FOR INFORMATION CONTACT:
Douglas A. Ewald, State Tax Commissioner
402/471-5604

JANUARY 1 CHANGES IN SALES AND USE TAX

LINCOLN — State Tax Commissioner Douglas Ewald announced today that, effective January 1, 2007, the cities of Arnold, Dannebrog, Hyannis, and Sargent will begin imposing a city sales and use tax of one percent (1.0%); and the city of Valentine will begin imposing a new city sales tax at the rate of one and one-half percent (1.5%). Also effective January 1, 2007, the city of Broken Bow will increase its current one percent (1.0%) city sales tax to one and one-half percent (1.5%).

Merchants in those cities are being notified of the changes. According to Ewald, the Department of Revenue also provides written notice of changes to sales tax permitholders in affected cities. Literature listing jurisdictions with a local sales and use tax is being updated and distributed.

Ewald said that all retailers who sell items for delivery in a community with a local (city) sales tax are responsible for collecting both the local and state sales taxes. Local sales tax receipts are reported to the Department of Revenue along with state sales tax receipts, and are returned to the community from which they were collected. In the event sales tax is not collected on a taxable sale by the merchant at the time of purchase, the buyer is responsible for paying the appropriate use tax directly to the department.

Local sales and use taxes can be set at 0.5%, 1.0% and 1.5%. With these latest changes on January 1, 2007, three cities and one county will have a 0.5% sales and use tax rate; 94 cities will have a 1.0% rate; and 58 cities will have a 1.5% rate.

More detailed information about sales and use tax is available on the department's Web site at www.revenue.ne.gov, including rates, forms, information guides, revenue rulings, frequently asked questions, and a schedule of the department's free educational seminars.

APPROVED:
Douglas A. Ewald
State Tax Commissioner