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The Nebraska Department of Revenue has ruled that contractors using accrual basis accounting and receiving more than one payment on a taxable project are responsible for collecting and remitting Nebraska sales tax on each payment. Contractors receiving only one payment may remit the tax when the sale is recorded. This change takes effect on all transactions after July 1, 2004. Sales made before July 1, 2004 with payments received after July 1st must be reported in the same taxable period that the sale was recorded. (NE Revenue Ruling 01-04-1, June 24,2004)

(08/05/2004)

The Nebraska Department of Revenue has ruled that contractors using accrual basis accounting and receiving more than one payment on a taxable project are responsible for collecting and remitting Nebraska sales tax on each payment. Contractors receiving only one payment may remit the tax when the sale is recorded. This change takes effect on all transactions after July 1, 2004. Sales made before July 1, 2004 with payments received after July 1st must be reported in the same taxable period that the sale was recorded. (NE Revenue Ruling 01-04-1, June 24,2004)

(08/05/2004)

Effective July 1, 2004, several law changes will directly affect the taxation of contractor labor charges. The changes include the following: (1) Contractors will be allowed to sell their labor tax-free to another contractor; (2) Option 2 and Option 3 contractors will collect sales tax on a statutorily set percentage of the total sales price for building materials and contractor labor; (3) Sales tax will be reported when the payments for services are received; and (4) projects involving a major renovation of a commercial building require prior approval from the Department of Revenue and payment of a $500 fee in order to be tax-free. Details are available at the NE DOR website at http://www.revenue.state.ne.us/contractFAQ.htm. (Letter to Contractors, Nebraska Department of Revenue, June 2004)

(07/28/2004)

The state of Nebraska has enacted a three-month amnesty program that will begin on August 1, 2004 and conclude on October 31, 2004. The amnesty program will cover all state taxes and allows delinquent taxpayers to pay any unreported taxes without penalties or interest. However, an application must be submitted by the taxpayer first and approved by the Tax Commissioner and the taxpayer should be aware that they will have no recourse in either an administrative or judicial capacity regarding the imposition of tax decided by the Department of Revenue. (Legislature of Nebraska, Legislative Bill 1019, effective August 1, 2004)

(05/15/2004)

In Nebraska, clarification is included in a new regulation. Any materials, equipment, and/or supplies used to supply pest control services are taxable. This includes contracted services as well. Pest control services are defined as those services intended to inspect for, detect, eliminate, neutralize, or control animals that infest buildings, plants, lawns, and any other property. Lawn service providers that use pest control chemicals are also liable for the collection of tax on their charges. However, if services are being performed to apply agricultural chemicals to land, crops, or animals in a commercial agriculture context, the services will not be taxable. (Reg 1-100 Pest Control Services, Sec. 77-2702.07, R.R.S. 2003, October 1, 2003)

(12/15/2003)

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