Opinion ID: 1946805
Heading Depth: 1
Heading Rank: 6

Heading: nebraska sales and use tax

Text: The Nebraska sales and use tax imposes a tax on each item of tangible personal property in this state at some point in the chain of commerce, unless specifically excluded from taxation. [5] As stated in the Tax Commissioner's order, the sales and use tax laws are complementary in that . . . the use tax is to protect the state's revenues and the business of local merchants by eliminating any advantage to residents in purchasing goods from out of state without the payment of the tax. If the item is purchased in Nebraska, the sales tax applies. If the item is purchased outside Nebraska, the use tax applies. [6] Together, the sales and use taxes provide a uniform tax upon the sale, lease, rental, use, storage, distribution, or other consumption of all tangible personal property. [7] Intralot claims that its purchases of thermal paper and play slips are exempt from taxation because it resells the items to the Lottery. If Intralot purchases the items for resale to the Lottery, Intralot would not have to pay sales or use tax on the items because purchases made for reselling the items in the normal course of business are not subject to sales and use tax. [8] Furthermore, the Lottery would also not pay a sales tax when it purchases the items from Intralot because items purchased by the state are exempt from taxation. [9] Thus, if Intralot correctly contends that its purchases of thermal paper and play slips are purchases for resale to the Lottery, then the items are not subject to sales and use tax. Intralot's position hinges upon purchases made for the purpose of reselling the items, i.e., sales for resale, are explicitly exempt from sales and use tax. [10] Sale for resale includes a sale of property ... to any purchaser who is purchasing such property ... for the purpose of reselling it in the normal course of his or her business, either in the form or condition in which it is purchased or as an attachment to or integral part of other property. [11] The burden rests on Intralot to establish that its purchases of ticket stock and play slips were purchases for resale to the Lottery. If Intralot cannot establish that it purchased the thermal paper and play slips for resale to the Lottery, then the items are subject to a consumer's use tax. [12] As stated in the Department's rules and regulations, [i]t is presumed that any property ... sold ... in this state is sold ... for storage, use, distribution, or other consumption in this state until the contrary is established. The burden of proving that any property ... delivered in this state is delivered for a purpose other than storage, use, distribution, or other consumption in this state is on the person who purchases ... the property.... [13] Whether a resale to the Lottery occurred requires an examination of the relationship between the Lottery and Intralot.