Nebraska Sales Tax Guide

Chapter 3: Getting registered to collect Nebraska sales tax

Overview

The first step toward proper management of Nebraska sales tax involves getting registered with the Nebraska Department of Revenue. We get a lot of questions regarding this and recognize it may be the most difficult hurdle for small businesses to overcome. Registering to collect sales tax in Nebraska means you've acknowledged your legal responsibility to collect and consequently file and remit sales tax to the state.

When do I need to register to collect sales tax in Nebraska?

There are two ways to think about this question. The first involves a topic called "nexus". Nexus, in the tax world refers to a company's connection to a state. While this connection is typically that of a physical nature (warehouse in the Nebraska, inventory in Nebraska, etc.), nexus is not limited to a physical presence. There are many nexus triggers we won't delve into here and, more importantly, nexus is often determined by a combination of events rather than a single event.

If it is determined you have nexus in Nebraska, the Nebraska Department of Revenue has the legal right to require you to collect, file, and pay sales tax.

If you've determined you have nexus in Nebraska, the second question involves a topic we call "materiality". In short, you'll want to ask yourself whether the amount of sales tax you are required to collect and remit to the Nebraska Department of Revenue is enough to put you at an unacceptable level of penalty and interest risk. As everyone's level of risk tolerance is different, this is a question that can only be answered by you, the business owner.

Prior to selling taxable goods or offering taxable services in Nebraska, a business that has established nexus within the state is required to register for an Sales Tax Permit.

What triggers nexus in Nebraska?

Nexus is a complex topic that, depending on your situation, may require the in-depth knowledge of a qualified tax professional. That being said, there are a few common business events and situations that are known to trigger nexus in Nebraska. The most common include the following:

  • Opening an office in Nebraska
  • Storing inventory in a warehouse in Nebraska
  • Having remote employees located in Nebraska
How do I register to collect sales tax in Nebraska

Businesses may register for an Nebraska Sales Tax Permit online by visiting the Nebraska Department of Revenue and following the instructions provided.

It is also possible to get registered for a Sales Tax Permit by completing and mailing in a Nebraska Tax Application (20), but this approach is not recommended. Form based registration is being phased out in favor of online registration. It’s fast, free, and more reliable than mailing in a completed paper form.

What information is required to register for a Nebraska Sales Tax Permit ?

When applying for a Nebraska Sales Tax Permit, there are a number of pieces of information that may be required. These include, but are likely not limited to:

  • Business name
  • Business entity type
  • Description of business activities
  • Date business activities began or will begin
  • Business address and mailing address
  • Business contact information
  • The North American Industry Classification System (NAICS) code that best matches your business
  • Federal Employer Identification Number (FEIN)
  • Your name, Social Security Number (SSN), driver license number, personal address, and personal contact information of owner/sole proprietor
  • List of business officers, partners, managing members, and/or trustees
  • Employment information (date of hire, number of employees, payroll amounts, payroll agent’s PTIN, if applicable)
How much does it cost to register for a Nebraska Sales Tax Permit ?

The cost to register for a Nebraska Sales Tax Permit is currently $0.

Do I need a Federal EIN in order to register in Nebraska?

The Nebraska Department of Revenue requires businesses requesting a new Sales Tax Permit to supply a valid Federal EIN number during the initial registration process. You can apply for an EIN number online by visiting the IRS website.

Which Nebraska governement agencies do I need to register with in order to get a new Sales Tax Permit?

We recommend you contact the Nebraska Department of Revenue to verify which government agencies you will be required to register with. Potential agencies include the following:

  • Nebraska Department of Revenue
  • Nebraska State Employment Agency
  • Nebraska State Department of Labor
  • Nebraska Local Tax Jurisdictions
Do I need to register for a new Sales Tax Permit if I acquired a registered business?

Yes! Nebraska Sales Tax Permit registration is unique to the state of a business. The Nebraska Department of Revenue requires all registered businesses to have current business owner name and contact information on file.