Nebraska § 77-2701.34 - Sale for resale, defined.

§ 77-2701.34. Sale for resale, defined.

Sale for resale means a sale of property or provision of a service to any purchaser who is purchasing such property or service 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 or service. A sale for resale includes (1) a sale of building materials to a contractor or repairperson electing to be taxed as a retailer under subdivision (1) of section 77-2701.10 or a sale of building materials to a contractor or repairperson being taxed as the consumer of building materials and electing a tax-free inventory under subdivision (3) of section 77-2701.10, (2) a sale of property to a purchaser for the sole purpose of that purchaser renting or leasing such property to another person, with rent or lease payments set at a fair market value, (3) film rentals for use in a place where an admission is charged that is subject to tax under the Nebraska Revenue Act of 1967 but not if incidental to the renting or leasing of real estate, or (4) a sale of digital products, community antenna television services, Internet services, and satellite services to a person who receives by contract the product or service transferred electronically for further broadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution, or exhibition of the product or service for use in a place where an admission is charged that is subject to sales tax under the Nebraska Revenue Act of 1967.

When determining whether property is being leased in the normal course of a taxpayer's business, a court may consider factors including, but not limited to, whether the leases are entered into with consumers who are related to or associated with the taxpayer, whether the terms of the leases and the parties' subsequent conduct reflect an arm's-length business transaction, whether the leases produced reasonable revenue for the taxpayer's business in relation to operating expenses, and whether the taxpayer held itself out to the public as being in the business of leasing the property. Big Blue Express v. Nebraska Dept. of Rev., 309 Neb. 838, 962 N.W.2d 528 (2021).

A contractor who provided thermal paper and play slips to the Nebraska Lottery as one element of a contract to provide the Nebraska Lottery with a comprehensive on-line lottery gaming system was not purchasing the items for resale to the Nebraska Lottery; thus, the items were not exempt from consumer's use tax. Intralot, Inc. v. Nebraska Dept. of Rev., 276 Neb. 708, 757 N.W.2d 182 (2008).

A sale of intangible property does not constitute sale for resale of the product. May Broadcasting Co. v. Boehm, 241 Neb. 660, 490 N.W.2d 203 (1992).

The burden is on the party seeking an exemption to establish that it is entitled to an exemption. Nucor Steel v. Balka, 2 Neb. App 138, 507 N.W.2d 499 (1993).