Direct Payment Permits

List of Companies with Approved Direct Payment Permits

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department 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. The Department recommends you do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.

Direct Payment Permits

Companies with annual taxable purchases of property and services in Nebraska of $3 million or more can apply for a direct payment permit (DPP). A DPP authorizes the direct payment permitholder to pay use tax on its purchases directly to the Nebraska Department of Revenue (Department), instead of paying sales tax to the retailer (see Neb. Rev. Stat. §§ 77-2705.01-77 through 2705.05 and Nebraska Sales and Use Tax Regulation 1-097, Direct Pay Permit). The Nebraska Application for Direct Payment Authorization, Form 20DP, must be sent in with a nonrefundable $10 application fee. The DPP may be reproduced and must be completed at the time it is issued to the retailer.

Direct Payment Permitholders’ Duties to Retailers

If the direct payment permitholder wishes to utilize the direct payment option, the permitholder must furnish a copy of the DPP to retailers of taxable property and services. The use of the DPP will relieve the retailer from the responsibility of collecting the Nebraska and local option sales tax on retail sales made to the direct payment permitholder. 

Option 2 and Option 3 contractors cannot accept or use the DPP issued to another company to forgo their obligation to pay or remit tax on their purchases of building materials and fixtures used in a construction project, or in the repair of annexed property in this state or any other state.

The direct payment permitholder must keep a current list of all retailers that are given a DPP and, upon request by the Tax Commissioner, must submit this list for examination. The direct payment permitholder must reissue its DPP every three years from the last date of issuance.

Direct Payment Permit – Use Tax Obligations

The direct payment permitholder is required to remit the proper Nebraska and local option use taxes on purchases directly to the Department in lieu of paying the Nebraska and local option sales tax to the retailer. The direct payment permitholder is authorized to advise retailers that it will pay the use tax, and that the usual requirements of the sales and use tax laws for the collection and payment of sales tax by the retailer are waived. 

Qualification Requirements

To maintain the use of the DPP, the direct payment permitholder must have annual taxable purchases in Nebraska of property and services totaling at least $3 million, excluding purchases for which a resale certificate could be used. The direct payment permitholder, or any of its controlled subsidiaries to whom the direct payment permit has been delegated, agrees to accrue and pay all taxes on taxable property and services purchased, leased, or rented. The sales and use tax return is due to the Department on or before the 20th day of the month following the date of purchase, lease, or rental. This is the case unless the property or service is exempt from tax, or does not qualify to be purchased with the DPP.

Temporary Storage

The Nebraska and local option tax that is remitted by the direct payment permitholder is treated as sales tax. Therefore, the direct payment permitholder cannot claim a temporary storage exemption on purchases made with the DPP from any Nebraska licensed retailer, or from any retailer engaged in business in Nebraska. See Neb. Rev. Stat. § 77-2704.44.

Collection Fee

The direct payment permitholder is not entitled to any collection fee on those taxes due on taxable purchases made using the DPP. The direct payment permitholder will directly report the tax on taxable purchases as a use tax on its Nebraska and Local Sales and Use Tax Return, Form 10, or Business Nebraska and Local Use Tax Return, Form 2.

Certain Transactions Not Permitted

A direct payment permitholder may utilize its direct payment option, provided the permitholder gives a copy of the DPP to the retailer. However, the permitholder cannot use its DPP in connection with the following transactions:

Economic Tax Incentive Programs

Companies that are qualified under any of the economic tax incentive programs are required to pay all sales and use taxes, even though they will qualify for a refund of the tax.  Under the direct payment provisions, the direct payment permitholder must remit the appropriate Nebraska and local option use tax, and then apply for a refund.

Permit Transferable or Assignable

The direct payment permitholder may delegate its DPP to any of its subsidiaries in which it has at least an 80% ownership interest, provided the subsidiary is not the holder of its own DPP.  Companies that delegate their DPPs accept responsibility for their use by any controlled subsidiaries.

Permit Revocable

The Tax Commissioner may revoke a DPP any time the direct payment permitholder fails to comply with the conditions under which the permit was granted, or for any other reason constituting the misuse of the permit.  Upon revocation of the permit, the direct payment permitholder is required to notify all retailers that were previously given copies of the permit that it has been revoked or relinquished.

The Department has approved the Nebraska Application for Direct Payment Authorization, Form 20DP, for the following companies:


A-E
 

F-N
 

N-Z

3M Company
02-1870831
Effective Date of Permit - October 1, 2003

First Data Resources, Inc.
01-1684957
Effective Date of Permit - September 1, 2000

Nebraska Furniture Mart, Inc.
01-322857
Effective Date Of Permit - November 17, 2003

Archer Daniels Midland Company
01-9618694
Effective Date of Permit - January 1, 2006

First Data Technologies, Inc.
01-7006594
Effective Date of Permit - September 20, 2017

Nucor Steel
01-2003856
Effective Date Of Permit - May 1, 2012

Becton Dickinson & Co.
01-5288630
Effective Date of Permit - September 27, 2017

Flint Hills Resources, LLC
01-11419520
Effective Date of Permit - April 1, 2015

Omaha Public Power District
01-552615
Effective Date of Permit - August 1, 1998

Burlington Northern & Santa Fe Railway
01-1454188
Effective Date of Permit - May 1, 1998

Goodyear Tire & Rubber Company/The
01-552283
Effective Date of Permit - December 1, 1997

Omaha World Herald Company
01-307173
Effective Date of Permit - November 1, 2000

Cargill, Inc.
01-578835
Effective Date of Permit - September 1, 2000

Home Depot USA, Inc.
01-8695881
Effective Date of Permit - February 1, 2004

Public Power Generation Agency
04-10099689
Effective date of Permit - May 5, 2008

Cargill Meat Solutions Corporation
01-2414961
Effective Date of Permit - October 1, 2016

Hormel Foods Corporation
01-169358
Effective Date of Permit - December 1, 2004

Tyson Fresh Meats, Inc.
01-10589694  
Effective Date of Permit - July 26, 2009

ContiTech USA, Inc.
01-10053999  
Effective Date of Permit - March 7, 2017

Kellogg USA, Inc.
04-6454879
Effective Date of Permit - May 1, 1999

Tyson Processing Services, Inc.
04-7890303
Effective Date of Permit - August 1, 2003

Covidien LP
01-8118914  
Effective Date of Permit - May 25, 2010

Li-Cor Incorporated
01-1720597
Effective Date of Permit - November 1, 2000

Union Pacific Railroad Company
04-7964390
Effective Date of Permit - May 1, 1998

Duncan Aviation
04-326755
Effective Date of Permit - August 1, 2003

Martin Marietta Materials, Inc.
01-10383077
Effective Date of Permit - February 1, 2016

UPS Oasis Supply Corporation
02-7887256
Effective Date of Permit - June 20, 2005

Duonix Beatrice, LP
01-11144017
Effective Date of Permit - April 1, 2015

Molex LLC
01-3075664
Effective Date of Permit - May 1, 2011

Valero Renewable Fuels Company, LLC
04-10467645
Effective Date of Permit - April 1, 2015

Evonik Degussa Corporation
01-8115818
Effective Date of Permit - December 1, 2003

Nature Works  f/k/a Cargill Dow LLC
01-8209952
Effective Date of Permit - September 1, 2000

Valmont Industries, Inc.
01-120715
Effective Date of Permit - January 1, 2000

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