Nebraska Sales Tax for Contractors (2026): Option 1, 2 or 3
How Nebraska's contractor Options 1, 2 and 3 decide who pays sales tax on a home remodel, and three jobs worked at 5.5%.
Not tax advice. General information from each state's revenue department, checked Oct 29, 2026. Rates shown are the state rate; city and county tax is extra where it applies. The facts of your job and contract can change the answer; for a specific job, ask a tax professional in your state.
The rule in Nebraska
Whole job taxed
By default (Option 1) you're a retailer and collect tax on the full lump-sum price unless labor is stated separately. Elect Option 2 or 3 and you pay tax on materials and collect none.
5.5%
5.5% plus local
Itemizing or time and materials
Option 1 with labor stated separately: tax on materials only.
Option election at registration
Source: Neb. Admin. Code 316-1-017 (Regulation copy)
“the contractor will be treated as a retailer under Option 1”
Three jobs, worked
| Job | Customer | You pay |
|---|---|---|
| Bathroom $12,000 job, $5,000 materials | $660 | $0 |
| Kitchen $40,000 job, $15,000 materials | $2,200 | $0 |
| Addition $90,000 job, $35,000 materials | $4,950 | $0 |
On the kitchen: 5.5% on the full $40,000, labor included. That's Option 1, the default. Elect Option 2 or 3 and you pay $825 on materials and collect none.
Also check
- You choose Option 1, 2 or 3 when you register, and you can change it later. Options 2 and 3 keep sales tax off the invoice.
Nebraska sales tax questions
Do contractors charge sales tax in Nebraska?
By default, yes. An Option 1 contractor collects tax on the full lump-sum price unless labor is stated separately. Option 2 and 3 contractors pay tax on materials and charge none.
What rate applies to a remodel in Nebraska?
5.5% plus local.
Do contractors pay tax on materials in Nebraska?
Option 1 contractors buy materials for resale with Form 13 and tax the customer. Option 2 and 3 contractors pay tax on materials and charge none.
Compare other states
How we checked
We read each state's sales tax rule for construction contractors on the revenue department or legislature site, and its 2026 state rate. Two independent research passes covered all 50 states and DC, and a third reviewer checked the result. Where a state's own page would not load, the row names the copy we read. Last checked .
This guide explains the general rule for remodeling an owner-occupied home. It is not tax advice.