Nebraska Residence Return

Nebraska Use Tax (line 38 of Form N1040)


Use tax is due on all taxable purchases when Nebraska and any applicable local sales tax are not paid. You may owe use tax if you have not paid the Nebraska sales tax or any applicable local sales tax on purchases delivered into Nebraska from out-of-state, mail order, or Internet sellers. Nebraska law requires that if sales tax is not collected by the seller on any taxable sale, the purchaser must remit the tax directly to the state.


Tax payers identify and self report total taxable 2013 purchases where Nebraska sales tax was not collected by the seller on Form N1040, line 38. Multiply this amount by 5.5% (.055). If local tax applies, enter the tax payer’s local code from the local rate schedule (check page 23 of the Nebraska instruction booklet) and multiply the total taxable purchases by the local rate (.005, .010, or .015). Add the state and local tax amounts together and enter on line 37.


Example : If you purchase a computer from a seller in South Dakota over the Internet for $1,470 plus $30 shipping and handling charges. Both charges are taxable. The computer is shipped to you in Scottsbluff, Nebraska and the seller did not charge or collect sales or use tax. Your total state use tax is $83 ($1,500 X 5.5% = $83) and the local use tax is $23 ($1,500 X 1.5% = $23). The total use tax owed is $106 ($83 + $23 = $106). When calculating state and local tax, round your results, and then add together to arrive at your line 37 entry. Round any amount from 50 cents to 99 cents to the next higher dollar. Round any amount less than 50 cents to the next lower dollar.


Subpages (1): Nebraska Q/A