Changes in Local Sales and Use Tax Rates – Nebraska

Effective January 1, 2017, certain Nebraska cities and villages will increase sales and use tax rates. The village of Meadow Grove enacted a new local sales and use tax rate of 1.5%. Elmwood, Weeping Water, and Wilber will increase sales and use tax rates to 1.5% and the city of Papillion will increase its local sales and use tax rate to 2%.

Consumers should be aware that there will be additional sales tax on purchases in these areas. Retailers should be ensure that they are prepared to appropriately collect and remit the increased sales tax beginning January 1, 2017.

For more information regarding the sales and use tax rate increases, sales and use tax compliance, and related information, visit the Nebraska Department of Revenue’s website, available at http://www.revenue.nebraska.gov/salestax.html.

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2015 Changes to Nebraska Sales and Use Tax

The Nebraska Legislature has made several changes to the sales and use tax. Starting in 2016, zoo admissions and memberships will be exempt from sales tax. The Nebraska Legislature enacted LB 419, a sales and use tax exemption primarily to support Nebraska’s nationally accredited zoos and aquariums. There are four nationally accredited zoos in Nebraska—Omaha’s Henry Doorly Zoo and Aquarium, Lincoln’s Children’s Zoo, Lee G. Simmons Conservation Park and Wildlife Safari, and Riverside Discovery Center. Zoo purchases and gross receipts from the sale of daily admission and memberships will no longer be subject to sales and use tax. Gross receipts derived from sales other than admissions or memberships, such as concessions, will still be subject to tax. The intent of the new law is to allow these zoos to reinvest the funds to further attract visitors and boost local tourism.

Also starting in 2016, purchases by sanitary drainage districts will be exempt from sales and use tax.

Lastly, the Legislature also passed a law which prepares Nebraska for the use of funds that would be generated if Congress expands the states’ authority to tax transactions with out-of-state retailers. If the federal government passes this type of legislation, LB 200 authorizes the funds to be credited to the Property Tax Credit Cash Fund—a fund for reducing property taxes. LB 200 was passed in anticipation of federal legislation such as the Marketplace Fairness Act, which would grant states the additional power for taxing transactions with out-of-state retailers. At this time, no federal legislation has made it through the House of Representatives. We will provide additional updates as this issue and pending federal legislation develops.

© 2015 Houghton Vandenack Williams
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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.

© 2015 Houghton Vandenack Williams Whitted Weaver Parsonage LLC
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Updates to Nebraska Local Sales Tax

By Joshua A. Diveley.

The Nebraska Department of Revenue announced that beginning April 1, 2015, the following locations will implement a local sales and use tax:

  • Benedict (1.5%);
  • Callaway (1.0%);
  • Dakota County (0.5%);
  • Decatur (1.0%);
  • Elwood (1.0%);
  • Stanton (1.5%);
  • Upland (0.5%); and
  • Utica (1.5%).

Beginning April 1, 2015, the following cities and villages will increase their local sales and use taxes as follows:

  • Bancroft (1.5%);
  • Bassett (1.5%);
  • Burwell (1.5%);
  • Duncan (1.5%);
  • Fairbury (2.0%);
  • Howells (1.5%);
  • Minden (2.0%);
  • Nebraska City (2.0%);
  • Norfolk (2.0%);
  • Rushville (1.5%);
  • Wayne (1.5%); and
  • York (2.0%).

Also, beginning April 1, 2015, municipal boundaries for the following cities will be modified: Beatrice, Fairbury, Kearney, Lincoln, Neligh, Plattsmouth, West Point, and York. Additional information is available at:   http://www.revenue.nebraska.gov/salestax.html.

© 2014 Parsonage Vandenack Williams LLC

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What Law Governs When a Customer in Another State Buys My Product Over the Internet?

A Business FAQ with Mary E. Vandenack.

If you sell products over the internet, it is important to be aware that you are going to be subject to the laws and regulations of the state that you are located in, the states that you are selling in, and certain federal laws. There are going to be laws that govern your relationship with the persons who are buying your product, and there will be laws impacting you from a tax perspective so you are going to want to become familiar with each. It’s extremely important to give a lot of attention to your website terms and conditions. There are certain things that you can cover in those terms and conditions. You cannot get out of the application of different federal and state laws in those terms and conditions, but you can engage in certain aspects of control.

© 2014 Parsonage Vandenack Williams LLC

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Do I Have to Collect Taxes for Sales Made Over the Internet?

A Tax FAQ with Mark A. Williams.

If you make a sale over the Internet, generally, if sales tax apply you do have to collect the sales tax. The complication is you might be a business in the state of Nebraska and you might make one sale in the state of Louisiana. If you’re not advertising in that state and you don’t have a business location in that state, generally you wouldn’t be required to collect sales tax there. There is a legal concept called “nexus.” If you don’t have sufficient nexus, you usually don’t have to pay sales tax; however, some states are adopting laws that just require on every sale in that state you do have to pay sales tax. So it’s a very complex set of rules right now that are changing every day because of the growth of the Internet and you need to make sure you have good tax advisers to help you through that process.

© 2014 Parsonage Vandenack Williams LLC

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Does an Out-of-State Retailer Have to Collect Sales Tax?

A Tax FAQ with Mary E. Vandenack.

As a generality, an out-of-state retailer is subject to collecting tax in another state if they have nexus with the state in which they are making a sale. The definition of nexus varies state to state so it’s really important that a business look at what nexus means in a particular state.

In addition, different states tax different types of things so you have to really understand the nature of the business to determine whether you’re going to be subject to sales tax in another state.

© 2014 Parsonage Vandenack Williams LLC

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