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Nebraska Offers Sales Tax Guide for Federal Employees


The federal government is exempt from sales taxes when it is "the direct purchaser of any taxable property or services." It's a nice perk for federal agencies, and one that is explained to United States government employees in an information guide published last month by the Nebraska Department of Revenue.

The general rule of thumb is this: the federal government is exempt from sales tax, federal employees are not.

Not Taxable
Federal employees may make tax-exempt purchases on behalf of the government if they use "centrally billed charge cards containing the appropriate prefix and sixth digit… ." So long as the charge card has the appropriate prefix and sixth digit, the documented charge card transaction may be used as the exemption certificate in place of the Nebraska Resale or Exempt Sale Certificate Form 13.

Don't even try to make tax-exempt purchases without the appropriate prefix and sixth digit.

Taxable
Charge card purchases that are "not centrally billed in total to the federal government are taxable… ." This is true even in cases where the federal employees are fully reimbursed for the expenses.

The Magic Numbers
Federal GSA SmartPay® 2 PURCHASE charge cards are exempt from Nebraska sales tax when they have the following prefixes (first four digits):

4486 - VISA
4644 - VISA
4716 - VISA
5565 - MasterCard
5568 - MasterCard

This is because they are centrally billed to a federal government agency.

Federal GSA SmartPay® 2 FLEET charge cards are exempt from Nebraska sales tax when they have the following prefixes (first four digits):

4486 - VISA
4644 - VISA
4716 - VISA
5565 - MasterCard & Wright Express
5568 - MasterCard
8699 - Voyager

This is because they are centrally billed to a federal government agency.

The following Federal GSA SmartPay® 2 TRAVEL charge cards are exempt from Nebraska sales tax when they have the following prefixes (first four digits) and sixth digits:

Prefix Sixth Digit
Type of Card
4468
0,6,7,8,9 VISA
4615
0,6,7,8,9 VISA
5565
0,6,7,8,9 MasterCard
5568
0,6,7,8,9 MasterCard

Once again, this is because these cards are centrally billed to a federal government agency.

Purchases charged to cards with the following prefixes and sixth digits are subject to Nebraska sales tax because they are "individually billed to a federal government employee or have an integrated billing system with a federal government agency." These cards are not centrally billed to a federal agency:

Prefix Sixth Digit
Type of Card
4468
1,2,3,4
VISA
4614
1,2,3,4
VISA
5565
1,2,3,4
MasterCard
5568
1,2,3,4
MasterCard

Purchases on all other charge cards are also subject to Nebraska sales tax, even when used by an employee of the federal government.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.