Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 1
InformatIon GuIde
October 2010
OVERVIEW
The lodging tax is imposed on the total gross receipts charged for sleeping accommodations furnished
by a hotel (see the term “hotel” below) in this state. The 1.0% state lodging tax is collected and
remitted to the Department of Revenue (Department) and managed by the Department of Economic
Development (DED). DED uses the proceeds of this fund to promote, encourage, and attract visitors
to Nebraska and enhance the use of travel and tourism facilities within Nebraska.
In addition to the 1.0% state lodging tax, counties may also impose a lodging tax of not more
than 4.0%. The county lodging tax proceeds may be used for local visitor promotion and
improvement activities.
The county tax is imposed, collected, and reported in the same manner as state lodging tax. Counties
wishing to impose a county lodging tax must provide specic documentation to the Department. See
“Establishing a County Lodging Tax” below.
For a listing of the counties that impose a lodging tax and their various rates, please refer to
Nebraska Tax Rate Chronological History of Nebraska Tax Rates - Table 4, County Lodging Tax.
Charges for sleeping accommodations are subject to sales tax in addition to lodging tax. This guide
includes information on sales tax, use tax, and lodging tax responsibilities since many services
provided by a hotel are subject to these taxes.
For purposes of this information guide, the term “sales tax” will mean both sales and use taxes.
All hotels are required to hold BOTH a lodging tax permit and a sales tax permit. Lodging tax is
reported and remitted on the Nebraska and County Lodging Tax Return, Form 64. Sales and use taxes
are reported and remitted on the Nebraska and Local Sales and Use Tax Return, Form 10.
This information guide is intended to provide an overview. Nothing in this guide supersedes, alters,
or otherwise changes any provisions of the Nebraska tax code, regulations, Nebraska Department of
Revenue (Department) rulings, or court decisions.
This information guide may change with updated information or added examples. The Department
recommends you do not print this guide, and instead, check www.revenue.ne.gov periodically
for changes.
TERMS
Gross Receipts. Gross receipts are the total receipts for providing sleeping accommodations, including amounts
charged for additional persons, beds, or bedding. Gross receipts include amounts paid for any city-imposed
occupation tax.
5-141-1980 Rev. 10-2010 Supersedes 5-141-1980 Rev. 11-2009
nebraska and LocaL taxes on LodGInG
Changes to this guide are
indicated by a Red box.
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 2
Hotel. A hotel is a commercial, nonprot, or state-owned facility where the public may obtain sleeping
accommodations for payment. This includes any hotel, motel, tourist home, bed and breakfast, court, lodging
house, campground (charges for RV pads or tent sites), or inn. “Hotel” does not include: the portion of a health
care facility (licensed under the Health Care Facility Licensure Act) which provides rooms, lodging, or sleeping
accommodations for a charge; or a facility operated by an approved educational institution established under
Neb. Rev. Stat. §§ 79 1601 to 79-1607 or 85-1101 to 85-1111, used to house students.
Occupancy. Occupancy is the use or possession of, including the right to use or possess, any space in a hotel if:
v The space is ordinarily used for sleeping accommodations; and
v The occupant’s use is for less than 30 continuous days.
It does not include a function room (for example, a ballroom, banquet room, reception room, or meeting room)
provided it is not used as temporary sleeping accommodations.
Occupant. An occupant is anyone who pays for the use or possession of any space in a hotel that is normally
used for sleeping accommodations. Occupant also includes an organization that pays for a room for a period of
30 continuous days or more, even if a dierent person occupies the room each night, or a dierent room is
provided each night.
TRANSACTIONS WITH OCCUPANTS
The gross receipts of a hotel providing accommodations to an occupant for less than 30 days are subject to:
v State lodging tax;
v Any applicable county lodging tax;
v State sales tax; and
v Any applicable local option sales tax.
Other Service Charges
Hotels may also provide various optional services to their occupants. Only those charges for optional services that
relate to the provision of accommodations are subject to both sales tax and lodging tax. In addition, hotels may
impose other service charges on the occupant for costs associated with the occupant’s use of the room.
Other Service Charges Subject to BOTH Sales and Lodging Taxes
v Extra persons in the room
v Beds
v Bedding
v Reservation fees
v Guaranteed no-show fees
v Early departure fees
v Fees for smoking rooms
v Cancellation fees on guest rooms (see
“Cancellation Fees” below)
v Pet charges
Separately stated charges for the following other services are not subject to lodging tax but are subject to sales tax.
