
Nebraska Restaurant Tax Guide
Prepared by Sales Tax Helper
Table of Contents
- Introduction
- General Rules
- Meals and Drinks
- Exempt Sales
- Alcoholic Beverages
- Tips & Gratuities Rules
- Employee Meals
- Complimentary Meals
- Taxable Purchases
- Food Delivery
- Delivered by Business Direct
- Third-Party Delivery (e.g., Uber Eats)
- Audit Considerations
- Voluntary Disclosure Agreements (VDAs)
- Tax Collected Is the State's Money
- Conclusion
- References & Resources
1. Introduction
For restaurant owners, cafes, food trucks, and cafeterias operating in Nebraska, the state's sales and use tax rules present unique challenges. Unlike retail businesses that primarily sell tangible goods, food service establishments must navigate complex tax rules regarding prepared foods, beverages, gratuities, and various service elements. Nebraska's tax treatment of restaurant operations depends on multiple factors, including the nature of the food (prepared vs. unprepared), the type of establishment, exemption qualifications, and service delivery methods.
Nebraska generally taxes prepared food and beverages at the state rate of 5.5%, plus applicable local sales taxes that can vary by location. With the rise of delivery services and marketplace facilitators, new complexities have emerged in determining which party is responsible for collecting and remitting sales tax. Restaurant owners must understand when to collect tax on mandatory service charges versus voluntary gratuities, how to handle employee meals, and when delivery charges trigger tax obligations.
Purpose of This Guide
This guide is designed to help food service businesses navigate Nebraska's sales and use tax rules related to restaurant operations. It focuses on:
- General Taxability Rules: Clarifying when prepared foods, beverages, and related
services are subject to Nebraska sales tax at the state rate of 5.5% plus applicable local
sales taxes. - Exemptions and Special Cases: Understanding which sales qualify for tax exemptions
and how to properly document them to withstand audit scrutiny. - Gratuities and Service Charges: Distinguishing between taxable mandatory service
charges and non-taxable voluntary tips, which has significant implications for both tax
compliance and employee compensation. - Operational Considerations: Managing tax obligations for employee meals,
complimentary items, and food delivery services in compliance with Nebraska
Department of Revenue regulations. - Audit Considerations: Identifying common tax audit triggers unique to the restaurant
industry and implementing best practices to minimize audit risk. - Voluntary Disclosure Agreements (VDAs): Explaining the process for restaurants to
rectify past noncompliance while mitigating penalties and limiting back-tax liability.
Why This Matters for Food Service Businesses
Nebraska's sales tax laws impact restaurants, cafes, food trucks, and cafeterias in multiple ways:
- Financial Impact: With Nebraska's 5.5% state sales tax plus local taxes that can reach up
to 3% in some jurisdictions, improper tax collection can significantly impact both a
restaurant's bottom line and customer pricing strategies. - Compliance Complexity: Determining what is taxable versus exempt can be
challenging, particularly with the various service elements in modern food service. For
example, a single transaction might include taxable food items, non-taxable gratuities,
and delivery fees with different tax treatments. - Audit Risk: Restaurants are frequent targets for sales tax audits due to their cash-
intensive nature and complex service structures. The Nebraska Department of Revenue
often scrutinizes gratuity practices, cash reporting, and exemption documentation. - Criminal Exposure: Failure to properly collect and remit sales tax can result in severe
penalties, including criminal charges for theft of state funds. Restaurant owners can be
held personally liable for unpaid sales tax, even if their business is structured as a
corporation or LLC.
This guide will walk through Nebraska's specific sales tax rules governing restaurant operations while referencing applicable statutes, administrative rules, and Nebraska Department of Revenue guidance. Throughout the guide, official Nebraska Department of Revenue sources will be linked for further reference, enabling restaurant owners to defend their tax positions with authoritative documentation.
By understanding these complex rules and implementing appropriate compliance measures,
restaurant owners can minimize tax liabilities, reduce audit exposure, and avoid costly penalties and interest.
You're currently viewing a preview. To access the full guide and unlock tools designed to simplify your sales tax obligations, just create a free account.
Your free Sales Tax Helper account gives you:
- Full access to this and other expert-written guides
- Our Nexus Checker to assess your exposure across states
- State- and industry-specific insights and compliance tips
- Updates on new rules and best practices to stay ahead
No credit card required — just expert tools built to keep you compliant and confident.
Create your free account now to unlock the rest of this guide.

Reviews
-
I can't say enough about Jerry and STH. We were in a bit of a panic re reaching nexus levels and dealing with reseller tax ...
- Mike L. -
My entire experience from intake to resolution with Sales Tax Helper was superior. '11' on a scale of 1-10! Initial meeting ...
- Tim N. -
I sincerely am grateful for the prompt, courteous, and helpful that has been offered me by Sales Tax Helper. My agent, Alex ...
- Carol M. -
When my business needed guidance with sales and use tax, I reached out to Sales Tax Helper through their website and received ...
- Pierce L. -
Jerry & Alex are excellent at what they do. They helped me navigate some very difficult and stressful situations. They’re ...
- Greg M. -
The team at Sales Tax Helper was excellent to work with. I had a complex business sales tax challenge that they methodically ...
- Mike M. -
Alex and Jerry always provide very accurate and prompt responses to my inquiries regarding the sales tax. They also bring ...
- Lukas P. -
Jerry is the best! I made the mistake thinking I could deal with the use tax auditor on my own not realizing that I would be ...
- Gary O.
