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South Dakota v. Wayfair, Inc. Collection of Sales Tax by Remote Sellers FAQs

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR) 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, sign up for the subscription service at revenue.nebraska.gov to get updates on your topics of interest.

What is the U.S. Supreme Court’s decision in the Wayfair case?

The Court ruled that states can require certain retailers with no physical presence in a state, including online retailers, to collect and remit the applicable sales tax on sales delivered to locations within their respective state. Click here for more information: South Dakota v. Wayfair

Does the decision create a new tax in Nebraska?

No. Prior to the Court’s decision in Wayfair, retailers were not required to collect sales tax unless they established a physical presence in the state. Purchases from retailers without a physical presence were always subject to Nebraska’s use tax. The use tax is paid directly to DOR by the purchaser when no sales tax has been collected on taxable products or services. There is a line on the Nebraska Individual Income Tax Return, Form 1040N, where individuals are able to directly report and pay the use tax.

What does the decision mean for Nebraska-based retailers?

If you are making sales of property or services into other states, you may have an obligation to collect and remit those states’ sales taxes. If you are licensed to collect and remit tax in Nebraska, you should continue doing so. You can obtain information on the licensing requirements for other states at : taxadmin.org. You can register with 23 other states using the Streamlined Sales Tax Registration System (SSTRS) registration form, which is available at: sstregister.org.

What does the decision mean for Nebraska purchasers?

If you make purchases of property or services from online retailers or retailers located in other states that have not previously collected sales tax, many of these retailers will now begin collecting the applicable sales tax on your purchases delivered into Nebraska. If any purchases are not taxed appropriately, you still have a responsibility to report the applicable use tax directly to DOR on these purchases.

Are there software services available to retailers for assistance in collecting and remitting sales tax?

Help with calculating, collecting, preparing returns, and remitting the sales tax is available from various service providers and practitioners. Nebraska, as a member of the Streamlined Sales and Use Tax Agreement, contracts with providers for these sales tax collection services. To learn more, see information related to Certified Service Providers at: streamlinedsalestax.org.

How does a seller register to collect tax in Nebraska?

Businesses can register online at: revenue.nebraska.gov or businesses can register with Nebraska and the other 23 Streamlined Sales Tax states by accessing the Streamlined Sales Tax Registration System (SSTRS) registration form, which is available at: sstregister.org.

 

Impact on Remote Sellers

What does the decision mean for remote sellers?

Remote sellers are retailers that do not have a physical presence in Nebraska, but make sales to purchasers located in Nebraska. Prior to the Wayfair decision, the state could not require remote sellers who were engaged in business in Nebraska to collect sales tax if the seller did not have a physical presence in the state. After Wayfair, if you are a remote seller who is also engaged in business in Nebraska as defined under Neb. Rev. Stat. § 77-2701.13, you must obtain a sales tax permit on or before January 1, 2019, and must begin collecting and remitting sales tax on sales made to customers located in Nebraska. Remote sellers that are not engaged in any of the activities listed in § 77-2701.13 are not required to collect but may, for the benefit of their Nebraska customers, register and volunteer to collect the tax in Nebraska.

When does this collection responsibility begin?

Although the Wayfair decision is effective immediately, DOR understands that the new standards represent a significant change for some remote sellers that may need time to adjust to the new standards. To provide for a transition period for retailers engaged in business in Nebraska, a remote seller must register and begin collecting tax in Nebraska starting January 1, 2019.

Is there a small seller exception from this collection responsibility?

Yes. To minimize the burden on interstate commerce consistent with the Wayfair opinion, DOR intends to administer the collection responsibility consistently with the thresholds looked upon favorably by the U.S. Supreme Court in the Wayfair decision. Remote sellers are only required to register and collect Nebraska tax if they have more than $100,000 of sales into Nebraska or 200 or more separate transactions for delivery into the state annually. However, these sellers may still volunteer to register and collect the tax in this state as a benefit to their Nebraska customers.

Is the $100,000 of sales based on total sales or taxable sales?

The $100,000 threshold is based on total or gross sales.

Is there any retroactive liability for failing to collect sales taxes in the past?

No. The responsibility for collection begins January 1, 2019 and DOR will not seek any retroactive payments from remote sellers that did not have physical presence in Nebraska, but have been engaged in business in Nebraska before January 1, 2019.

Further Questions?
Contact Nebraska Taxpayer Assistance
at 800-742-7474 (NE & IA) or 402-471-5729

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