Remote Seller and Marketplace Facilitator 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.
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What sellers are now required to register with the Nebraska Department of Revenue (DOR)?
Pursuant to LB 284, effective April 1, 2019, any seller without physical presence in Nebraska who made more than $100,000 in Nebraska retail sales, including sales through a Multivendor Marketplace Platform (MMP), in the prior calendar year or current calendar year, or who made 200 or more Nebraska sales transactions in the prior calendar year or current calendar year, is required to register and collect Nebraska and local sales taxes on sales delivered or sourced to a Nebraska address. These thresholds were included in the law change to help minimize the burden on interstate commerce.
Are there other parties that are required to register with DOR?
Yes, MMPs, also known as marketplace facilitators, who have met the thresholds described above are required to obtain a sales tax permit, collect, report, and remit Nebraska and local sales tax on sales delivered or sourced to Nebraska addresses.
Is this a new tax in Nebraska?
No. Prior to the United States Supreme Court decision in South Dakota v. Wayfair, out-of-state retailers were not required to collect sales tax in a state unless they had established a physical presence in that state. Purchases from retailers without a physical presence in Nebraska were always subject to Nebraska use tax. Purchasers are required to report use tax directly to DOR when no sales tax is collected on products or services that were taxable in Nebraska. Individuals reported this on the Nebraska Individual Income Tax Return, Form 1040N, and businesses reported this on their Nebraska Sales and Use Tax Return, Form 10. There were also some sellers that were voluntarily collecting Nebraska sales and use tax either on their own or through a Certified Service Provider (CSP) as part of the Streamlined Sales and Use Tax Agreement (SSUTA).
After the South Dakota v. Wayfair decision in June 2018, online retailers engaged in business in Nebraska began collecting this tax. LB 284 further establishes the responsibilities of remote sellers and MMPs.
What is a remote seller?
A remote seller is any seller making sales into Nebraska who does not have a physical presence in Nebraska.
What is a marketplace facilitator?
A marketplace facilitator is an entity or person who operates an MMP.
What is a Multivendor Marketplace Platform (MMP)?
An MMP is a website or service where customers can buy goods or services from many different vendors.
Is a marketplace facilitator a retailer?
Yes. LB 284 defined “retailer” under Nebraska law to include MMPs.
Is a payment processor a retailer?
A payment processor appointed by a retailer to solely process the payment between the retailer and the customer is not considered a retailer.
What is the $100,000 in sales based on?
The $100,000 threshold is based on total Nebraska retail sales (all sales other than resale, sublease, or subrent) in the prior calendar year or current calendar year, including sales made through an MMP.
What is the 200 transactions based on?
The 200 transactions are based on Nebraska sales transactions in the prior calendar year or current calendar year, including sales made through an MMP.
When does this responsibility begin?
Remote sellers who were engaged in business in Nebraska prior to the passage of LB 284 who met either the $100,000 or 200 transaction threshold must get licensed immediately, and begin reporting sales delivered or sourced to a Nebraska address effective January 1, 2019.
Remote sellers that were not required to collect and remit prior to the passage of LB 284 who exceeded the threshold in 2018 or by the end of February 2019 must obtain a sales tax permit from DOR and collect sales tax beginning April 1, 2019. The first Nebraska Sales and Use Tax Return, Form 10, was due on May 20, 2019.
Remote sellers that did not exceed one of the thresholds in 2018 or by the end of February 2019, but exceeded the threshold during 2019, must obtain a sales tax permit from DOR and begin collecting and remitting sales tax on or before the first day of the second calendar month after the threshold is exceeded.
What sales are taxable?
The Nebraska Sales and Use Tax Regulations, Statutes, and Information Guides can be found on DOR’s website revenue.nebraska.gov. You can also refer to the Nebraska State Taxability Matrix found on the Streamlined Sales Tax organization website. Nebraska Sales Tax Exemptions lists exemptions, brief descriptions and the associated regulation and/or statute reference. If you have specific questions, please contact DOR at 800-742-7474 (NE and IA), or 402-471-5729.
Is there a small seller exception from this collection responsibility?
Yes. Remote sellers are only required to obtain a sales tax permit from DOR and collect Nebraska and local sales tax if they have more than $100,000 in gross Nebraska sales, including sales through an MMP, in the prior calendar year or current calendar year, or made 200 or more Nebraska sales transactions in the prior calendar year or current calendar year for delivery into the state. However, these sellers may still volunteer to register and collect the tax in this state as a benefit to their Nebraska customers.
Can sellers register without meeting the thresholds?
Yes. Remote sellers that do not meet the thresholds are not required to collect, but may for the benefit of their Nebraska customers, obtain a sales tax permit and voluntarily collect the appropriate sales tax.
Do I need to report Nebraska sales if all of my sales are made through a Marketplace Facilitator?
Pursuant to LB 284, all remote sellers who exceed a filing threshold must file a Nebraska and Local Sales and Use Tax Return, Form 10. For specific filing instructions, see the updated Form 10 when filing your April 2019 return, due May 20, 2019.
How do I calculate the correct sales tax?
You may want to contact your current software vendor that you use for sales and use tax. Sellers that register with Streamlined Sales Tax may qualify for free sales tax calculation and reporting services. To learn more, see information related to Certified Service Providers at: streamlinedsalestax.org.
What does this mean for Nebraska-based retailers?
After South Dakota v. Wayfair, 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 this 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.