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.

There are provisions in Nebraska statutes that allow both cities and counties to adopt a local sales and use tax.

Dakota County imposes a county sales and use tax rate of 0.5%. The Dakota County sales and use tax rate is only applicable in areas that are outside of municipalities in Dakota County with their own local sales and use tax.  

Effective January 1, 2020, Gage County imposed a county sales and use tax rate of 0.5% that is applicable throughout all of Gage County, including within municipalities with their own local sales and use tax.

Click here for a chart listing all jurisdictions with a local sales and use tax.

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. 

There are different laws that apply to county sales and use taxes.  Currently, only Dakota and Gage counties impose a county sales and use tax, but each is applied differently. 

For taxable sales in Dakota County, the answer is No.

Dakota County’s tax is only imposed on taxable sales within the boundaries of the county, but outside the city boundary of any city that imposes a city sales tax. Taxable sales made in a city that is located in Dakota County will be subject to the state rate and the city rate only. Taxable sales made within Dakota County, but outside a city that imposes a city sales tax, will be subject to the state rate and the Dakota County rate only.

For example, a taxable purchase made in Emerson (which does not impose a local sales tax) is subject to the state sales tax rate of 5.5%, plus the county sales tax rate of 0.5%, for a total sales tax rate of 6%. Please be aware that Emerson is located within three counties: Dakota, Dixon, and Thurston counties. For taxable sales made to addresses in that part of Emerson that is inside of Dakota County, the correct tax is 5.5% state tax, plus the 0.5% county tax. The total tax would be 6%. For taxable sales made to addresses in Emerson that are not located inside of Dakota County, the correct tax rate is the 5.5% state tax.   

A taxable purchase made in South Sioux City (one of the cities within Dakota County that imposes a city sales tax) is subject to the state sales tax rate of 5.5%, plus the city sales tax rate for South Sioux City of 1.5%, for a total sales tax rate of 7%. No county sales tax is due on sales made within the boundaries of South Sioux City.

For Gage County, the answer is Yes.

Gage County’s tax is imposed throughout all of Gage County.  Unlike Dakota county, the Gage County sales and use tax is in addition to both the state and city tax in any of the Gage county cities that have a city tax.  For instance, sales made in Beatrice will be subject to the state rate of 5.5%, the Beatrice city tax of 2%, and the Gage County sales tax of 0.5%, for a total tax rate of 8%.  

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.

The penalty is $25, or 10% of the tax, whichever is greater.

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.

Any retailer filing monthly returns and engaged in business at more than one location selling property or providing services subject to sales and use tax may make application to file a combined monthly  Nebraska and Local Sales and Use Tax Return, Form 10. Each sales location must hold a sales tax permit, and all licensed locations must be subject to common ownership (the same person or persons own 80% of each licensed location). To request permission to file a combined sales and use tax return, file  Nebraska Combined Filing Application, Form 11.

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.

Business use tax is reported by licensed retailers on the  Nebraska and Local Sales and Use Tax Return, Form 10. If the business is not a retailer, use tax is reported on the  Nebraska and Local Business Use Tax Return, Form 2. Individual use tax is reported on the  Nebraska Individual Income Tax Return, Form 1040N, line 38, or the  Nebraska and Local Individual Use Tax Return, Form 3.

Several specific services and labor charges are taxed. See the "Frequently Asked Questions About Nebraska Sales and Use Tax on Certain Services," and the information guide " Nebraska and Local Sales Tax."

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?”

Except for separately stated charges for U.S. postage on direct mail, these charges are taxable whenever the item purchased is taxable and the charges are paid to the retailer of the item. See Sales and Use Tax Regulations 1-026, Finance, Carrying, Service, and Interest Charges; and 1-079, Delivery Charges.

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.

Yes. Sales made by retailers via the Internet are taxed in the same manner as sales made by other retailers, including those via mail-order catalogs. If the seller is licensed to collect Nebraska sales tax, then the customer pays the sales tax to the seller. If the seller is not licensed to collect Nebraska sales tax or fails to collect the sales tax, then the customer becomes personally liable for the tax and must pay it directly to DOR as use tax. Forms are available on our website for remitting the use tax.

Exception – Sales of household goods and personal effects made on an online auction site, by an individual, are not taxable if:

• The sale is made only once per calendar year for a period of three days or less; and
• The type of property placed on the online auction site does not include anything which is similar to that sold by the individual (or any member of the individual's household) in a trade or business.

If you are a seller via the Internet, click here for more information.

• 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."

