Nebraska Sales Tax Rate Rules Penalties Filing Steps

As a business owner in Nebraska, staying on top of sales tax regulations is not just a legal obligation—it’s a key component of your financial health. From understanding the latest tax rates to filing deadlines, every detail counts to avoid penalties. Whether you are a retailer, eCommerce seller, or service provider, staying informed ensures accurate tax collection and reporting.

This guide covers:

• Nebraska sales tax rate in 2025 and how it applies to your business.
• Sales tax exemptions and who qualifies.
• Economic nexus laws and their impact on out-of-state sellers.
• How do you file and pay Nebraska sales tax correctly?
• Penalties for non-compliance and how to avoid them.

Let’s begin with understanding what Nebraska Sales Tax Rate is in 2025.

What is the Sales Tax Rate in Nebraska?

As of 2025, the state-wide sales tax rate is  5.5%. However, local jurisdictions can impose additional taxes, leading to variations in the total sales tax rate depending on the specific location of the sale.

For example:

• Omaha: The total sales tax rate is 7.0% (5.5% state + 1.5% local).
• Lincoln: The total sales tax rate is also 7.0% (5.5% state + 1.5% local).
• Grand Island: The total sales tax rate is 6.5% (5.5% state + 1.0% local).

Understanding the nuances of Nebraska’s sales tax rates will help you ensure compliance. To simplify this process, consider using a Nebraska sales tax calculator, which can assist you in determining the exact amount owed based on your location and transactions.

Nebraska Sales & Use Tax Overview

Nebraska imposes both sales tax and use tax on the sale, lease, or rental of tangible personal property and certain services. These taxes ensure that businesses contribute to state revenue, funding public services like education, transportation, and infrastructure.

If you sell taxable goods or services in Nebraska, you are responsible for collecting and remitting Nebraska state sales tax to the Nebraska Department of Revenue. However, if a purchase is made from an out-of-state seller who does not collect Nebraska sales tax, the buyer must pay use tax directly to the state.

Key Features of Nebraska Sales Tax

• Statewide Sales Tax Rate: The Nebraska sales tax rate is 5.5%, but local jurisdictions may add up to 2%, resulting in a combined rate of up to 7.5%.
• Use Tax: If you purchase taxable goods from an out-of-state seller who does not collect Nebraska sales tax, you are responsible for paying use tax at the same rate as sales tax.
• Sales Tax Permit: Businesses must obtain a Nebraska Sales Tax Permit before collecting customer tax. Registration is done through the Nebraska Department of Revenue.

Taxable and Exempt Items

Nebraska sales tax applies to most tangible personal property and some services, but specific categories are exempt.

Common taxable items include:

• Retail sales of physical products (eg., clothing, electronics)
• Digital goods (eg.,e-books, music downloads)
• Prepared food, restaurant meals, and beverages.
• Certain services including installation, repair, and maintenance services.

Some products and services qualify for exemptions from Nebraska state sales tax:

• Groceries and unprepared food items.
• Prescription and over-the-counter medications.
• Medical devices and durable medical equipment.
• Purchases by nonprofit organizations with an exemption certificate.
• Manufacturing machinery and raw materials used in production.

For a complete list of taxable and exempt goods, visit the Nebraska Department of Revenue.

To simplify tax collection and compliance, Commenda offers automated tax solutions that accurately calculate Nebraska sales tax rates and handle tax reporting. Learn more here.

When Do Businesses Need to Collect Sales Tax in Nebraska?

Businesses must collect Nebraska sales tax when they have established a nexus in the state. Nexus refers to a significant connection that a company has with Nebraska, which can be established in two ways: physical nexus and economic nexus.

• Physical Nexus in Nebraska: Physical nexus means your business has a tangible presence in Nebraska. If your company operates from a physical location or has assets in the state, you must collect and remit Nebraska state sales tax on taxable sales.

