Manufacturers and industrial processors with facilities located in Nebraska, may be eligible for a utility tax exemption. Nebraska offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by REG-1-089.01.

Exemption Language of REG-1-089.01

"The sale purchase, use, or other consumption of electricity, coal, gas… may be exempt from sales and use tax if more than 50% of the amount purchases is used or directly consumed in processing, manufacturing, refining generation of electricity, irrigation or farming."

Utility Study Requirement for Exemption Qualification

A Nebraska utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Nebraska Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 5.5%

Average Local Sales Tax Rate: 1.43%

Helpful Resources

Nebraska Utility Exemption Certificate: Energy Source Exemption Form 13E

Nebraska Utility Exemption Statute/Rule: REG-1-089.01

Nebraska Claim Form for Tax Refund: Claim for Refund Form 7