of performance method. This guidance applies to the sale of intangible property or services, but not to tangible personal property.

The market-based sourcing method focuses on the receipt or use of the product. This method allocates Nebraska taxes based upon the proportion of the sale received or used within the state of Nebraska. In contrast, the previous rule applied the tax based upon the location where the costs of the income producing activity were incurred.

Specific details regarding the various rules for different types of sales may be found at the following link or by going to the Nebraska Department of Revenue website.

http://www.revenue.nebraska.gov/info/market_based_sourcing.html.

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