FOR INFORMATION CONTACT:
Douglas A. Ewald, Tax Commissioner
402/471-5604
Catherine D. Lang, Deputy Tax Commissioner
402/471-5919

THE SALES PRICE OF A TV CONVERTER BOX IS SUBJECT TO
NEBRASKA AND CITY SALES TAX WITHOUT ANY DEDUCTION
FOR COUPONS PROVIDED BY THE FEDERAL DEPARTMENT OF COMMMERCE

LINCOLN — Retailers in Nebraska have asked how to handle the $40 coupons provided to consumers by the National Telecommunications and Information section of the U.S. Department of Commerce. These coupons were authorized by Congress so that consumers without cable or satellite access or digital televisions could purchase converters to allow their television sets to continue to receive TV signals after February 17, 2009, when broadcasters convert their signals to the mandated digital format.

Under Nebraska Sales and Use Tax Regulation 1-037.03A, the value of a coupon which is accepted by the retailer as part of the selling price, and upon which the retailer is reimbursed for the amount of the coupon by a third-party, cannot be subtracted from the selling price when determining the taxable amount of the sale. This is the rule even when the third party making the reimbursement is the Federal government.

For more information on this issue as well as for general tax questions and assistance, please continue to contact the Nebraska Department of Revenue during regular business hours at 1-402-471-5729, or 1-800-742-7474 (toll free in Nebraska and Iowa). Nebraska tax forms and more information can also be found on the Department’s Web site at www.revenue.ne.gov.

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APPROVED:
Douglas A. Ewald
Tax Commissioner