Depreciable agricultural machinery and equipment purchased for use in commercial agriculture is exempt from sales and use tax provided the purchaser properly completes and gives to the seller a  Nebraska Resale or Exempt Sale Certificate, Form 13, Section B.

Machinery or equipment that is used directly in planting, tilling, harvesting, haying, fertilizing, or irrigating crops, and equipment used in raising or feeding livestock may qualify for the exemption. Refer to DOR's information guide, " Agricultural Machinery & Equipment."

Additionally, purchases of repair and replacement parts used to repair agricultural machinery and equipment used directly in commercial agriculture, that occur on or after October 1, 2014, are exempt from sales and use taxes unless sold to an Option 2 or Option 3 contractor. More information on qualifying repair and replacement parts can be found in DOR's " Agricultural Machinery & Equipment" information guide.

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.

Yes. The sale and delivery of aircraft to a purchaser in Nebraska is subject to the Nebraska and local sales or use tax unless a specific exemption applies. The local sales or use tax due is based on the address where the aircraft is hangared. See Sales and Use Tax Regulation 1-067, Aircraft and Related Services.

In addition, an aircraft which is purchased in another state and brought into Nebraska within one year of purchase, and is either regularly based within this state or has more than one-half of the aircraft’s operating hours in this state, is subject to sales or use tax in Nebraska.

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.

Purchasers who have not paid the Nebraska sales tax to the seller of the aircraft can resolve their use tax liability by filing a  Nebraska and Local Business Use Tax Return, Form 2, or a  Nebraska and Local Individual Use Tax Return, Form 3. Penalty and interest may be assessed if the tax is not timely remitted.

If you need additional information, please contact Taxpayer Assistance at 800‑742‑7474 (toll free in Nebraska or Iowa), or 402‑471‑5729.

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.

Charges for the development and maintenance of web pages which are hosted by the developer or a third-party hosting entity are not taxable. These charges are not taxable even though the purchaser may be provided with passwords by the developer or third-party host in order to access the web page to update or delete files, create file directories, change permissions, etc.

Separately stated charges for hosting and maintenance of web pages are not taxable.

See Revenue Ruling 01-10-2 for more information.

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.

Yes. Sales of “content cards” or “digital release cards” which allow purchasers to download specific digital goods are subject to tax at the time and place of purchase if the specific digital product is taxable when purchased directly. For example, the sale of a digital release card for the latest music of a specific vocalist is subject to sales tax. When the purchaser utilizes the digital code contained on the card to download the specific digital good, no sales tax is charged by the digital provider. 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.

No. Purchases of property by authorized military personnel from Federal commissaries and stores are exempt from sales and use tax. However, purchases of property by authorized military personnel from private sector retailers, including purchases from Internet retailers, are subject to tax. Military personnel may owe use tax if the private sector retailer does not collect the applicable sales tax. Use tax can be reported on the Nebraska and Local Individual Use Tax Return, Form 3, or the  Nebraska Individual Income Tax Return, Form 1040N.

The Good Life Transformational Projects Act (Act) was created by Laws 2023, LB727 and provides for the establishment of special taxing jurisdictions within Nebraska, called Good Life Districts (GLDs). A GLD is established pursuant to Neb. Rev. Stat. §77-4405.  To establish a GLD, an application must be approved by the Department of Economic Development (DED). A GLD is a defined area that has a reduced Nebraska (state) sales and use tax rate for purchases within the GLD. 

Effective July 1, 2024, a change was made by LB 1317, which provided that the state sales tax rate will be 5.5% on transactions made (1) outside a Nebraska GLD, Or (2) inside a GLD that is not within a city's boundaries. These are reported on the OUTSIDE a GLD line on the GLD rate box.

The reduced state sales tax rate of 2.75% applies only on those transactions made within a GLD that are also within a city's boundaries. The local sales tax rate and any city imposed occupation tax must still be collected in areas located inside a GLD.

Maps showing the location and boundaries of the GLDs are in the Sales Tax Rate Finder on the Nebraska Department of Revenue’s (DOR) website.  There is also a Rates and Boundaries file, which is a comma separated list by address ranges, which has the correct tax rate and dates the rates are effective.  The Rates and Boundaries file is updated quarterly and is on DOR’s website. A tax rate can only change on the first day of a calendar quarter.

Transactions subject to sales and use tax that occur inside a GLD and also inside of a city's boundaries 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 location that the purchaser takes possession of the property or receives the services. Licensable motor vehicles are an exception, they are taxed at the address where the vehicle is licensed.

