Mostly SaaS-friendly, with a security software carve-out
Think SaaS is always tax-free? In Nebraska, that assumption could cost you. While most SaaS escapes taxation, security software gets classified as a taxable service.
The quick version: $100,000 in sales or 200 transactions triggers nexus. SaaS is exempt — unless it performs a security function.
Nebraska sales tax rate table
| Field | Value |
|---|---|
| State base rate | 5.5% |
| Average combined rate | 6.94% |
| Local add-on range | 0% to 1.5% |
| Maximum combined rate | 7.0% |
| Rates vary by county/city | Yes |
| Sourcing | Destination-based |
Major cities like Omaha and Lincoln impose local taxes that push combined rates above the state base.
$100,000 or 200 transactions
Nebraska requires you to collect sales tax once you exceed $100,000 in gross sales or 200 transactions during the previous or current calendar year.
- All sales count toward the threshold, not just taxable ones.
- Marketplace sales count toward the threshold, but you're not separately liable once the marketplace collects.
- Register by the first day of the second calendar month after you cross either threshold.
SaaS is exempt — security software is the exception
| Product / service | Tax treatment |
|---|---|
| SaaS (B2B and B2C) | Generally exempt |
| Security software (antivirus, firewall, threat detection) | Taxable — classified as a "security service" |
| Downloaded software (permanent license) | Taxable |
| Streaming / subscription software | Exempt (unless security-related) |
| Digital goods (e-books, music, video) | Taxable — "specified digital products" |
| Data processing / cloud storage | Generally exempt |
The security carve-out: if you offer cybersecurity tools, review your offerings carefully — this narrow exception is easy to miss.
Product taxability in Nebraska
| Product category | Tax treatment |
|---|---|
| Groceries & unprepared food | Exempt |
| Prepared food & restaurant meals | Taxable |
| Candy & soft drinks | Taxable |
| Clothing & apparel | Taxable |
| Prescription drugs | Exempt |
| Manufacturing machinery & equipment | Exempt |
| Agricultural inputs | Exempt |
| Computers & business equipment | Taxable |
Candy and soft drinks are taxable, unlike groceries — point-of-sale systems need to distinguish the two.
Nebraska does not offer any sales tax holidays
Unlike neighboring Iowa, Nebraska maintains its 5.5% rate year-round on all taxable goods.
Filing and registration
Registration
Register online through the Nebraska Taxpayer Access Point (TAP). Free, typically 7 to 10 business days.
Filing frequencies
| Frequency | Assigned when… |
|---|---|
| Monthly | Liability exceeds $3,000/month |
| Quarterly | Liability $300–$3,000/month |
| Annual | Liability under $300/month |
Returns due the 20th of the month following the reporting period.
Penalties and interest
- Late filing/payment: 10% of tax due
- Interest: 3% above the federal discount rate
Vendor discount: 2.5% (reduced from 3% in Jan 2026), capped at $75/month.
Not sure which of these apply to you?
We map your Nebraska exposure — the security software rule, digital goods taxability — and tell you exactly what to do next.
Not home-rule — a full SST member
Nebraska is not a home-rule state — register once, and the state distributes local taxes. Nebraska is a full SST member, offering free certified service providers and standardized definitions.
Voluntary Disclosure Agreement (VDA)
Nebraska offers a formal VDA program. Lookback is typically 3 years (vs. 4-year standard). Penalties waived; interest owed. Process takes 60–90 days.
Audit risk in Nebraska
Moderate enforcement. Common triggers: high exempt sales without documentation, misclassified digital goods or security software, use tax discrepancies. Statute of limitations: 3 years; indefinite for fraud.
Recent changes & quirky rules
SaaS is exempt, but security-function software is a taxable service.
Reduced from 3% to 2.5%, capped at $75/month.
Exemptions & resale certificates
Nebraska issues Form 13 (Resale or Exempt Sale Certificate), also accepts SST Uniform Exemption Certificate. Blanket, don't expire. Common exemptions: resale, manufacturing, agriculture, government.
Your next steps for Nebraska compliance
- Sell software with security features? Review classifications carefully.
- Sell digital goods? Nebraska taxes e-books, streaming, and games.
- Have past exposure? A VDA saves a year of back taxes and all penalties.