Other Services Subject to Sales Tax ONLY
v Telephone service
v Cable, satellite, or wireless access charges
v Pay-per-view movies and video games
v Meals in restaurants in the hotel
v Room service - food, beverage, mandatory
gratuity charges
v Restocking fee for mini-bar
v Gift shop purchases
v Copy machine and fax charges
v Safe charges
v Fitness facility fees
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 3
Cancellation Fees
When a hotel charges a cancellation fee to a person or group for failing to occupy the number of rooms that have
been reserved at the hotel, the cancellation fee is not subject to sales or lodging tax, provided the hotel is free to rent
the unused rooms to any potential occupant. Cancellation fees are considered “administrative damages” or “penalties
resulting from a failure to complete the terms of a contract” and are not charges for occupancy.
A person or group may make another reservation with the hotel, and is given credit for all or a portion of the
cancellation fee previously paid. Sales and lodging taxes are due on the hotel’s charges for accommodations and
food service before subtracting the credit. The payment of the cancellation fee, at that point, becomes a payment for
accommodations, and is subject to tax.
Forfeited room deposits are, however, subject to sales and lodging taxes because a room was reserved for the
occupant, and the hotel received “consideration” or payment. Reservation fees, or “no-show charges” for guaranteed
rooms, are also subject to sales and lodging taxes when a room has been reserved for the occupant.
Vacation Packages
Vacation packages (e.g., hunting, golf, honeymoon) are not subject to lodging and sales taxes. The tour operators are
the consumers of any lodging, prepared food, and admissions included in the tour/vacation package and must pay tax
when these items are purchased.
A hotel is not allowed to accept a Nebraska Resale or Exempt Sale Certicate, Form 13, from tour operators or
others who are not in the business of providing lodging.
Complimentary rooms, room upgrades, or discounted rooms are subject to sales and lodging taxes based on the
actual amount charged to the occupant for the room. If a room is provided at no charge, the hotel does not incur a
use tax liability.
Occupation Tax
Some cities impose an occupation tax on hotel operators. A city-imposed occupation tax is a cost imposed on the
hotel and is an expense of the hotel. Typically, the occupation tax is passed on to the customer by the hotel to
recover its cost. Regardless of how the occupation tax is stated on the customer’s invoice, it is part of gross receipts
and subject to both sales tax and lodging tax. The hotel may itemize the occupation tax on the room charge, but
is NOT allowed to add the occupation tax rate to the sales and lodging tax rates and charge its customers one
at rate (see Examples 2 and 3 on page 6 of this guide).
EXEMPTIONS
Any organization or governmental unit that is exempt from sales tax is also exempt from lodging tax. To document
qualied purchases, an exempt organization must properly complete and issue the hotel a Form 13. Aliated or
subsidiary organizations (although operating in support of, or under the guidance of, an exempt organization or
governmental unit) may not use the Certicate of Exemption. Exempt organizations from other states are not exempt
from Nebraska sales and lodging taxes, unless they have specically applied for, and been granted, a Nebraska
Certicate of Exemption.
Employees of exempt organizations or governmental units must pay the lodging and sales taxes when they
personally pay for accommodations, even if they are reimbursed by the organization or governmental unit.
For specic details regarding who is exempt, please refer to the “Resource List” below.
The following are examples of charges that are not subject to either lodging tax or sales tax, provided they are
separately stated on the invoice.
Nontaxable for BOTH Sales and Lodging Taxes
v Porter or bellhop services
v Wake-up services
v Valet services including laundry, shoe shine,
and parking
v Child care services
v Complimentary meals and beverages
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 4
30 Continuous Day Exemption
Except for services provided by an RV park, sales and lodging taxes do not apply when occupancy is provided to the
same occupant for a period of 30 continuous days or more. RV park services provided to the same tenant for a period
of 30 continous days:
v are subject to sales tax; and
v are not subject to lodging tax.
“Occupant” includes an organization that pays for a room for a period of 30 continuous days or more, even if a
dierent person occupies the room each night, or a dierent room is provided each night.
