Difference between revisions of "Retail Sales Tax"

Latest revision as of 11:45, 24 November 2010

Sales taxes are added onto the price of goods or services that are purchased. The merchant is responsible for collecting the sales tax at the point of sale and later remand it to the state. Consumers are charged the tax; resellers are exempt if they do not make use of the goods.

In 1921, West Virginia became the first US state to enact a sales tax . Georgia passed legislation enacting a sales tax in 1929. 11 other states enacted sales taxes in 1933 alone. By 1940, at least 30 states had a sales tax. Currently, 45 of the 50 U.S. States levy a sales and use tax.

Nebraska has a 5.5% state sales tax. Municipalities have the option of imposing an additional sales tax of up to 1.5%.

A retailer must get a Sales Tax Id Number to buy wholesale and sell retail.

Questions

• Do I Need a Seller's Permit, Resale Certificate, or do I just need a Sales Tax ID?

A: Just a sales tax ID. Must fill out a form 20 (application). A certificate is mailed to the

• Are food and grocery items subject to sales tax?

A: Sales of items that are food and food ingredients are exempt from sales and use tax except when sold through a vending machine, sold by a concessionaire, or as prepared food. Products containing the “Nutrition Facts” box on the product label are exempt. Dietary supplements are not food or food ingredients. Sales of dietary supplements are subject to tax.

• Is selling snack foods such as potato chips over the counter in a restaurant or tavern considered a concession and therefore taxable?

A: Yes, charge tax. Everything is taxable at a restaurant. Only a grocery store may sell the snack foods free of tax to the customer.

• Can a restaurant purchase food tax exempt if the tax is added when the food is served to the customer?

A: Yes. When you buy them wholesale, give the supplier a form 13 and your business state tax ID number. The food can be purchased tax free since the sales tax is added later when the food item is sold retail to the customer.

• Are cigarettes taxed at a higher rate than 5.5% state + 1.5% local (7%)?

A: No, they are not taxed higher by the retailer when resold to the customer.

• Are alcoholic beverages taxed at a higher rate than 5.5% state + 1.5% local (7%)?

A: Sales of alcoholic beverages are taxable, whether sold packaged as "off-sale," or by-the-drink as "on-sale." Bars, taverns, and restaurants that hold a liquor license are permitted to include the sales tax in the selling price of beverages that are consumed on their premises.

• What does the following statement mean? "Consumer’s use tax is due on the seller’s cost of alcoholic beverages provided free-of-charge."

A: It means if a tavern employee gives away a free drink of an alcoholic beverage, the business must still pay the state the tax as if it was collected by the business at the normal rate; there is sales tax on free drinks.

• Can a restaurant purchase alcoholic beverages tax exempt if the tax is added at resale?

A: Yes. The purchase of alcoholic beverages from state authorized distributors is made tax free, so the restaurant or tavern charges the sales tax to the consumer later. Alcoholic beverage is treated the same as like food as far as taxes are concerned.

• Can a restaurant purchase cigarettes tax exempt if the tax is added at resale?

A: With cigarettes it is more complicated, however, referring specifically to state sales tax, they may be purchased wholesale tax free by a retailer that intends on reselling. The retailer is required to pay other taxes, fees, and stamps which are charged to the retailer by the distributor.

• How is Nebraska Pickle Card Lottery taxed?

A: Pickle card operators do not charge the public sales tax for the cards.