NE 01-99-3 Sales and Use Tax 1999-11-22

Are a Nebraska Natural Resource District's purchases exempt from sales and use tax?

Short answer: Yes, starting October 1, 1999. Under Laws 1999, LB 232, purchases by a Nebraska Natural Resource District are exempt from sales and use taxes. To buy tax-free on and after October 1, 1999, the District 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 category #1 on the Form 13. A District may appoint a prime contractor as its purchasing agent (Form 17) for building materials annexed to District-owned property, but the exempt status cannot be extended to a person buying property or services to donate to the District. Tax paid in error on or after October 1, 1999 can be refunded via Form 7 if the refund is $2.00 or more. LB 232 supersedes Regulation 1-093.06E; purchases by the other governmental units listed in Regulation 1-093.06 remain taxable.

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This page answers the general question as of 1999. 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Ruling is a general statement of Department policy rather than advice to a single taxpayer, but it can be amended, superseded, or made obsolete by a later ruling or a change in statute or regulation, many rulings in this series have been rescinded or superseded, so confirm it is still in effect before relying on it.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 announces a new sales-and-use-tax exemption for Nebraska Natural Resource Districts (NRDs) — the local governmental units that manage flood control, groundwater, soil conservation, and related projects.

The exemption. Under Laws 1999, LB 232, effective October 1, 1999, purchases by a Nebraska Natural Resource District are exempt from sales and use taxes.

How to claim it. For purchases on and after October 1, 1999, the District 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 District indicates exemption category #1 on the Form 13.

Contractors. A District may appoint a prime contractor as its purchasing agent to buy building materials that will be annexed to District-owned property, using a Purchasing Agent Appointment and Delegation of Authority for Sales and Use Tax, Form 17. The District's exempt status cannot be extended to a person or business buying property or services to be donated or given to the District.

Refunds. Sales or use tax paid in error on or after October 1, 1999 can be refunded if the refund is $2.00 or more, by filing a Claim for Overpayment of Sales and Use Tax, Form 7.

Effect on the regulations. LB 232 supersedes Regulation 1-093.06E; purchases by the other governmental units listed in Regulation 1-093.06 remain taxable.

What this means for you

A Natural Resource District

Your purchases became exempt on October 1, 1999 — give vendors a Form 13 marked "exemption category #1." Use a Form 17 to let a prime contractor buy exempt building materials for your projects, and file a Form 7 to recover any tax paid in error (if it's at least $2.00).

A vendor or contractor working with an NRD

Accept the District's Form 13 (exemption category #1) for direct sales, or a Form 17 appointment when buying materials as the District's purchasing agent — but you can't use the District's exemption for goods you intend to donate to it.

Common questions

Q: When did NRD purchases become exempt?
A: October 1, 1999, under Laws 1999, LB 232.

Q: What exemption number does the District use?
A: None is assigned — governmental units indicate "exemption category #1" on the Form 13, per Regulation 1-093.01.

Q: Are all Nebraska governmental units now exempt?
A: No. LB 232 supersedes Regulation 1-093.06E for NRDs, but purchases by the other governmental units listed in Regulation 1-093.06 remain taxable.

Citations and references

Laws 1999, LB 232 — creates the sales-and-use-tax exemption for Nebraska Natural Resource Districts, effective October 1, 1999.
Nebraska Sales and Use Tax Regulation 1-093.01 — governmental units are not assigned exemption numbers, so the District uses "exemption category #1."
Regulation 1-093.06E (superseded); Regulation 1-093.06 — the regulation LB 232 supersedes, and the list whose other units remain taxable.
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 1-99-3
November 22, 1999
Sales and Use Tax - Natural Resource Districts. EFFECTIVE OCTOBER 1, 1999, PURCHASES
BY A NEBRASKA NATURAL RESOURCE DISTRICT ARE EXEMPT FROM SALES AND
USE TAXES.
Laws 1999, LB 232, provides an exemption for purchases by a Nebraska Natural Resource District
(District). For purchases made on and after October 1, 1999, the District must issue a Nebraska
Resale or Exempt Sale Certiﬁcate, Form 13, to the vendor in order to purchase the items tax-free.
As provided in Nebraska Sales and Use Tax Regulation 1-093.01, governmental units are not
assigned exemption numbers. Therefore, the District must indicate exemption category #1 on the
Form 13.
A District may appoint as its agent a prime contractor to purchase building materials that will be
annexed to property owned by the District. The appointment of the prime contractor as its 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 a District cannot be extended to a
person or business purchasing property or services to be donated or given to the District.
Sales or use taxes paid in error on purchases made on and after October 1, 1999, can be refunded to
the District provided the amount of the refund is $2.00 or more. To receive the refund, the District
must ﬁle a Claim for Overpayment of Sales and Use Tax, Form 7.
The provisions of Sales and Use Tax Regulation 1-093.06E are superceded with the passage of
LB 232. Purchases by the other governmental units listed in regulation 1-093.06 remain taxable.
APPROVED:

Mary Jane Egr
State Tax Commissioner
November 22, 1999

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

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