NE 01-00-1 Sales and Use Tax 2000-07-12

Are a Nebraska city, county, or joint airport authority's purchases exempt from sales and use tax?

Short answer: Mostly exempt, starting October 1, 2000. Under Laws 2000, LB 557, purchases by a Nebraska city, county, or joint airport authority are exempt from sales and use tax, except purchases for use in the business of furnishing gas, water, electricity, or heat, which remain taxable. To buy tax-free on and after October 1, 2000, the authority issues a Nebraska Resale or Exempt Sale Certificate (Form 13) to the vendor and, because governmental units are not assigned exemption numbers (Regulation 1-093.01), indicates exemption #1 in Section B. The exemption does not extend to privately owned airports or to a person buying property to donate to the authority. An authority may appoint a prime contractor as purchasing agent (Form 17) for building materials annexed to authority property. Tax paid in error on or after October 1, 2000 can be refunded via Form 7 if the refund is $2.00 or more, and authorities must still collect tax on their own taxable sales.

Apply this to your situation

This page answers the general question as of 2000. Ezel answers yours, under current Nebraska tax law, with citations.

Disclaimer: This is an official Revenue Ruling of the Nebraska Department of Revenue, a guidance document stating the Department's interpretation of how Nebraska tax law applies. Each Nebraska guidance document carries the notice that it 'is advisory in nature but is binding on the Nebraska Department of Revenue until amended.' Unlike a private letter ruling, a Revenue Ruling is a general statement of Department policy rather than advice to a single taxpayer, but it can be amended, superseded, or made obsolete by a later ruling or a change in statute or regulation, many rulings in this series have been rescinded or superseded, so confirm it is still in effect before relying on it. Nebraska's local option sales and use taxes are administered by the Department, not self-collected by home-rule cities. This summary is informational only and is not legal or tax advice. Consult a licensed Nebraska tax professional about your situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

This ruling explains a new sales-and-use-tax exemption for public airport authorities created by the 2000 Legislature.

The exemption. Under Laws 2000, LB 557, effective October 1, 2000, purchases by a Nebraska city, county, or joint airport authority are exempt from sales and use taxes. The one carve-out: purchases for use in the business of furnishing gas, water, electricity, or heat are still taxed.

How to claim it. For purchases on and after October 1, 2000, the authority gives the vendor a Nebraska Resale or Exempt Sale Certificate, Form 13. Because governmental units are not assigned exemption numbers (Regulation 1-093.01), the authority writes exemption #1 in Section B of the Form 13.

Limits on the exemption:

It does not extend to privately owned airports, whether or not they are open to public use.
It cannot be extended to a person or business buying property or services to donate or give to the authority.

Contractors. An authority may appoint a prime contractor as its purchasing agent to buy building materials that will be annexed to authority-owned property, using a Purchasing Agent Appointment and Delegation of Authority for Sales and Use Tax, Form 17.

Refunds and the authority's own sales. Sales or use tax paid in error on or after October 1, 2000 can be refunded if the refund is $2.00 or more, by filing a Claim for Overpayment of Sales and Use Tax, Form 7. Authorities must still collect tax on their own sales of taxable property and services.

Effect on the regulations. LB 557 supersedes Regulation 1-093.06A; purchases by the other governmental units listed in Regulation 1-093.06 remain taxable, and Regulations 1-012.02C and 1-093.04 are incomplete to the extent they omit airport authorities as exempt governmental units.

What this means for you

A city, county, or joint airport authority

Your general purchases became exempt on October 1, 2000 — give vendors a Form 13 marked "exemption #1" in Section B. But keep paying tax on anything you buy to run a utility operation (gas, water, electricity, or heat), and keep collecting tax on your own taxable sales.

A contractor working for an airport authority

You can be appointed the authority's purchasing agent (Form 17) to buy exempt building materials that will be annexed to authority property — but the authority's exempt status can't be borrowed for goods you buy to donate to it.

A privately owned airport

This exemption is not for you: it applies only to public city, county, or joint airport authorities, regardless of whether a private airport is open to public use.

Common questions

Q: When did the airport-authority exemption take effect?
A: October 1, 2000, under Laws 2000, LB 557.

Q: Is everything an airport authority buys exempt?
A: No — purchases for use in the business of furnishing gas, water, electricity, or heat remain taxable.

Q: How does the authority document the exemption?
A: With a Form 13 given to the vendor, marked "exemption #1" in Section B, since governmental units are not assigned exemption numbers.

Citations and references

Laws 2000, LB 557 — creates the sales-and-use-tax exemption for city, county, and joint airport authorities (except gas/water/electricity/heat purchases), effective October 1, 2000.
Nebraska Sales and Use Tax Regulation 1-093.01 — governmental units are not assigned exemption numbers, so the authority uses "exemption #1."
Regulation 1-093.06A (superseded); Regulation 1-093.06; Regulations 1-012.02C and 1-093.04 — the regulations LB 557 supersedes or renders incomplete.
Form 13 (Exempt Sale Certificate); Form 17 (Purchasing Agent Appointment); Form 7 (Claim for Overpayment) — the certificates and refund claim referenced.

Source

Original ruling text

Revenue Ruling 1-00-1

Sales and Use Tax - Airport Authorities. EFFECTIVE OCTOBER 1, 2000, PURCHASES BY A
NEBRASKA CITY AIRPORT AUTHORITY, COUNTY AIRPORT AUTHORITY, OR JOINT
AIRPORT AUTHORITY ARE EXEMPT FROM SALES AND USE TAXES. THIS EXEMPTION
APPLIES TO ALL PURCHASES EXCEPT THOSE FOR USE IN THE BUSINESS OF
FURNISHING GAS, WATER, ELECTRICITY OR HEAT.
Laws 2000, LB 557, provides an exemption for purchases by a Nebraska city, county, or joint
airport authority (authority) except for purchases for use in the business of furnishing gas, water,
electricity, or heat. Purchases for use in furnishing gas, water, electricity, or heat are taxed. For
purchases made on and after October 1, 2000, the authority must issue a Nebraska Resale or Exempt
Sale Certificate, Form 13, to the vendor in order to purchase the item tax-free. As provided in
Nebraska Sales and Use Tax Regulation 1-093.01, governmental units are not assigned exemption
numbers. Therefore, the authority must indicate exemption #1 in Section B of the Form 13.
The exemption for Nebraska city, county, or joint airport authorities does not extend to privatelyowned airports, whether or not available for public use.
An authority may appoint as its agent a prime contractor to purchase building materials that will be
annexed to property owned by the authority. The appointment of the prime contractor as purchasing
agent is completed by issuing to the contractor a Purchasing Agent Appointment and Delegation of
Authority for Sales and Use Tax, Form 17. The exempt status of the authority cannot be extended
to a person or business purchasing property or services to be donated or given to the authority.
Sales or use taxes paid in error on purchases made on and after October 1, 2000, can be refunded
to the authority provided the amount of the refund is $2.00 or more. To receive the refund, the
authority must file a Claim for Overpayment of Sales and Use Tax, Form 7.
Authorities are still required to collect tax on their sales of property and services which are subject
to tax.
The provisions of Sales and Use Tax Regulation 1-093.06A are superseded with the passage of
LB 557. Purchases by the other governmental units listed in Regulation 1-093.06 remain taxable.
Regulations 1-012.02C and 1-093.04 are incomplete to the extent they do not include Nebraska
city, county, or joint airport authorities as exempt governmental units.
APPROVED:

Mary Jane Egr
State Tax Commissioner
July 12, 2000

Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818

Get today's answer for your situation

You just read a 2000 ruling on this question. Ezel checks current Nebraska tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.