Nebraska’s sales tax system can feel a little complex, and for good reason. The state imposes a 5.5% statewide sales tax, but many cities and counties add their own local rates on top of that. To make things even more interesting, if a city has its own sales tax, the county’s rate often doesn’t apply within that city’s limits. Whether you’re running a boutique in Lincoln or a café in Omaha, understanding where and how sales tax applies is key to staying compliant.
What is the Nebraska sales tax rate?
Nebraska has a statewide sales tax rate of 5.5%, but that’s just the starting point. In addition to the state rate, many cities and a few counties in Nebraska impose their own local sales taxes. These local rates can be set at 0.5%, 1%, 1.5%, 1.75%, or 2.0%, depending on where your sale takes place.
Because of this, the total sales tax rate in Nebraska can vary. It’s common to see combined rates of 6%, 6.5%, 7%, 7.25%, and 7.5%, depending on the location. For example:
- Omaha sales tax rate is 7% (5.5% state + 1.5% local)
- Grand Island sales tax rate is 7.5% (5.5% state + 2% local)
- Lincoln sales tax rate is 7.25% (5.5% state + 1.75% local)
When determining which local tax applies, the place of sale or point of delivery decides the rate. For example, if you’re a retailer in Omaha making an in-person sale, you’ll charge Omaha’s local rate on top of the state rate. But if you deliver goods to a customer in another city or county, that location’s rate applies instead.
It’s also important to note that in many areas, if a city imposes a local sales tax, the county tax does not apply within that city’s limits. To find the sales tax rate by location, use the Nebraska Department of Revenue’s sales tax rate finder, where you can look up rates by searching with an address.
How to calculate sales tax in Nebraska?
Calculating sales tax in Nebraska depends on where your sale takes place or where the product is delivered. You’ll start with the state rate of 5.5% and then add any applicable local sales tax based on the delivery address or point of sale.
For example, if you make a sale in Omaha, which has a 1.5% local rate, the total tax you’d collect is 7.0% (5.5% state + 1.5% local). But if your customer is in a nearby area without a city tax, you’d only charge the 5.5% state rate.
Utilice nuestra calculadora de impuestos sobre las ventas
If you want to make pricing easier for your customers, try using our reverse calculadora de impuestos sobre las ventas. It helps you work backward from the total amount you want to charge, perfect for displaying clean, tax-inclusive prices on menus, price tags, or invoices.
What is subject to sales tax in Nebraska?
In Nebraska, most tangible personal property and some services are subject to sales tax. This includes retail sales, rentals, and leases of goods such as clothing, furniture, electronics, and home goods. If your business sells or delivers these items to customers in Nebraska, you’ll generally need to collect and remit sales tax.
Nebraska also taxes certain services. These include things like building cleaning and maintenance, motor vehicle repairs, personal care services (such as tanning and tattooing), and entertainment admissions. However, professional services, like legal, medical, or accounting, are typically exempt. Digital products, such as streaming services, downloaded movies, and e-books, are taxable in Nebraska as well.
If you’re unsure whether a specific product or service is taxable, the Nebraska Department of Revenue provides a full list of servicios gravables.
Is there sales tax on food in Nebraska?
In Nebraska, most unprepared food and food ingredients are exempt from sales tax. That means your typical grocery store purchases, like fruits, vegetables, meat, and bread, aren’t taxed.
However, prepared foods are taxable. This includes meals and beverages sold by restaurants, bars, and caterers, as well as food items purchased from vending machines. If food is heated, combined, or served for immediate consumption, you’ll likely need to charge sales tax.
One important distinction is the product labeling. If an item’s packaging includes a “Nutrition Facts” label, it’s generally exempt from tax. But if it has a “Supplement Facts” label, like energy drinks or dietary supplements, it’s considered taxable.
So, while groceries may be tax-free, a takeout dinner or energy drink will come with Nebraska sales tax added.
Whether you run a local grocery store in Omaha or a neighborhood restaurant in Lincoln, DAVO by Avalara takes the stress out of managing Nebraska sales tax. It automatically sets aside the exact sales tax you collect daily, then files and pays it to the Nebraska Department of Revenue on your behalf, accurately and on time, every time, garantizado,. That means you can spend less time worrying about tax obligations and more time serving your customers.
