Remote seller sales tax requirements passed

Internet retailers without a physical presence in Nebraska are required to collect and remit state sales tax on purchases made by Nebraska residents under a bill passed by lawmakers March 15.

The U.S. Supreme Court ruled last June in South Dakota v. Wayfair that a state may require online retailers without a physical presence in the state to collect and remit state sales tax.

The South Dakota law at question in the Wayfair case includes an exception for small retailers with sales of $100,000 or less or 200 or fewer annual transactions.

LB284, sponsored by Omaha Sen. John McCollister, includes this standard and requires remote sellers exceeding either of those thresholds in the previous or current calendar year to collect and remit state sales tax. The bill also requires “multivendor marketplace platforms”—online marketplaces such as Amazon or Ebay—to collect and remit state sales tax for the smaller sellers they serve if the marketplaces exceed the thresholds.

The bill requires a retailer to obtain a permit from the state Department of Revenue and begin collecting sales tax on or before the first day of the second calendar month after it exceeds the threshold for the first time.

The Legislative Fiscal Office has estimated that requiring remote sellers to collect and remit state sales tax will generate an additional $30 million to $40 million in revenue each year.

Senators voted 43-0 to pass LB284. The bill’s provisions become operative April 1.