Tax & Accounting Blog

Exemption for Custom Software and New Sales Tax Holiday a Possibility in Nebraska

Indirect Tax, ONESOURCE March 30, 2016

The 2nd session of the Nebraska 2015-2016 legislative session is nearly over, but there may be a few changes to the state’s exemptions, as well as a new sales tax holiday in 2016. 

Unlike many other U.S. states, the state of Nebraska still imposes a sales and use tax on the sale of custom software. Under legislative bill (LB) 812, that would change beginning January 1, 2017. 

The bill, introduced by Senator Jim Smith, seeks to exempt custom software from taxation, to “bring Nebraska in line with most states in the country,” as indicated by the Senator’s blog. Under LB 812, the sale, lease, rental, storage, or use of custom software would be exempt from sales and use taxes. 

Additionally, LB 974 would establish a back to school sales tax holiday beginning the first Friday weekend in August. Purchases of clothing and school supplies up to $100.00 would be exempt from sales tax, while computers and computer-related accessories up to $750.00 would be exempt.  

While both bills have been read for the first time, there has not been more progress on either since early this year, so while a tax-free weekend is a possibility this August, it is unlikely.