• Economic Nexus in Nebraska: Businesses that sell more than $100,000 worth of goods or services in Nebraska annually or complete 200 or more separate transactions with Nebraska customers must register for a Nebraska Sales Tax Permit and begin collecting tax. This rule applies mainly to remote sellers, online businesses and out-of-state retailers.

For information about Nebraska economic nexus, click here.

Failure to Collect Nebraska Sales Tax

Failing to collect and remit Nebraska sales tax can lead to penalties, interest charges, and legal consequences. The Nebraska Department of Revenue actively enforces compliance, and businesses that fail to meet their tax obligations may face audits and financial penalties.

Failure to File

If a business fails to file a Nebraska sales tax return or remit tax on time:

• A 10% penalty of the unpaid tax or $25 (whichever is greater) is applied.
• This applies to both in-state businesses and out-of-state sellers with the Nebraska Economic Nexus.

Commenda’s expert advice: Track your filing deadlines to avoid unnecessary penalties.

False or Fraudulent Return

If a business knowingly files false or fraudulent returns to avoid paying Nebraska state sales tax:

• A 25% penalty of the understated tax or $50 (whichever is greater) is imposed.
• Fraudulent tax evasion may lead to additional legal action.
• Businesses should maintain accurate sales records and correctly classify taxable and exempt sales.

Interest on Unpaid Tax

Unpaid taxes accrue interest from the original due date until the date of payment. The interest rate is determined biennially; for the period from January 1, 2025, through December 31, 2026, the rate is 8% per year.

Minimum Penalty and Combined Limits

Businesses may face multiple penalties, leading to higher financial liabilities:

• Failure to File Penalty: 10% of unpaid tax or $25 (whichever is greater).
• Fraud Penalty: 25% of understated tax or $50 (whichever is greater).
• Combined Penalties: Multiple penalties can apply, increasing the total owed.

Failure to Pay by Electronic Funds Transfer (EFT)

Certain businesses must remit Nebraska sales tax payments electronically:

• A $100 penalty per occurrence is applied if required and not paid via EFT.
• Companies should check if they qualify for mandatory EFT payments.

Penalty for Uncollectible Funds

If a tax payment fails due to insufficient funds:

• A $30 penalty or 5% of the payment amount (whichever is greater) applies.
• This includes bounced checks and failed electronic payments.

Nebraska Sales Tax for Out-of-State and Amazon FBA Program Sellers

Businesses selling in Nebraska through Fulfillment by Amazon (FBA) or other eCommerce platforms must comply with Nebraska sales tax regulations. If your inventory is stored in Nebraska or your sales volume meets Nebraska Economic Nexus thresholds, you may be required to collect and remit Nebraska state sales tax.

Key Considerations for Out-of-State Sellers

• Nexus Creation: Storing inventory in Amazon’s fulfillment centers in Nebraska establishes a physical nexus, requiring sellers to collect Nebraska sales tax on sales made to customers in the state.
• Sales Tax Collection: Amazon automatically calculates and collects sales tax for sellers in states with marketplace facilitator laws. Sellers must ensure they have the necessary sales tax permits from Nebraska.
• Reporting Requirements: Sellers using FBA must generate reports from Amazon Seller Central to track collected sales tax. The Sales Tax Calculation Report is crucial for accurate reporting and remittance.
• Tax Exemptions: Sellers should be aware of applicable sales tax exemptions in Nebraska that may apply to their products, helping manage compliance effectively.

‍read: Which States Do Not Accept Out-of-State Resale Certificates

Registering for a Nebraska Seller’s Permit

Registering for a Nebraska sales tax permit is a straightforward process that ensures your business complies with state regulations for collecting and remitting sales tax. Here’s how to proceed:

1. Determine Your Need for a Sales Tax Permit:

If your business engages in retail sales of taxable goods or services in Nebraska, you must obtain a sales tax permit. This includes businesses with a physical presence in the state and those meeting economic nexus thresholds.

2. Gather Necessary Information:

• Federal Employer Identification Number (FEIN): Obtain this from the IRS if you haven’t already.
• Business Details: Prepare information about your business structure, ownership, and physical locations.
• Owner Information: Collect Social Security numbers, names, addresses, and titles of each owner, partner, member, or corporate officer.