You need to collect the 2.75% GLD reduced state sales tax rate on sales delivered into a GLD that are also within a city's boundaries. You need to collect the 5.5% state sales tax rate on sales delivered in Nebraska but outside of a GLD or within a GLD but outside of a city's boundaries.

No, do not complete Section C or the GLD rate box if you only have transactions that are outside a GLD or that are inside a GLD but not also within a city's boundaries. This is only applicable to GLD 802-802 where a large portion of this GLD is outside of any city's boundaries.
Only complete the Section C or the GLD rate box on Forms 2 or 3 when you have transactions made within a GLD that is also within a city's boundaries.

For reporting purposes, you need to identify all sales made both inside a GLD and inside a city's boundaries separately from sales made outside of a GLD or inside a GLD but outside a city's boundaries. Complete Schedule I, Section C 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. You will need to complete Section C for the correct calculation of the amount to enter on Lines 3 and 4 for Form 10. Section C, Line 1 should include all sales that are made outside a GLD or inside a GLD but outside a city's boundaries. These are taxed at 5.5%. Section C, Lines 2 and 3 should include the tax on sales made or use tax owed for transactions made inside a GLD that are also inside a city's boundaries. Report GLD amounts on the correct GLD line. For NebFile users, you must complete the Good Life District page to report sales within a GLD.

The state sales tax rate is 2.75% on sales delivered in a GLD that is also within a city's boundaries. The state tax rate is 5.5% on sales delivered outside a GLD or inside a GLD but not within a city's boundaries. You must complete the Section C when you have sales to report from inside a GLD that is also within a city's boundaries. 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 that is within a city's boundaries, 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 Section C. 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.

If none of your sales are within a GLD or within a GLD but outside of a city's boundaries, then you do not complete Schedule I, Section C. Calculate your Form 10 using the Nebraska state rate of 5.5% for all sales and use taxes. Section C is only to be completed when you have sales within a GLD that are also within a city's boundaries. For NebFilers, do not complete the Good Life District page. This page is only to be completed when you have sales within a GLD that are also within a city's boundaries.

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 separate 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 reporting transactions that were made inside a GLD and within a city's boundaries must complete Section C of Schedule I. Section C must be completed PRIOR to completing lines 3 and/or 4 on the Form 10. Section C is used to calculate the state tax rate on net taxable sales made outside of a GLD and the GLD rate on net taxable sales made inside of a GLD. For NebFilers, you need to complete the Good Life District page to report sales within a GLD.

Retailers who have been approved to file a combined Form 10 are required to file using the NebFile system. Complete Schedule II section on the NebFile system. Only complete the Good Life Taxable Sales field if you have taxable transactions made within a GLD that are within a city's boundaries. On the Schedule II under the location ID that has sales made within a GLD that are also within a city's boundaries, 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 that are within a city's boundaries. Do NOT include any sales that are made inside a GLD but outside a city's boundaries in the column titled Good Life Taxable Sales. 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.

Additionally, the Mall is located within Gretna's boundaries and is located within GLD 802. The city occupation tax is on all sales made by your business; however, the state sales tax rate of 2.75%, and Gretna's local sales tax rate of 2% are on sales picked up at your business location. Sales shipped to an address outside the Mall are still subject to the city occupation tax. The state sales tax rate and any applicable local sales tax rate is based on the delivery address. 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.
 
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. Schedule I and 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 GLD 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 and within a city's boundaries or both inside and outside of a GLD.
 
Purchases that are shipped to an address in Nebraska from inside a GLD to a location outside of a GLD or inside a GLD but outside a city's boundaries, 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 of Form 10. 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 you ship purchases from one GLD to another GLD, the state sales tax rate is 2.75%.  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.
 
When reporting sales from one GLD to another GLD, you report the sales to the GLD based on the delivery address.  When you complete the Schedule I, Section C you report sales delivered to another GLD under that GLD code number, not the GLD where the sale was initiated from.
 

Sign up on the “Subscribe to Notifications” link to receive a text or email when changes occur related to the tax program(s) that you select. 

You may request a refund by submitting a  Claim for Refund of Sales and Use Tax, Form 7, or  Form 7AG (for certain agricultural equipment) to DOR.

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

The 501(c) federal status (exemption from federal income tax) does not automatically mean the nonprofit organization is exempt from Nebraska sales tax. Very few nonprofit organizations actually qualify for the sales and use tax exemption. Sales Tax Regulations 1-012, Exemptions, and 1-090, Nonprofit Organizations, identify which organizations are exempt in Nebraska. Also, refer to DOR's information guide,  Nebraska Taxation of Nonprofit Organizations.