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Sales Tax State Activity Update - October 2006

New Contractor Exemptions in Nebraska

Effective July 1, 2006, contractor labor charges are nontaxable when performed in connection with the following:

• The first or original construction of a new structure, building, or unit of a building;
• The addition to, or remodel, restoration, repair, or renovation of a residential dwelling(see definition below). This includes the addition of an entire room or floor to the dwelling, the completion of an unfinished portion of the dwelling, and repairs to a dwelling damaged by fire, flood, tornado, or other natural disaster;
• The construction, repair, or annexation of any structure used for the generation, transmission, or distribution of electricity; and
• The major addition to, or remodel, restoration, repair, or renovation of an existing building, unit of a building, or structure that costs at least 50% of the current value of the building, unit, or structure.

The full text may be accessed on the Official Nebraska Government Website.

(Nebraska Department of Revenue, Letter Ruling 1-06-07, August 8, 2006)

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