3. Register Your Business:

Online Registration:

• Visit the Nebraska Department of Revenue’s online registration portal.
• Create a user account with a valid email address.
• Complete the online application by providing the required information.

Paper Registration:

• If you prefer or if your business already has a Nebraska ID number and needs to add sales tax collection, complete the Nebraska Tax Application, Form 20.
• Mail or fax the completed form to the Nebraska Department of Revenue:
  • Mail: PO Box 98903, Lincoln, NE 68509-8903
  • Fax: 402-471-5927

4. Await Processing:

• You may receive your Nebraska ID number immediately upon completion of online applications. The Department of Revenue will contact you within five business days if additional information is needed.
• For paper applications, allow approximately two weeks for processing.

5. Display Your Sales Tax Permit:

Once approved, you’ll receive your Nebraska Sales Tax Permit. This permit must be displayed at each retail location. If you operate multiple locations, a separate permit is required for each.

By following these steps, your business will be authorized to collect and remit sales tax in Nebraska, ensuring compliance with state tax laws.

Collecting Sales Tax in Nebraska

Correctly collecting sales tax in Nebraska is essential for compliance and effective business operations. This section outlines the necessary steps for businesses to ensure accurate sales tax collection, from providing detailed receipts to managing tax-exempt customers.

1. Determine the Sales Tax Rate: Nebraska’s state sales tax is 5.5%, with local rates potentially increasing this total (e.g., 7.0% in Omaha).
2. Provide Detailed Receipts: Always issue receipts that show the total price, sales tax amount, and applicable tax rate.
3. Handle Tax-Exempt Customers: Obtain and file valid exemption certificates for tax-exempt customers.
4. Maintain Accurate Records: Keep detailed records of transactions and sales tax collected for reporting purposes.
5. Remit Sales Tax: Submit collected sales tax to the Nebraska Department of Revenue by your assigned due date.
6. Use a Sales Tax Calculator: Utilize a Nebraska sales tax calculator to ensure accurate tax calculations based on varying rates.

By following these steps, businesses can effectively collect sales tax in Nebraska. For more support with sales tax compliance, Commenda offers valuable resources tailored for multi-state operations.

Tax Exempt Customers

Specific customers and transactions in Nebraska are exempt from sales tax. To ensure compliance, businesses must verify tax-exempt status and maintain proper documentation, such as Form 13. Below are the primary tax-exempt customers:

• Resellers
• Nonprofit Organizations
• Government Agencies
• Agricultural Machinery & Equipment
• Manufacturers

Businesses must collect and store valid exemption certificates to avoid penalties. More details are available here.

Filing Sales Tax Returns in Nebraska

Filing sales tax returns in Nebraska is crucial for businesses to ensure compliance with state regulations. Below are the filing frequency, steps, and payment methods for Nebraska sales tax.

Filing Steps

Filing Nebraska sales tax return involves the following process:

1. Log in to the Nebraska Department of Revenue Portal – Access the online filing system using your Nebraska ID Number and PIN.
2. Select Sales and Use Tax – Choose the correct tax program and reporting period.
3. Enter Sales Data – Report gross sales, taxable sales, and exemptions.
4. Verify and Submit – Review your details for accuracy and submit the return electronically.
5. Make Payment – Pay the tax due via EFT, credit card, or e-check.

For more details, visit the Nebraska Sales and Use Tax Online Filing page. By following these steps, businesses can accurately file their sales tax returns in Nebraska. For accurate calculations of your sales tax obligations, consider using a Nebraska sales tax calculator.

