NE 01-02-9 Sales and Use Tax 2002-09-30

Which services became subject to Nebraska sales tax on October 1, 2002, and what do those service categories cover?

Short answer: Effective October 1, 2002, Laws 2002, LB 1085 imposed Nebraska (and applicable local option) sales and use tax on the gross receipts of nine enumerated services, and Revenue Ruling 01-02-9 defines each. Providers of these services are retailers who must collect and remit the tax: building cleaning and maintenance services (interior and exterior cleaning of commercial and residential buildings, homes, apartments, outbuildings, and agricultural buildings); pest control services; security services (consulting/training on security, protecting property from theft/vandalism/destruction, or protecting individuals from harm); motor vehicle washing and waxing (including polishing and detailing, and coin-operated facilities, which may commingle the tax in the price); motor vehicle towing (including winching a vehicle out of a ditch and uprighting overturned vehicles); motor vehicle painting and refinishing; computer software training charged by the software retailer; installation and application labor when the property is taxable; and labor associated with the sale of property by an Option 1 contractor. Sales and Use Tax Regulation 1-007 is incomplete to the extent it omits these services.

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This page answers the general question as of 2002. 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Ruling is a general statement of Department policy rather than advice to a single taxpayer, but it can be amended, superseded, or made obsolete by a later ruling or a change in statute or regulation, many rulings in this series have been rescinded or superseded, so confirm it is still in effect before relying on it.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

Nebraska's 2002 tax bill LB 1085 made a batch of services taxable for the first time. Effective October 1, 2002, providers of the services below are retailers who must collect and remit Nebraska and applicable local option (city) sales and use tax on their gross receipts. This ruling lists and defines each one.

The newly taxable services:

Building cleaning and maintenance — interior and exterior cleaning of commercial and residential buildings, homes, apartments, outbuildings, and agricultural buildings.
Pest control — inspection or certification reports, and identifying, preventing, controlling, neutralizing, or eliminating pests (by chemical or mechanical means) in or on buildings, trees, lawns, shrubs, and other property.
Security services — consulting and training on security matters, protecting property from theft/vandalism/destruction, or protecting individuals from harm.
Motor vehicle washing and waxing — washing, waxing, polishing, and detailing the exterior or interior of cars, vans, buses, trucks, trailers, tractors and semitrailers, RVs, and motorcycles. Coin-operated facilities are included and may commingle the tax in the selling price.
Motor vehicle towing — towing, pulling, or transporting a vehicle, including winching a vehicle out of a ditch and uprighting overturned semi-tractors, trailers, or other vehicles.
Motor vehicle painting — painting and refinishing processes on the same range of vehicles.
Computer software training — charges paid to the software retailer (by the retailer or on its behalf), taxable whether optional or mandatory and whenever provided.
Installation and application labor — taxable when associated with property that is subject to tax, whether performed by the seller or another person.
Option 1 contractor labor — annexing, fabricating, installing, applying, and repairing building materials and fixtures annexed to real estate.

Sales and Use Tax Regulation 1-007 is incomplete to the extent it doesn't include these services in the definition of taxable "gross receipts."

What this means for you

A provider of any of these services

If you clean buildings, control pests, provide security, wash/tow/paint vehicles, train on software you sell, install taxable goods, or work as an Option 1 contractor, you became a retailer on October 1, 2002 — register, and collect state plus city sales tax on your service receipts. Even coin-operated car washes are covered (and can build the tax into the posted price).

A business or consumer buying these services

Expect sales tax on these service invoices from October 1, 2002 forward.

Common questions

Q: Are coin-operated car washes taxable?
A: Yes. Motor vehicle washing and waxing includes coin-operated facilities, which may commingle the tax in the selling price.

Q: Does pest control include inspections and certification reports?
A: Yes — inspection or certification reports are part of taxable pest control services, along with controlling or eliminating pests.

Q: Is this just the state sales tax?
A: No — providers collect Nebraska sales tax and the applicable local option (city) sales tax.

Citations and references

Laws 2002, LB 1085 — imposed sales and use tax on the gross receipts of the nine enumerated services, effective October 1, 2002.
Reg 1-007 — incomplete to the extent it omits these services from the definition of taxable gross receipts.
Related 2002 rulings — computer software training (01-02-5), installation/application labor (01-02-8), and Option 1 contractor labor (01-02-7) are addressed in their own companion rulings.

Source

Original ruling text

REVENUE RULING 1-02-9
September 30, 2002
Sales and Use Tax - Gross Receipts Deﬁned. EFFECTIVE OCTOBER 1, 2002, THE PROVISIONS
OF LAWS 2002, LB 1085, IMPOSE SALES AND USE TAX ON THE GROSS RECEIPTS OF
CERTAIN SERVICES.
Beginning October 1, 2002, providers of the following services are retailers and must collect and
remit the Nebraska and applicable local option sales and use tax on the sale of such services:
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Building cleaning and maintenance services;
Pest control services;
Security services;
Motor vehicle washing and waxing;
Motor vehicle towing;
Motor vehicle painting;
Computer software training;
Installation and application labor; and
Labor associated with the sale of property by an Option 1 contractor.

Building cleaning and maintenance services include both interior and exterior cleaning of commercial
and residential buildings, homes, apartments, outbuildings and agricultural buildings.
Pest control services consist of providing inspection or certiﬁcation reports, and identifying,
preventing, controlling, neutralizing or eliminating by use of chemical or mechanical means
infestations of pests in or on buildings, trees, lawns, shrubs and any other property.
Security services consist of consulting and training services on security matters, protecting property
from theft, vandalism and destruction, or protecting individuals from harm.
Motor vehicle washing and waxing services include the washing, waxing, polishing and detailing
the exterior or interior of a car, van, bus, truck, trailer, tractor and semitrailer, recreational vehicle
and motorcycle. Coin-operated facilities are included and may commingle the amount of tax in the
selling price of the service.
Motor vehicle towing consists of towing, pulling, or transporting a motor vehicle and includes
pulling or winching a vehicle out of a ditch and uprighting overturned semi-tractors and trailers or
other motor vehicles.
Motor vehicle painting includes painting and reﬁnishing processes on cars, vans, buses, trucks,
trailers, tractors and semitrailers, recreational vehicles and motorcycles.
Computer software training charges are taxable when paid to the retailer of the software. The
training can be conducted by the retailer of the software or on its behalf by another person. The
charges are taxable regardless of whether the training is an optional or a mandatory part of the sale,
lease, rental or licensing of computer software, or whether the training is provided at a different
time than the actual sale of the software.

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

Revenue Ruling 1-02-9

September 30, 2002

Page 2 of 2

Installation and application labor is subject to tax when associated with property that is subject to
tax. Charges for the installation and application of property are taxable whether performed by the
seller of the property or another person.
Labor performed by an Option 1 contractor is subject to tax and consists of annexing, fabricating,
installing, applying, and repairing building materials and ﬁxtures annexed to real estate.
The provisions of Sales and Use Tax Regulation 1-007 are incomplete to the extent they do not
include the above-referenced services in the deﬁnition of taxable “Gross Receipts” as required by
Laws 2002, LB 1085.
APPROVED:

Mary Jane Egr
State Tax Commissioner
September 30, 2002

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