SALT Report 1647 – The Nebraska State Legislature recently passed legislation that allows municipalities that have a local option sales tax to inspect the sales tax returns of businesses that remit sales tax within the municipality. Nebraska Rev. Stat. § 77-2711(14) mandates that the following forms must be completed by the municipality and submitted to the Department if they wish to inspect a sales tax return or return information.
A municipality that has adopted a local sales tax may designate, in writing, an employee to inspect confidential sales tax return information for any taxpayer that holds a sales tax permit and remits sales taxes for locations within the requesting municipality.
Confidential Tax Information Agreement
The designated employee is required to complete a confidentiality training program and sign a Confidential Tax Information Agreement before a request to inspect a sales tax return or sales tax return information is granted.
Memorandum of Understanding
All municipalities must complete a Municipal Request for Sales Tax Return Information and Inspection Memorandum of Understanding prior to the inspection of records. The MOU details the conditions under which a municipality may inspect a sales tax return or return information and the Department’s responsibilities in providing this information.
The designated employee must also file Form 8796-AL prior to inspecting the sales tax return information of a taxpayer that holds a sales tax permit and remit sales taxes to the requesting municipality.
For Further Information: