Nebraska: The Distinction between Lessors and Common Carriers
- Sales Tax News
- Feb 19, 2014 | Gail Cole
Why is it important to determine if you’re a lessor or a common/contract carrier? Sales tax, of course!
According to the Nebraska Department of Revenue:
- A lessor must obtain a sales tax permit and collect Nebraska sales tax from their lessees. Lessors must also complete a Nebraska and Local Sales and Use Tax Return and file it by the due date, even if the amount due is zero.
- A common / contract carrier must obtain a Nebraska Common/Contract Carrier Exemption Certificate, which must be renewed every five years.
You’re considered to be a lessor if:
- Control and use of the vehicle is determined by the lessee; and
- The vehicle is leased 100% of the time.
Lessors are permitted to purchase “the vehicle and any repair or replacement parts for the leased vehicle tax-exempt.” A Nebraska Resale and Exempt Sale Certificate must be provided to the seller at the time of purchase in order for the exemption to be valid.
You’re considered to be a common/contract carrier if:
- The vehicle “is used more than 50% of the time to transport the goods of others, or passengers, for hire.”
Common/contract carriers may purchase without sales tax the vehicle and repair or replacement parts and accessories. In order for the exemption to be valid, a Nebraska Resale and Exempt Sale Certificate must be provided to the seller.
Additional information is available on the department’s website.
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