Current through September 17, 2024
036.01 Donations
Donors are the consumers of any property purchased to be
donated and the purchase of the property in Nebraska is taxable, unless an
exemption otherwise applies. If a gift is delivered in Nebraska to either the
donor or the donee, sales tax must be collected by the retailer from the
donor.
036.01A If a person donates
cash to an organization that is exempt from paying sales tax (sales tax exempt
nonprofit), the sales tax exempt nonprofit can purchase property to be given
away in a raffle or contest without paying or collecting sales tax.
036.01B Persons who purchase property that is
donated to a sales tax exempt nonprofit are the consumers of the property
donated and must pay sales tax on the purchase whether the property is
delivered to the donor or to the sales tax exempt nonprofit.
036.01C If the donated property is a motor
vehicle, the donor must pay use tax to the county treasurer based on the cost
of the motor vehicle to the donor and the location of the donor.
036.02 Out-of-State Deliveries
Retailers who deliver property to either the donor or the
donee at a location outside of Nebraska, are not required to collect sales tax
.
036.03 Prizes Awarded by
Sales Tax Exempt Nonprofits
Sales tax exempt nonprofits may purchase property to be
awarded as prizes sales tax exempt. The recipient of the property that is
awarded by the sales tax exempt nonprofit does not have to pay sales or use tax
upon receiving the property. (
Reg-1-090,
Nonprofit Organizations, and
Reg-1-014,
Exempt Sale Certificate)
036.04 Motor Vehicles Awarded as Prizes
If the property awarded is a motor vehicle, sales tax is
collected at the time the motor vehicle is purchased, donated, or registered in
Nebraska, based on the purchase price, the location of the nonprofit
organization or winner, and whether the nonprofit or the winner purchased the
motor vehicle. This is shown in the examples in subsections A through E below.
Use tax may also be due if there is a later transfer of title without
registration. (
Reg-1-020,
Motor Vehicles)
036.04A For example,
if a sales tax exempt nonprofit purchases and takes title to a motor vehicle to
be awarded to the winner of a raffle or contest, the winner does not owe sales
tax when registering the motor vehicle, because the nonprofit is exempt from
sales tax and the winner did not purchase the motor vehicle. The sales tax
exempt nonprofit must provide the winner a completed Nebraska Sales/Use Tax and
Tire Fee Statement, Form 6, with exemption block 1 or 10 checked, and include
its sales tax exemption number. The winner then provides a copy of the Form 6
to the county treasurer showing the tax exempt status of the sales tax exempt
nonprofit at the time the winner registers the motor vehicle.
036.04B However, if a sales tax exempt
nonprofit never takes title to the motor vehicle that is awarded in a raffle or
contest, but instead pays the dealer the purchase price after the raffle or
contest is concluded, and the title to the motor vehicle transfers directly to
the winner, the winner is deemed to have purchased the motor vehicle and owes
sales tax at the time of registration based on the amount paid by the sales tax
exempt nonprofit on the winner's behalf. The sales tax that is due is
calculated based on the registration address of the winner.
036.04C A nonprofit organization that is not
sales tax exempt which purchases and takes title to a motor vehicle that will
be awarded to the winner of a raffle or contest must pay the sales tax to the
county treasurer based on the business location of the nonprofit organization.
The winner does not owe additional sales tax at the time of registration
because the winner did not purchase the motor vehicle. The nonprofit
organization must provide the winner a completed Nebraska Sales/Use Tax and
Tire Fee Statement, Form 6, with exemption block 10 checked. The winner then
provides a copy of the Form 6 to the county treasurer at the time the winner
registers the motor vehicle.
036.04D However, if a nonprofit organization
that is not sales tax exempt does not take title to the motor vehicle, but
instead pays the dealer the purchase price after the raffle or contest is
concluded, and the title to the motor vehicle transfers directly to the winner
of the raffle or contest, the winner is deemed to have purchased the motor
vehicle and owes sales tax at the time of registration based on the amount paid
by the nonprofit organization on the winner's behalf. The sales tax that is due
is calculated based on the registration address of the winner.
036.04E If a dealer donates a motor vehicle
to a nonprofit which awards the motor vehicle as a prize in a raffle or
contest, the dealer must pay sales or use tax to the county treasurer. The tax
is calculated based on the dealer's cost of the motor vehicle and its business
address. The winner owes no additional sales tax at the time of registration
because the winner paid nothing for the motor vehicle. This applies regardless
of whether or not the nonprofit is sales tax exempt.
036.05 Promotional Give-Aways
The sale of property to be given away for advertising or
promotional purposes is taxable. If property is purchased for resale and
subsequently given away, the purchaser must include the cost of the property on
the use tax return and remit the use tax due.
036.06 Pickle Cards, Lottery Tickets, and
Raffle Tickets
Sales of pickle cards, lottery tickets, and raffle tickets to
individual participants are sales of a chance to win and are exempt from sales
and use taxes. The sale of the pickle cards or tickets to an organization is
taxable, unless it is a sales tax-exempt organization or a sales tax-exempt
governmental unit. (
Reg-1-090
Nonprofit Organizations, and
Reg-1-093,
Governmental Units)
036.07
Nebraska Lottery Tickets
Sales of Nebraska Lottery tickets to individual participants
or to Lottery Game Retailers are exempt from sales and use
taxes.
