Nebraska’s Marketplace Facilitator Sales Tax Law, Explained
by August 11, 2021
Good news for marketplace sellers — the state of Nebraska now requires marketplaces to collect sales tax on behalf of sellers on online marketplaces like Amazon and Walmart.
This means that if you sell on a platform like Amazon, then Amazon will collect sales tax from your Nebraska buyers on your behalf, and remit it to the state.
But as usual, there are always a few wrinkles here when it comes to eCommerce sales tax.
This post will explain what online sellers need to know about the Nebraska marketplace facilitator law, and answer your frequently asked questions.
Overview of the Nebraska Marketplace Facilitator Law
Nebraska’s marketplace facilitator law states that marketplace facilitators in Nebraska collect Nebraska sales tax on behalf of third-party sellers.
Quick Facts about the Nebraska Marketplace Facilitator Law
- Effective date: April 1, 2019
- Threshold: This law requires that marketplace facilitators in Nebraska collect Nebraska sales tax on behalf of third-party sellers.
- Sellers that have a physical presence in Nebraska, or who are otherwise legally obligated to collect and remit Nebraska sales tax, are unaffected by the new law.
- State law information: Read the full text of the Nebraska Marketplace Facilitator Law
- Marketplaces that have adopted this law:
Frequently asked Questions about Marketplace Facilitator Laws
What exactly is a marketplace facilitator in Nebraska?
Nebraska law defines marketplace facilitators as an entity or person who operates a website or service where customers can buy goods or services from many different vendors.
Online sales platforms like Amazon and eBay are considered marketplace facilitators under Nebraska law.
Does this mean I can stop collecting Nebraska sales tax?
Remote sellers are only required to obtain a sales tax permit from DOR and collect Nebraska and local sales tax if they have more than $100,000 in gross Nebraska sales, including sales through an MMP, in the prior calendar year or current calendar year, or made 200 or more Nebraska sales transactions in the prior calendar year or current calendar year for delivery into the state. However, these sellers may still volunteer to register and collect the tax in this state as a benefit to their Nebraska customers.
Remote sellers that do not meet the thresholds are not required to collect, but may for the benefit of their Nebraska customers, obtain a sales tax permit and voluntarily collect the appropriate sales tax.
Marketplace facilitator laws only cover marketplaces. The state still requires that merchants collect sales tax from buyers via sales channels where the marketplace facilitator laws do not apply.
Does this mean I can cancel my Nebraska sales tax permit?
It depends.
Remote sellers are only required to obtain a sales tax permit from the department of revenue and collect Nebraska and local sales tax if they have more than $100,000 in gross Nebraska sales, including sales through a marketplace facilitator, in the prior calendar year or current calendar year, or made 200 or more Nebraska sales transactions in the prior calendar year or current calendar year for delivery into the state. However, these sellers may still volunteer to register and collect the tax in this state as a benefit to their Nebraska customers.
But first, a word of caution. We recommend checking directly with the state or a sales tax expert before cancelling your sales tax registration. This is because your business is now on the state of Nebraska’s books and potentially on their radar should they decide that you still have sales tax obligations in the state of Nebraska.
Final note: It’s important to assess your business before making a decision about cancelling sales tax permits. Are you in a growth stage? Do you plan to expand and think you may have Nebraska sales tax collection requirements in the future? Then you may want to hang on to your Nebraska sales tax permit rather than cancelling it and going through the administrative hassle of registering again in the future. This business decision is up to you.
Do I still need to file a Nebraska sales tax return?
If you are registered to collect sales tax in Nebraska (i.e. you have an active Nebraska sales tax permit) then the state still requires that you file sales tax returns.
Remote sellers are only required to collect Nebraska and local sales tax if they have more than $100,000 in gross Nebraska sales, including sales through a marketplace facilitator, in the prior calendar year or current calendar year, or made 200 or more Nebraska sales transactions in the prior calendar year or current calendar year for delivery into the state. However, these sellers may still volunteer to register and collect the tax in this state as a benefit to their Nebraska customers.
If you no longer have any sales tax to remit to the state of Nebraska, we recommend checking directly with the state to determine if you can cancel your sales tax registration.
Be cautious here. If you are registered for a sales tax permit and do not file, the state can assess penalties even though you don’t have any sales tax to remit! We have, unfortunately, talked to too many sellers who have found this out the hard way when a tax penalty bill arrives.
What do I do with any Nebraska sales tax I have already collected?
If you have already collected Nebraska sales tax from buyers, it is vital that you remit that amount to the state. The only way to get in serious criminal trouble in sales tax is to collect sales tax from buyers on the state’s behalf but keep it in your own pocket.
Does TaxJar handle this for me?
Yes.
TaxJar AutoFile Handles Nebraska Sales Tax Automatically
TaxJar AutoFile automatically compiles your sales tax data the way the state of Nebraska wants it filed. For example, many states, Nebraska included, want sellers to break down their sales tax collected interstate (sales originating in Nebraska sent to another state) and intrastate (sales made from Nebraska to Nebraska.)
If a marketplace has collected sales tax on your behalf, TaxJar reports that directly to the state so that the state is aware you have met your sales tax obligations.
If you currently AutoFile your Nebraska sales tax returns, you don’t need to do a thing. It’s handled!
TaxJar Reports Give You all the Info You need to File Manually
If you prefer to file manually, your TaxJar Reports also reflect what the Nebraska Department of Revenue wants to see on your tax return.
Also don’t worry that you will double pay. TaxJar accounts for sales tax collected on your behalf, and only shows you the amount you owe to the state out of your pocket.
Further reading on Nebraska sales tax and marketplace facilitator laws:
- TaxJar’s Marketplace Facilitator FAQ
- State by State: Marketplace Facilitator Laws Explained
- Nebraska Sales Tax Guide for Businesses
