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The Nebraska Department of Revenue has issued an information guide on the taxability of laundry and dry cleaning services. Alteration and repair services are taxable; thus, laundry and dry cleaning service providers who offer these services must hold a Nebraska sales tax permit. The purchase of equipment, products, and supplies used to provide laundry and dry cleaning services are taxable, as well as the retail sales of products, such as dryer sheets and soap. The correct tax rate on all taxable transactions is determined upon where the items are delivered. Cleaning, storage, pressing, and restoration services are not subject to Nebraska sales tax (Information Guide 6-480-2009, Nebraska Sales and Use Tax Guide for Laundries and Dry Cleaners, Nebraska Department of Revenue, March 16, 2009).


The Nebraska Department of Revenue has amended three sales and use tax regulations dealing with contractors. Effective February 22, 2009, non-resident contractors only need to register contracts with the Department if the total contract price or compensation is greater than $10,000. Additionally, no bonds or other securities need to be executed and filed for contracts of $10,000 or less. Finally, contractors who have chosen Option 1 as their method of determining tax due on building materials are only required to collect tax from their customers on the separately stated selling price of the building materials. (Sales and Use Tax Regulations 8-003, 8-004, and 9-009, Nebraska Department of Revenue, effective February 22, 2009)


Effective October 1, 2008, digital works delivered electronically, such as digital audio, digital audio-visual, digital books, and digital codes, are subject to Nebraska sales and use tax if they are taxable when delivered in a tangible form. Sales are taxable when the customer acquires 1) a permanent right of use 2) a right of use that expires after a condition is met or 3) a right of use that is continuous upon regular payments. Obtaining a digital code provides that customer with a right to purchase digital products is taxable even if the user does not use it in order to receive electronic product immediately. (Revenue Ruling 01-08-03, Nebraska Department of Revenue, August 25, 2008)


Effective October 1, 2008, Nebraska will require previously exempt entities, such as religious organizations, private educational institutions, healthcare facilities, and licensed child care and placement agencies, to have nonprofit status in order to qualify for the sales and use tax exemption. In addition, the list of exempt healthcare facilities has been expanded to include nonprofit assisted-living facilities. (L.B. 575, Laws 2008, operative October 1, 2008).


The Nebraska State Tax Commissioner has ruled on a taxpayer’s question regarding the taxability of services associated with the installation or repair of telecommunications structures such as telephone, telegraph, mobile telephone or community television antennas. The Commissioner found that the contract amount charged to perform these services was taxable as construction services if the property is on the telecommunications service provider’s side of the “demarcation point.” Under Nebraska law, the demarcation point is the point where the equipment that is owned by the telecommunications service provider is connected to the equipment dedicated to their customer’s use. (Nebraska Department of Revenue, Revenue Ruling 1-07-02, December 14, 2007)



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