Nebraska Utility Sales Tax Exemption
Nebraska provides a full sales and use tax exemption on electricity, natural gas, coal, fuel oil, diesel, propane, or other fuels when more than 50% of the utility is used directly in qualified production activities such as manufacturing, processing, refining, irrigation (including grain drying), or farming, including operations by hospitals. If usage exceeds the 50% threshold for an individual meter, the entire electricity or fuel bill on that meter becomes exempt.
Utility Study
A detailed utility usage study is required to substantiate the exemption. The study must:
- Identify every meter and all equipment consuming utility (production vs. non-production)
- Document total annual consumption per meter
- Classify use as exempt (production-related) or non-exempt (office, HVAC, lighting)
Calculate the exempt usage percentage for each meter
If more than 50% of usage at a specific meter is directly tied to production, the entire billing for that meter qualifies for exemption. Otherwise, no partial exemption is allowed under that meter.
Filing Requirements
To claim the exemption, businesses must provide complete and submit Nebraska Form 13E (Energy Source Exempt Sale Certificate) to the vendor or utility provider for each applicable meter. If sales tax was paid on qualifying utility usage before the exemption certificate was filed, businesses may request a refund for up to three years using the same form. Maintaining comprehensive records—including utility bills, usage studies, and exemption certificates—is essential to support exemption claims and refund requests.