When a Nebraska business purchases inventory to resell, it can do so without paying state sales tax. To be eligible for the sales tax exemption, the retailer must provide a Nebraska Resale Certificate to their vendor.
Learn more about how the Nebraska Resale Certificate works, how to get one, and more.
What is a Nebraska Resale Certificate?
When retailers purchase products to resell, they often don’t pay sales tax to the supplier. The state sales tax will still be paid, but instead of the retailer paying sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.
For example, when a bicycle shop in Nebraska orders a new batch of bicycles to sell in their store, by having a resale certificate, the shop owner won’t pay sales tax on this transaction. When a customer decides to buy one of these bicycles from the shop, the retailer will charge sales tax to the customer based on the full price of the bicycle. This extra charge is the sales tax that Nebraska imposes on retail transactions. Then, typically at the end of each month, the bicycle shop sends the accumulated sales tax to the state’s tax authority.
Note that the sales tax exemption is only intended for inventory that will be resold and is not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.
How to fill out the Nebraska Resale Certificate (Form 13)
Before a business starts selling products or providing taxable services, it must first get a Nebraska Sales Tax Permit (sometimes referred to as a Seller’s Permit) from the Nebraska Department of Revenue. After filing, the state will issue a sales tax ID number that will be used when filling out the resale certificate.
Step 1: Begin by downloading the Nebraska Resale Certificate Form 13
Step 2: Identify the name and business address of the purchaser
Step 3: Identify the name and business address of the seller
Step 4: Indicate whether the certificate will be used for a single or blanket purchase. If the retailer is expected to purchase items frequently from the seller, the blanket certificate section should be used instead of completing a resale certificate for every invoice.
Step 5: Describe the items that will be purchased from the seller.
Step 6: Check the buyer’s type of business (wholesaler, retailer, manufacturer, or lessor) and describe the type of products sold.
Step 7: Provide the Sales Tax Number
Step 8: If the purchase is in a classification exempt from sales taxes (e.g., many agricultural products and equipment, motor fuels, etc.), fill out this section.
Step 9: The purchaser will certify that the property is for resale and sign and date the certificate.
Nebraska Resale or Exempt Sale Certificate Form
Nebraska Resale Certificate FAQs
How much does a Nebraska Resale Certificate cost?
There is no cost for a Nebraska Resale Certificate.
Does a Nebraska Resale Certificate Expire?
In Nebraska, provided the seller has a recurring relationship where sales occur at least once every 12 months, the does not expire Nebraska Code 1-014.07
How often is Nebraska sales tax due?
Most new businesses are set up to file and pay sales and use tax monthly, but depending on the amount of tax collected, your business may have a quarterly or annual filing frequency instead.
Where do I file the Nebraska Resale Certificate?
In Nebraska, the certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).
Is a Resale Certificate the same as a Sales Tax Permit?
No – The Sales Tax Permit and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax Permit allows a business to sell and collect sales tax from taxable products and services in the state, while the Resale Certificate allows the retailer to make tax-exempt purchases for products they intend to resell.
These are two of several registrations your business may need. To learn more, check out our guide to Nebraska business licenses.
What steps should a business take to accept a resale certificate?
When a business is presented with a resale certificate, the seller has the burden of proof to verify that the buyer’s information is correct and to keep these records. Failing to verify this information may make the seller liable for Nebraska sales taxes.
Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out.
– Verify the purchaser’s Nebraska account ID or Nebraska resale number is valid and active by visiting MyTax Nebraska and using the Verify a Registered Business tool.
– Sellers are also responsible for examining the certificate and evaluating whether the goods sold are reasonably consistent with the purchaser’s line of business. For example, if the buyer’s business is a car dealership but wants to purchase office supplies tax-free, the seller should investigate further.
– Keep a file of resale certificates.
