Free guide for contractors
Do contractors charge sales tax in Nebraska?
General information, not tax advice. Tax rules change and depend on the details of each job. Confirm how they apply to your business with your accountant or the state's revenue department before relying on them.
NE Nebraska
Depends on the jobIt depends on which option the contractor elected when registering. Option 1, the default, collects tax on materials.
Nebraska contractors elect one of three options, and the option applies to all of their construction contracts. A contractor may not operate under more than one at a time. A contractor that makes no election is treated as a retailer under Option 1.
Under Option 1, the contractor collects sales tax on the total amount charged for building materials it annexes to real estate. Separately stated labor is not normally taxed, but one combined price for materials and labor is taxed in full.
Under Options 2 and 3, the contractor normally collects no sales tax on repairs or improvements to real estate. Both still collect tax on property that is not annexed, on live plants and on taxable services.
It turns on: which option the contractor elected (1, 2 or 3); under Option 1, whether materials and labor are priced separately; whether the item is annexed to real estate.
Watch out for
- Under every option, live plants and the labor to plant them are taxed, on the whole charge unless annexing labor is stated separately (REG-1-017.05G, 017.06G).
- Building cleaning, pest control and security services are taxed on the total under every option (REG-1-017.05D(5)).
- Property that is not annexed, such as draperies and window air conditioners, is taxed on the total, installation included, under every option (REG-1-017.05D(2)).
“The option selected applies to all construction contracts.”Neb. Admin. Code REG-1-017.03A