Example 1: An airline leases 15 hotel rooms for at least 30 continuous days and pays directly for the
rooms. Whether the rooms are actually used or not, the charge is exempt from sales and lodging taxes. The
occupants and rooms can be dierent each night, or unoccupied, but when the airline pays directly for the
rooms, the charge is exempt from sales and lodging taxes. The exemption is contingent on the occupant
having exclusive use of a room or rooms for periods of 30 continuous days or more.
The hotel must have a written or verbal agreement with the occupant from the rst day of occupation stating that the
term of occupancy, is for at least 30 continuous days. Without an agreement, the hotel must collect sales and lodging
taxes starting on the rst day of occupation and can only issue a credit once the occupant stays for 30 continuous
days or more. Detailed records must be maintained to support this exemption. Form 13 is not required.
Nonprot Organizations
Most nonprot organizations are NOT exempt from sales or lodging tax. The fact that a nonprot organization is
exempt from income tax under section 501(c) of the Internal Revenue Code DOES NOT entitle the organization to
an exemption from Nebraska sales and lodging taxes. For a complete list of nonprot organizations that are exempt,
please see the “Resource List” below. To be exempt, a nonprot organization that performs exempt activities must
have applied for and been granted a Certicate of Exemption from the Department. Furthermore, only the specic
entity issued the Certicate of Exemption is exempt.
Many organizations, particularly in the health care industry, oer multiple services and types of care; however,
only specic services or levels of care are exempt. To document qualied purchases made by an exempt nonprot
organization that has been granted an exemption certicate, it must properly complete and issue the hotel a Form 13.
Religious Organizations
Only religious organizations that have applied for and been granted a Certicate of Exemption from the Department
are exempt from sales and lodging taxes. An exempt religious organization must issue the hotel a properly completed
Form 13. See the “Resource List” below for additional information on religious organizations.
Educational Institutions
Only private and public educational institutions that have applied for and been granted a Certicate of Exemption
from the Department are exempt from sales and lodging taxes. An exempt educational institution must issue the hotel
a properly completed Form 13. See the “Resource List” below for additional information on educational institutions.
Governmental Units
Not all governmental units are exempt from sales and lodging taxes. For more information, see the “Resource List”
below. Federal, state, and local governmental units are not issued numbered exemption certicates. An exemption
number is not required on the Form 13 issued by a governmental unit.
Federal Governmental Units
Purchases made by the United States (federal) government and its agencies and employees using a federal
government charge card, where all charges are directly paid by the government unit, are considered exempt from
any Nebraska sales or lodging taxes without the completion of an exemption certicate. However, purchases made
by an employee of the federal government or one of its agencies using a federal government charge card, where all
charges are NOT directly paid by the government unit, but rather are reimbursed to the employee, are taxable under
Nebraska law.
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 5
The United States General Services Administration (GSA) Smart Pay2® Charge Card Program
provides charge card services to federal government agencies for conducting ocial business. There are
four business lines in this program: Purchases, Travel, Fleet, and Integrated accounts. Travel cards issued by
the federal government may be centrally billed or individually billed. Only the Centrally Billed Accounts
(CBA) in which all charges are billed directly to the federal government and paid directly by the federal
government, qualify to be tax exempt without the completion of a Form 13. Purchases made using an
Individually Billed Account (IBA) card, in which charges are paid by the government employee who is later
reimbursed by the government agency, are not exempt.
Some federal government agencies also make purchases using an “integrated” charge card. The unique
nature of the integrated card is that purchases made with that card can be either centrally billed or
individually billed. Since all purchases are not paid directly by the federal government, purchases made in
Nebraska with the integrated cards are not exempt.
Purchases made with an IBA card are taxable. IBA cards are issued to employees of federal agencies to
pay for ocial travel expenses, and the employee is responsible for payment. These purchases are billed to
the individual employee, and even though the employee’s agency reimburses the employee for authorized
purchases, they are NOT exempt from Nebraska lodging and sales taxes.
Below are common federally issued SmartPay2® charge card numbers. Note that the sixth digit determines
whether charges to the card are exempt or taxable.
