Nebraska SaaS sales tax at a glance
| Detail | Value |
|---|---|
| Is SaaS taxable? | Not taxable Taxed if downloaded |
| Downloaded software | Taxable |
| Base state sales tax rate | 5.5% |
| Typical combined rate | 5.5% to 8% |
| Local tax rates? | Yes |
| Economic nexus threshold | More than $100,000 in sales or 200 transactions |
| Reference period | The current or previous calendar year |
| Revenue authority | Nebraska Department of Revenue |
Is SaaS taxable in Nebraska?
The rule
Nebraska treats SaaS as nontaxable hosted access rather than a transfer of software, provided nothing is downloaded.
The main exception
Nebraska taxes software however it is conveyed, so any downloaded or installed component, and maintenance that includes upgrades, is taxable.
What to do
Bill hosted access and any downloadable client or desktop app on separate invoice lines, so only the software you actually transfer is taxed.
Is your product taxable in Nebraska?
Whether a particular product is taxed in Nebraska can depend on two things: how the software reaches the customer and how you write the invoice.
Does it matter how the software reaches the customer?
In Nebraska, downloaded software is taxable. Software counts as downloaded when the customer installs a copy, such as a desktop app, an agent or an offline client, even if most of the product runs online.
Does it matter how you write the invoice?
In Nebraska, setup, implementation and training fees are taxable when paid to the seller of taxable software. Listing them on their own invoice lines, rather than inside one software price, is what lets them be treated separately.
How are other software products and services taxed in Nebraska?
SaaS rarely ships alone. This is how Nebraska treats the products and charges that usually sit next to it on an invoice.
| Product or charge | Treatment |
|---|---|
| Downloaded software | Taxable |
| Custom software | Taxable |
| Cloud infrastructure and platforms (IaaS, PaaS) | Not taxable |
| AI tools and API access | Not taxable Unless software is transferred |
| Digital goods (e-books, music, video) | Taxable |
| Maintenance and support | Taxable When it includes software upgrades |
| Setup, implementation and training | Taxable When paid to the seller of taxable software |
Does Nebraska tax B2B and B2C SaaS differently?
No. Nebraska treats SaaS the same way for business and consumer buyers.
How much sales tax do you charge on SaaS in Nebraska?
None. Nebraska does not tax SaaS, so there is nothing to charge on the subscription itself.
Do cities or counties tax SaaS differently?
No. Cities and counties follow the state's rules for SaaS, so whether it is taxed does not change from one address to another.
General sales tax rates, including any local rates, are in our Nebraska sales tax guide.
Do you need to register for sales tax in Nebraska?
Physical and economic nexus
Registration follows nexus. Once you have nexus in Nebraska and sell something taxable there, you need to register. Nexus comes from a physical presence, such as an office, staff or inventory in the state, or from passing an economic threshold.
In Nebraska, the economic nexus threshold is more than $100,000 in sales or 200 transactions over the current or previous calendar year. Exempt sales still count toward it. Our Nebraska nexus guide covers the rules in full.
Which address sets the rate
For remote sellers, the rate is based on where your customer is, not where your business or servers are. Buyers with users in more than one state can give you a multiple points of use certificate and pay Nebraska tax only on the share used there.
Buyers who do not pay tax
Some buyers can give you a certificate instead of paying tax. In Nebraska, that includes resellers, government agencies and certain qualifying nonprofits such as hospitals and schools. Collect the certificate at the time of sale and keep it, because in an audit it is the only thing standing between you and the tax.
How to register, collect and file in Nebraska
Register
If you need to register, do it with the Nebraska Department of Revenue through the Department's online Nebraska Tax Application (Form 20). Note your account number and the filing frequency you are given, since both decide when and how you file.
Collect the right amount
Nebraska does not tax SaaS subscriptions, so do not add sales tax to them. If you also sell something Nebraska does tax, such as downloaded software, register once you have nexus and charge tax only on those items.
- List services on their own invoice lines, so each charge is taxed on its own terms.
- Describe each product on the invoice the way it actually reaches the customer: online access, a download or something shipped.
- Recheck the treatment whenever you add a desktop app, a hardware option or a new add-on, since each can change what is taxable.
File and keep records
Your filing frequency is assigned when you register: monthly, quarterly or annually, depending on how much tax you collect. Returns are due by the 20th of the month after each period ends.
You must file a return for every period, even when no tax is due.
Keep invoices, exemption certificates and returns for at least three years. That paperwork is what decides the taxable amount if you are audited years later.
What should SaaS businesses watch when selling in Nebraska?
Past sales where no tax was charged
Because Nebraska does not tax SaaS, tax you did not charge on subscriptions is not owed. Check past sales of anything Nebraska does tax, such as downloaded software, made while you were over the threshold. On those, the Nebraska Department of Revenue can assess the unpaid tax plus a late-filing penalty of 10% of the tax or $25, whichever is greater, and interest.
A voluntary disclosure agreement can reduce penalties if you come forward first. Work out which past sales were taxable before you come forward, so you know the size of the exposure.
Rule changes worth tracking
Nothing enacted or pending changes how Nebraska taxes SaaS.
The rules verified date at the top of this page shows when these rules were last checked.
How does Galvix help SaaS businesses manage Nebraska sales tax compliance?
We handle this
Sales tax in Nebraska is one line in a much larger problem. Most SaaS companies sell into 30 or 40 states, each with its own answer, threshold and filing calendar.
- We map each of your products and add-ons against every state's rules, including the ones that can change the answer in Nebraska.
- We watch your sales against every threshold and tell you before you cross one, not after.
- We handle registrations wherever you need one.
- We file and remit on each state's schedule, zero returns included.
- We collect and store exemption certificates so they are there when an auditor asks.