The 2016 Nebraska State Sales Tax
What is the 2016 Nebraska Sales Tax Rate?
The Nebraska state sales tax rate is 5.5%, and the average NE sales tax after local surtaxes is 6.8%.
- Groceries are exempt from the Nebraska sales tax
- Counties and cities can charge an additional local sales tax of up to 2%, for a maximum possible combined sales tax of 7.5%
- Nebraska has 149 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
- Nebraska has a lower state sales tax than 50% of states
Counties and cities in Nebraska are allowed to charge an additional local sales tax on top of the state sales tax. The state capitol, Omaha, has a local tax of 2.5% on prepared food and drinks. Groceries and raw foods are exempt from all forms of sales tax statewide.
If you are a Nebraska business owner, you can learn more about how to collect and file your Nebraska sales tax return at the 2016 Nebraska Sales Tax Handbook .
Nebraska Sales Tax Exemptions
Nebraska doesn't collect sales tax on purchases of most groceries. Prepared Food is subject to special sales tax rates under Nebraska law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Unlike many states, Nebraska treats both candy and soda as groceries for sales tax purposes. Other items including gasoline, alcohol, and cigarettes are subject to various Nebraska excise taxes in addition to the sales tax.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The NE sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Nebraska's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$9.50 sales tax
$0.00 sales tax
$5.50 sales tax
$5.50 sales tax
Nebraska Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the Nebraska sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Nebraska Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a Nebraska state sales tax exemption certificate, which can be obtained from the Nebraska Department of Revenue . On making an exempt purchase, Exemption Certificate holders may submit a completed Nebraska Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Nebraska sales tax code) can be downloaded from the Nebraska Department of Revenue here .
Nebraska Sales Tax Calculator
Whenever you make a purchase at a licensed Nebraska retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Nebraska sales tax calculator.
Nebraska Use Tax
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If you buy goods and are not charged the Nebraska Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 5.5% sales tax (less any foreign sales tax paid) for these items yourself as the Nebraska Use Tax.
Your are expected to voluntarily list your liable purchases on a Nebraska Use Tax Return, which should be attached with payment to your Nebraska Income Tax Return. Historically, compliance rates with with the Nebraska Use Tax have been low.
Nebraska Local Sales Taxes
Nebraska does not allow local jurisdictions like cities or counties to collect a local sales tax. The Nebraska state sales tax of 5.5% is applicable statewide. You can view the sales tax rates for various cities in Nebraska here.
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