How to Pay Your Nebraska Sales Tax

After filing your Nebraska sales tax return, you must ensure timely payment to avoid penalties. Nebraska offers multiple payment methods for businesses to remit their Nebraska sales tax:

• Electronic Funds Transfer (EFT): Required for businesses with high tax liabilities, allowing direct bank transfers.
• Nebraska E-Pay System: Businesses can pay online through the Nebraska Department of Revenue’s portal.
• Credit or Debit Card: Payments can be made electronically, though processing fees may apply.
• Check or Money Order: Businesses can mail payments to the Nebraska Department of Revenue, ensuring the tax return stub is included for proper processing.

To avoid penalties and interest, businesses should ensure timely payments and use automation tools like Commenda to streamline tax collection and remittance.

Nebraska Sales Tax Compliance Checklist

This checklist provides essential steps for ensuring compliance with Nebraska’s sales tax regulations, helping businesses avoid penalties and maintaining accurate records.

1. Determine Nexus: Identify if your business has a physical nexus or economic nexus in Nebraska.
2. Register for a Sales Tax Permit: Apply through the Nebraska Department of Revenue before collecting tax.
3. Collect the Correct Tax Rate: Use a Nebraska sales tax calculator to apply accurate state and local tax rates.
4. File and Pay on Time: Submit Nebraska sales tax returns by the 20th of the month following the reporting period to avoid penalties.
5. Maintain Proper Records: For audit compliance, keep exemption certificates, sales records, and tax filings.

How Should I Prepare for Nebraska Sales Tax Audits and Appeals?

Preparing for a sales tax audit in Nebraska involves understanding what auditors look for, maintaining thorough documentation, and knowing the appeals process. Here are key steps to ensure readiness:

1. Understand Audit Triggers: Be aware that high transaction volumes, discrepancies in reported sales, or frequent changes in tax rates can trigger an audit. Regularly review your sales records to identify any potential issues.
2. Maintain Comprehensive Documentation: Keep detailed records of all sales invoices, exemption certificates, and tax returns. This documentation will be crucial during the audit process as it demonstrates compliance with Nebraska sales tax laws.
3. Conduct Internal Reviews: Regularly perform internal audits to identify discrepancies or errors in your sales tax calculations and reporting. This proactive approach can help mitigate issues before an official audit occurs.
4. Prepare for the Audit Interview: When contacted by an auditor, be ready to discuss your business operations and accounting practices. Familiarize yourself with your sales tax processes and documentation to provide clear explanations.

Nebraska Sales Tax Rates by City

In Nebraska, the state sales tax rate is 5.5%. Local jurisdictions may impose additional sales taxes, varying total rates across different cities. As of January 1, 2025, here are the sales tax rates for ten selected cities in Nebraska:

Using Sales Tax Automation Tools

Managing Nebraska sales tax manually can be time-consuming and prone to errors, especially when dealing with varying Nebraska sales tax rates across cities and counties. Businesses must track economic nexus thresholds, apply the correct Nebraska state sales tax percentage, and ensure timely filing to avoid penalties.

How Commenda Simplifies Nebraska Sales Tax Compliance

Commenda is an advanced sales tax automation tool designed to help businesses:

• Accurately Calculate Nebraska Sales Tax – Automatically applies the correct Nebraska sales tax rate, including local tax variations.
• Monitor Economic Nexus – Tracks your Nebraska sales tax obligations to notify you when you need to register.
• Automate Tax Filings and Payments – Streamlines reporting and ensures on-time tax remittance to the Nebraska Department of Revenue.
• Manage Exemptions and Records – Stores exemption certificates and maintains accurate audit transaction records.

By integrating Commenda into your business operations, you can eliminate manual tax calculations, reduce filing errors, and comply with Nebraska sales tax laws. Learn more here and simplify your tax management today.

Next, let’s explore frequently asked questions about Nebraska sales tax compliance

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FAQs

What triggers the sales tax nexus in Nebraska?

Are there special taxes, excise charges, or local add-ons I need to consider?

Do I need a Nebraska seller’s permit if I’m only a wholesaler?

Do I need a Nebraska seller’s permit if I only sell temporarily in the state?

What is the penalty for filing and/or paying Nebraska sales tax late?

Is software-as-a-service (SaaS) taxable in Nebraska?