What is exempt from sales tax in Nebraska?
While Nebraska applies sales tax to most retail goods and services, there are several key exemptions that businesses and consumers should be aware of. Common exemptions include:
- Unprepared food and food ingredients: Groceries meant for home consumption are exempt from sales tax.
- Prescription drugs and certain medical equipment: Medications prescribed by a doctor, along with select durable medical equipment, are tax-exempt.
- Agricultural products and machinery: Farmers can purchase seeds, fertilizers, and qualifying farm machinery tax-free when used directly in agricultural production.
- Manufacturing equipment: Machinery and equipment used directly in the manufacturing process are exempt to encourage local production.
- Newspapers: Printed newspapers are exempt, though digital publications typically are not.
- Resale purchases: Items purchased for resale, rather than for end use, can be bought tax-free with a valid resale certificate.
Nebraska also offers exemptions for certain nonprofit organizations and government entities, though these exemptions apply only to qualifying purchases.
Since exemptions can vary by product type or business use, it’s always a good idea to review Nebraska’s Sales Tax Exemption Chart or check directly with the Nebraska Department of Revenue to confirm whether your sales qualify for exemption.
How to manage tax-exempt sales in Nebraska?
If your business makes tax-exempt sales in Nebraska, it’s essential to document those transactions properly. Whether the exemption applies because of the type of product sold or because the buyer qualifies for an exemption, retailers must always keep valid exemption documentation on file.
When making a tax-exempt sale, the buyer must provide a Nebraska Resale or Exempt Sale Certificate (Form 13) or another appropriate exemption form. This certificate should clearly state the reason for the exemption (such as resale, manufacturing, or agricultural production). As a retailer, you’re required to keep these certificates with your business records in case of an audit. If an exemption form is not provided, the sale is considered taxable.
Sales to Native Americans in Nebraska
Nebraska provides specific guidance for sales made to Native Americans living on native land. In general, no Nebraska sales tax is imposed on sales made to Native Americans living on a native land located within the state when both title and possession of the goods, or the taxable service, occur within those boundaries. However, sales made outside the boundaries are taxable, even if the purchaser is Native American.
Retailers located on a Nebraska reservation are required to register with the Nebraska Department of Revenue to collect and remit sales and use tax. When making exempt sales to Native Americans, the retailer must note the following details on the sales invoice:
- The name and address of the reservation
- The Nebraska tax exemption number (if available)
- The sales price and description of the item or service sold
If the purchaser doesn’t have a Nebraska Tax Exemption Card or number, the retailer must obtain a Nebraska Exemption Certificate for Native American Reservation Indians (Form 26) and retain it with their records. Maintaining accurate exemption documentation not only keeps your business compliant but also protects you in the event of a tax review.
How to apply for a Nebraska sales tax permit?
Before you can start collecting sales tax in Nebraska, your business needs to register for a Nebraska sales tax permit (also known as a sales tax license). This license gives you legal authorization to collect and remit sales and use tax to the Nebraska Department of Revenue (DOR).
The easiest and fastest way to register is online through the Nebraska Centurion System or directly through the Nebraska Department of Revenue’s website using the Nebraska Tax Application, Form 20. You’ll need to provide details about your business, including ownership type, business activities, and estimated sales.
If you prefer, you can also download and mail Form 20 to the Department of Revenue, though processing by mail can take longer. Once your application is processed, you’ll receive a Nebraska Sales Tax Permit with your assigned Nebraska ID number.
What to know before applying
- No fee: There is no charge for obtaining a Nebraska sales tax permit.
- Display your permit: Once received, your permit must be displayed prominently at your business location.
- Multiple locations: If your business has more than one location in Nebraska, you’ll need a separate permit for each site.
- Out-of-state sellers: If you’re an online retailer or remote seller with economic nexus in Nebraska (generally, $100,000 in gross sales or 200 separate transactions in the previous or current calendar year), you’re required to register and collect Nebraska sales tax as well.
Registering before you begin sales ensures your business stays compliant and avoids potential penalties for unlicensed sales activity. For more information, visit the Nebraska Department of Revenue’s website on how to register your business.
