Nebraska Sales Tax Nexus
Nebraska Risk Profile
The Trigger: $100,000 in annual gross sales.
(Note: Nebraska officially repealed the “200 transactions” rule on January 1, 2024. It is now a revenue-only state.)
Physical Nexus: Standard triggers apply, including offices and employees. Nebraska is a major transportation hub; having inventory in a local third-party warehouse (including FBA) establishes immediate physical nexus regardless of sales volume.
Effective Date: April 1, 2019.
Look-back Exposure: Generally 3 years. Nebraska is a member of the Streamlined Sales Tax (SST) agreement and uses shared data to identify unregistered remote sellers who exceed the revenue threshold.
Danger Level: MODERATE (The SaaS & Software Risk)
Nebraska is very specific about the taxability of software. Both “canned” software downloads and Software-as-a-Service (SaaS) are generally taxable. Tech companies often overlook Nebraska because it’s a smaller market, but the $100,000 threshold applies to these services, creating cumulative back-tax risk.
The Trap: Local Tax Compliance
Nebraska has a state rate of 5.5%, but local taxes can add up to 2% more. Since Nebraska is a destination-based state, you must accurately collect the local tax for every city in which you have a delivery. Failure to track these local variations is a primary cause of audit assessments.
Nebraska State Tax Nexus Summary
Nebraska follows a revenue-based economic nexus standard and is a member of the Streamlined Sales Tax (SST) agreement. Recent legislative updates have removed the transaction-based thresholds, simplifying compliance for out-of-state sellers.
Sales Tax Nexus
Remote sellers and marketplace facilitators establish nexus in Nebraska if they meet the following threshold in the current or previous calendar year:
- Economic Threshold: $100,000 or more in gross retail sales delivered into Nebraska.
- Update: As of January 1, 2024, Nebraska no longer utilizes a transaction count (formerly 200 sales) to determine nexus.
Physical nexus is triggered immediately by having a physical presence in the state, such as an office, remote employees, or inventory stored in a Nebraska warehouse or fulfillment center.
Corporate Income Tax Nexus
Nebraska imposes a corporate income tax on businesses doing business in the state. While there is no fixed dollar threshold for income tax nexus, the state asserts a filing requirement for businesses with significant economic activity that exceeds the protections of Public Law 86-272.
Taxability of Groceries and SaaS
Nebraska generally exempts unprepared groceries from sales tax. However, the state is aggressive in taxing digital products, including streaming services and Software-as-a-Service (SaaS), which are treated as taxable software services.
Conclusion
With a simplified $100,000 threshold and participation in the SST agreement, Nebraska is relatively straightforward but diligent in enforcement. We recommend a review of your software and digital service sales to ensure they are being taxed at the correct local rates.
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