Prex Exemption Status for
(1st four digits) Sixth Digit Platform Nebraska Sales and Lodging Taxes
4486 & 4614 1, 2, 3, 4 Visa Taxable
5565 & 5568 1, 2, 3, 4 MasterCard Taxable
5568 6 MasterCard Taxable
4486 & 4614 0, 6, 7, 8, 9 Visa Exempt
5565 6 MasterCard Exempt
5565 & 5568 0, 7, 8, 9 MasterCard Exempt
Please note: This chart diers from the GSA website chart. It provides information on exempt purchases
from Nebraska sales and lodging taxes without the need for a Form 13.
Charges to a federal governmental unit may also be supported by payment with a federal treasury warrant.
State or Local Governmental Units
Purchases are exempt if they are:
v Documented with a Form 13; and
v Paid with a government warrant.
Charge card purchases are taxable when the charges are billed to an individual employee, even though they are
later reimbursed by the agency. A governmental unit may request a refund of any tax paid via the use of a charge
card that is directly billed to, and paid by, the governmental unit. The refund is claimed by submitting a Nebraska
Claim for Overpayment of Sales and Use Tax, Form 7. The governmental unit submitting the claim must provide
documentation showing the charge card purchases were directly billed to, and paid by, the governmental unit.
State and local governmental units from other states are NOT exempt from Nebraska lodging or sales tax.
Documenting Exempt Transactions
A Nebraska Resale or Exempt Sale Certicate, Form 13, Section B must be obtained to document the exempt status
of these purchases. The exemption category entered on the Form 13 should be either 1 or 3.
Please Note: The common carrier exemption cannot be used to exempt the charges for sleeping accommodations
from sales or lodging tax.
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 6
PURCHASES MADE BY HOTELS
Items purchased by the hotel to furnish hotel rooms, or any other areas within the hotel, are subject to sales tax
when purchased. Hotels must also pay sales tax on all supply items such as soap, towels, stationary, business
equipment, (including equipment provided for guests’ use), bedding, and beds. If Nebraska and applicable local
sales tax is not paid at the time of purchase, the hotel must remit use tax on the total cost of the item. Use tax is
reported on lines 4 and 5 of the Nebraska and Local Sales and Use Tax Return, Form 10.
GENERAL TAX INFORMATION
Obtain Permits
Every individual or business that operates a hotel must obtain a Nebraska Sales Tax Permit and a Lodging Tax
Permit for each hotel location. The actual hotel name and location of the hotel, not just the hotel ownership, must be
provided for these permits.
Application for the required permits is made by ling a Nebraska Tax Application, Form 20, with the Department.
The Form 20 is available at www.revenue.ne.gov.
Calculate and Collect the Tax
Sales and lodging taxes are calculated on the total gross receipts from the provision of sleeping accommodations,
unless a specic exemption applies. The total amount charged for the room, (including any charges for a city-
imposed occupation tax) and charges for additional persons, beds, or bedding, are all part of the gross receipts that
are subject to both sales and lodging taxes.
When collecting the sales and lodging taxes, hotel operators are agents of the state. The tax collected is a trust fund
owned by the State of Nebraska. Therefore, the tax collected should be kept separately from other business receipts.
Except with respect to certain “Optional Services” (see above), the lodging tax is calculated at the same time as the
sales tax, and on the same taxable gross receipts amount.
The lodging tax (including any applicable county lodging tax) and the sales tax (including any applicable local sales
tax) are each calculated separately. However, neither calculation includes the other tax when determining the amount
due for each tax program. See the examples below which show two hotel rooms at dierent room rates, and how to
calculate the following on each:
v Occupation tax;
v Sales tax; and
v Lodging tax.
Example 2 is for a hotel room in Omaha at $100 per night.
Example 3 is for a dierent room in the same hotel for $200 per night.
Example 2 Example 3
Hotel room rate: $100.00 $200.00
Add Omaha Hotel Occupation Tax (5.5%)* 5.50 11.00
Gross Receipts Subject to Sales and Lodging Taxes $105.50 $211.00
Gross Receipts $105.50 $211.00
Multiply by sales tax rate: State (5.5%) and Omaha (1.5%) x .07 x .07
Sales Tax Amount $ 7.39 $ 14.77
Gross Receipts $105.50 $211.00
Multiply by lodging tax rate: State (1.0%) and Douglas Co. (4.0%) x .05 x .05
Lodging Tax Amount $ 5.28 $ 10.55
* Note that any applicable occupation tax is included in the gross receipts BEFORE calculating the sales and lodging taxes.