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Nebraska sales tax filing process
Once you’re registered with the Nebraska Department of Revenue and start collecting sales tax, you’ll need to file regular sales tax returns to report what you’ve collected and pay what you owe.
Most businesses are required to file electronically through the Nebraska Department of Revenue’s online filing system, NebFile for Business. Filing online is secure, quick, and helps prevent common errors.
If you prefer, you can still file a paper return unless you are required to file online. However, electronic filing is strongly encouraged and may be required depending on your filing frequency or business type. Even if you didn’t collect any sales tax during a filing period, you’re still required to file a “zero return”.
How to pay sales tax in Nebraska?
After filing your return, you’ll need to submit payment for any sales tax owed to the Nebraska Department of Revenue (DOR). The state offers several convenient ways to pay, depending on your business type and filing method:
- Electronic Funds Withdrawal (EFW)
If you file your return electronically, you can schedule your payment at the same time. Just enter your bank information and choose the date you want the funds withdrawn, and your payment will automatically process on that day. - Nebraska e-pay
Nebraska e-pay is the DOR’s online payment platform. It lets you securely enter your payment and bank details, then pick a withdrawal date, up to a year in advance. Once your payment is scheduled, you’ll get a confirmation email for your records. - Credit Card
If you prefer to pay by card, Nebraska accepts American Express, Discover, MasterCard, and Visa. Be aware that a small convenience fee applies that goes to the payment processor, not the state. - ACH Credit
Businesses that prefer to handle payments through their own banks can use the ACH Credit method. You (or your financial institution) send payment instructions directly to the Federal Reserve, authorizing your bank to credit the state’s account for the amount owed. - Nebraska Tele-pay
This phone-based system allows businesses to make payments by calling 800-232-0057. You’ll enter your payment details and select a debit date (up to a year ahead). At the end of your call, you’ll receive a confirmation number—keep it for your records. - Check or Money Order
You can also mail a check or money order payable to “Nebraska Department of Revenue.” Include your Nebraska ID number and tax period on the memo line. Keep in mind that checks may be processed electronically.
When is Nebraska sales tax due?
In Nebraska, sales tax returns are generally due on the 20th day of the month following the end of the reporting period.
- If you file monthly, your return for January is due February 20.
- If you file quarterly, your return for the first quarter (January–March) is due April 20.
- If you file annually, your return for the year is due January 20 of the following year.
If the due date falls on a weekend or state holiday, your return and payment are considered on time if filed by the next business day.
How often you file your Nebraska sales tax return depends on the amount of sales tax your business collects during the year. The Nebraska Department of Revenue (DOR) assigns your filing frequency when you register for a sales tax permit.
- Monthly: Required if you collect more than $500 in sales tax monthly.
- Quarterly: Applies if you collect less than $500 monthly.
- Annually: Applies if you collect less than $500 in sales tax per year.
Vendor discount for timely filing
Nebraska rewards businesses that file and pay their sales tax on time with a vendor discount. Retailers can claim a 3% discount on the first $5,000 of sales tax collected each month, up to a maximum of $150 per month (or $1,800 annually).
If you operate in multiple states, it’s worth checking whether other states where you do business offer similar incentives. Take a look at our state sales tax discount guide to see how Nebraska compares. With DAVO, this collection allowance is returned to the business in full, sometimes covering the full subscription cost to DAVO.
Nebraska sales tax penalty and interest
If you miss a sales tax filing or payment deadline in Nebraska, the Department of Revenue charges penalties and interest. The penalty is equal to $25 or 10% of the tax due, whichever is greater. In addition to the penalty, interest accrues on any unpaid tax from the day after the due date until the balance is paid in full.
How DAVO can help with Nebraska sales tax
Managing Nebraska sales tax can get tricky, especially when you’re juggling both state and local rates, different filing frequencies, and strict due dates. DAVO makes it simple. Our automated sales tax solution works directly with your POS system to set aside the exact tax you collect each day, then automatically files and pays your Nebraska sales tax. Whether you operate a coffee shop in Omaha, a restaurant in Lincoln, or a retail store in Scottsbluff, DAVO takes sales tax off your plate so you can focus on running your business, not keeping up with filing deadlines.
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Nebraska Department of Revenue Information:
402-471-5729
