Nebraska Individual Use Tax
Did you purchase items over the Internet or by mail order? If you did, you may owe use tax.
Nebraska law requires that if sales tax is not collected by the seller on any taxable sale, the purchaser must remit the tax directly to the state. When remitted by the purchaser, the tax is called use tax. The same items and services that are subject to Nebraska and local sales taxes are subject to Nebraska and local use taxes. If the item purchased is delivered to a Nebraska address, it is subject to sales or use tax on the total purchase price which includes any shipping, handling, and delivery charges.
Examples of situations when use tax is due:
- If you buy taxable items over the Internet and do not pay Nebraska and local sales tax;
- If you buy taxable digital goods such as music, movies, music videos, TV shows, books, and ring tones and do not pay Nebraska and local sales tax;
- If you buy taxable items through a home shopping channel and do not pay Nebraska and local sales tax; and
- If you buy taxable items by mail order and do not pay Nebraska and local sales tax.
The use tax rate is exactly the same as the state and local sales tax rate where you reside in Nebraska. Individual state and local use tax may be reported and paid:
- On line 41 of the
Nebraska Individual Income Tax Return, Form 1040N; or - By using the Nebraska and Local Individual Use Tax Return, Form 3.
The Nebraska state sales and use tax rate is 5.5%. Click here for a complete list of local rates.
Example:
I order gifts online to be delivered to each of my two sisters. One sister’s gift is delivered to her home in Scottsbluff, Nebraska. The other sister’s gift is delivered to her home in Kansas. The seller does not charge sales tax on either gift. I owe state (5.5%) and local (1.5%) use tax on the cost of the gift and any delivery charge for the gift sent to Scottsbluff. I do not owe Nebraska use tax on the gift delivered to Kansas.
Refer to the Nebraska Use Tax Information Guide for more details.
