Nebraska to Enforce Remote Seller Sales Tax Collection

Effective Date: January 1, 2019 (Administrative announcement based on existing law) April 1, 2019 (Specific Legislative enactment)

Threshold: $100,000 or 200 or more separate transactions

Measurement Date: Previous or current calendar year

Includable Transactions: Retail sales; Marketplace sales included towards the threshold for individual sellers

When You Need to Register Once You Exceed the Threshold: The first day of the second calendar month after the threshold was exceeded

The Nebraska Department of Revenue issued a statement on July 27, 2018 in reaction to the U.S. Supreme Court’s decision in South Dakota v. Wayfair. The Department states that because the Supreme Court overruled the physical presence rule as a requirement for remote sellers to collect sales tax, certain remote sellers now have a sales tax collection responsibility on sales made to customers in Nebraska. The state did not enact specific legislation requiring remote sellers to collect but rather is relying on its current definition of retailer engaged in business. The definition is not overly broad and may not apply to all sellers.

Remote sellers who are defined as “engaged in business in Nebraska” under Neb. Rev. Stat. § 77-2701.13 are required to obtain a sales tax permit on or before January 1, 2019 and begin collecting and remitting sales tax on sales to Nebraska customers. Remote sellers who do not fall under this definition are not required to collect but can voluntarily register and collect for the benefit of Nebraska customers. Engaged in business in Nebraska means any of the following:

1. Maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary or agent, by whatever name called, an office, place of distribution, sales or sample room or place, warehouse, storage place, or other place of business in this state;
2. Having any representative, agent, salesperson, canvasser, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, or taking orders for any property;
3. Deriving rentals from a lease of property in this state by any retailer;
4. Soliciting retail sales of property from residents of this state on a continuous, regular, or systematic basis by means of advertising which is broadcast from or relayed from a transmitter within this state or distributed from a location within this state;
5. Soliciting orders from residents of this state for property by mail, if the solicitations are continuous, regular, seasonal, or systematic and if the retailer benefits from any banking, financing, debt collection, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities;
6. Being owned or controlled by the same interests which own or control any retailer engaged in business in the same or similar line of business in this state; or
7. Maintaining or having a franchisee or licensee operating under the retailer’s trade name in this state if the franchisee or licensee is required to collect the tax under the Nebraska Revenue Act of 1967.

The Department plans to administer a collection responsibility for remote sellers consistent with the Supreme Court’s Wayfair decision, which approved of South Dakota’s small seller exception for sellers with sales of $100,000 of less or fewer than 200 transactions. Enforcement of remote seller sales tax collection will be applied prospectively following the January 1, 2019 effective date. The Department may pursue legislation for remote sellers during the 2019 legislative session if the final outcome of the South Dakota v. Wayfair case requires it. Remote sellers can find additional information on the Department’s Wayfair Decision Frequently Asked Questions page. (News Release, Nebraska Department of Revenue, July 27, 2018 and Neb. Rev. Stat. § 77-2701.13).

UPDATE: In March of 2019, Nebraska enacted specific legislation (L.B. 284) for remote sellers and marketplace facilitators, effective April 1, 2019. Read our news item for the details: Nebraska Enacts Economic and Marketplace Nexus Legislation.