Nebraska Rate and Other Taxability Changes

Beginning October 1, 2002, Nebraska will have several alterations to their sales and use tax system. The sales tax rate was originally going to be 5.5%, up from 5%, from October 1, 2002 through September 30, 2003, but the rate increase was later extended indefinitely. In addition to the raise in the rate, there will be amendments to the taxability of certain services. Beginning October 1, 2002, these changes include but are not limited to the following:
– The following services will now be subject to sales and use tax: building cleaning and maintenance, pest control, and security; motor vehicle washing, waxing, towing, and painting; computer software training; and installing and applying tangible personal property if the sale of the property is subject to tax.
– If services are provided to real estate that is located in Nebraska
– The situs for services is deemed to be in Nebraska for each of the following services:
– Services provided to real estate if the real estate is located in the state.
– Services provided to personal property if the personal property is located in the state and the service is rendered for use in the state
– Computer software training if the training is performed at a location within the state for a customer located within the state.
– If an individual provides a service without specialized equipment or supplies at any individual residence, it is considered an occasional sale exempt from tax.
– The following exemptions from sales and use tax are repealed: (1) subscriptions to magazines or journals that are issued at average intervals not exceeding once each month; (2) refractory materials, lime, synthetic slag, mill rolls, and guides for use in manufacturing steel or cement; and (3) separately stated charges for training customers in the use of computer software.
– Exemption for services to aircraft: A sales and use tax exemption is enacted for services rendered to an aircraft brought into Nebraska by an out-of-state resident or by a person who has a business location in another state when the aircraft is not to be registered or based in Nebraska and will not remain in the state more than 10 days after the service is completed. (L.B. 1085, Laws 2002; L.B. 759, Laws 2003.)

Posted on October 15, 2002