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 7
Sample Invoice: Example 2 Example 3
Room Rate $100.00 $200.00
Omaha Hotel Occupation Tax 5.50 11.00
Sales Tax 7.39 14.77
Lodging Tax 5.28 10.55
Total $118.17** $236.32**
** Some hotels mistakenly combine the sales, lodging, and occupation tax rates into a single “at rate” (or “factor”) and
apply that at rate to the overall room rate charge. This is not correct. As you can see in the above examples, dierent
room rate charges will result in a dierent at rate calculation. Specically, the $100 room has a “at rate” of 18.17%
while the $200 room has a “at rate” of 18.16%. This is why the use of a single at rate calculation is prohibited. The
correct calculation method is to rst apply any city-imposed occupation tax to the room rate charge. This result becomes
the gross receipts amount that is then subject to both the sales and lodging taxes.
Remit the Tax
The state and any county lodging taxes are remitted on the Nebraska and County Lodging Tax Return, Form 64. A
Form 64 must be led for each tax period, or portion of a period, during which the lodging tax permit is active. A
Form 64 must be led even if there is no tax due. Sales and use taxes are remitted on the Nebraska and Local Sales
and Use Tax Return, Form 10. A Form 10 must be led, even if there is no tax due.
Both Forms 10 and 64 are considered to be led in a timely manner if postmarked by the U.S. Postal Service on
or before the 25th day of the month following the tax period covered by the return. The Department will assign a
ling frequency for each type of tax based on the amount of estimated taxable sales. The lodging tax return is led
either monthly or annually, while the sales tax return may be led monthly, quarterly, or annually. A penalty will be
assessed on each return in the amount of $25 or ten percent of the tax due, whichever is greater, if the return is led
after the due date. Interest will be assessed on any unpaid tax from the due date until the tax is paid.
ESTABLISHING A COUNTY LODGING TAX
Any county may authorize a county lodging tax. There are two separate county funds that may be established: the
County Visitors Promotion Fund (Promotion Fund); and the County Visitors Improvement Fund (Improvement
Fund). While the Improvement Fund can only be established after the Promotion Fund is created, they can both be
established within the same resolution. The county lodging tax is remitted with the Form 64, and administered by
the Department. The Department returns the county funds to the adopting county for use in either or both of these
funds. Additional information on these funds is available in the lodging tax statutes, Neb. Rev. Stat. §§ 81-1245
to 81-1262.
To impose a county lodging tax, the county governing body must:
v Hold a public hearing;
v Adopt a resolution to impose the tax; and
v Establish both a Promotion Fund and a visitors’ committee.
Copies of the resolution to adopt the tax and establish the fund and committee must be submitted to the
Department. The tax will not be eective until the rst day of a calendar quarter that is at least 120 days after the
Department has received a copy of the adopting resolution. The tax rate can be 0.5% 1.0%, 1.5%, or 2.0% of the
gross receipts charged for hotel occupancies.
A county may also establish an Improvement Fund by imposing an additional county lodging tax of 0.5%, 1.0%,
1.5%, or 2.0%. The county governing body must hold a public hearing and adopt a resolution to impose the tax
and establish the Improvement Fund. This additional county lodging tax will not be eective until the rst day of
a calendar quarter that is at least 120 days after the Department has received a copy of the adopting resolution.
After receipt of the resolution, an acknowledgment letter will be sent to the county governing body to conrm the
rate and eective date of the county lodging tax. The Department will also send a letter to all licensed lodging
permitholders within the adopting county to notify them of the eective date of the lodging tax or of any change
in the lodging tax.
Nebraska and Local Taxes on Lodging Information Guide, October 29, 2010, Page 8
RESOURCE LIST:
Nebraska Sales and Use Tax Regulations
v 1-012, Exemptions
v 1-072, United States Government and Federal Corporations
v 1-090, Nonprot Organizations
v 1-091, Religious Organizations
v 1-092, Educational Institutions
v 1-093, Governmental Units
v Nebraska Lodging Tax Regulations
Information Guides
v Nonprot Organizations
v Governmental Entities
www.revenue.ne.gov
(800) 742-7474 (toll free in Nebraska and Iowa), (402) 471-5729
Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818
