Excise Tax
For anyone who would like to sell beer in Nebraska via wholesaler, please see the Beer Brands page for more information. The online beer brands form for shippers to submit products for approval is live as of October 3, 2018.
INFORMATIONAL REPORTS
The Nebraska Liquor Control Commission collects excise taxes for alcohol at three points:
- Beer shipped into Nebraska is taxed when it is received by the licensed beer wholesaler
- Spirits, Ready-To-Drink Cocktails, and Wines shipped into Nebraska are taxed when they are sold by the licensed spirit and wine wholesaler
- Beer, Spirits, Ready-To-Drink Cocktails, and Nebraska Farm Wines produced by Nebraska manufacturers, craft breweries, microdistilleries, and farm wineries are taxed when they are sold in their respective tap rooms, to retailers, or to licensed Nebraska wholesalers.
The excise tax rates for those products are $0.06 per gallon for Nebraska Farm Wines, $0.31 per gallon for beer and hard cider under 8.5% ABV, $0.95 per gallon for Wine and spirit based Ready-To-Drink Cocktails under 12.5% ABV, and $3.75 per gallon for Distilled Spirits.
Excise Tax Paying Entities:
The Nebraska Liquor Control Commission collects excise taxes from the following entities, these entities must report and pay any applicable excise taxes by the 25th of each month for the sales made in the preceding month.
Beer Wholesalers (Class W) licenses import beer from licensed shippers located outside of the state of Nebraska and pay the excise tax when they receive the product. These entities are permitted to sell beer to retail licenses in the State of Nebraska, other Nebraska Wholesalers, and to ship beer outside of the state. These entities also purchase beer from licensed Nebraska craft breweries and distribute their products throughout the territory that the wholesaler operates in.
Spirit and Wine Wholesale (Class X) licenses import spirits, wines, and ready-to-drink cocktails from licensed shippers located outside the state of Nebraska and pay the excise tax when they sell the product. These entities are permitted to sell these products to retail licenses in the State of Nebraska, other Nebraska Wholesaler, and to ship these products outside the state. These entities also purchase spirits, wines, and ready-to-drink cocktails from licensed Nebraska microdistilleries and farm wineries.
Nebraska Craft Brewery (Class L) licenses produce beer on their licensed premises and are limited to 20,000 barrels per year or less of production. These entities are permitted to sell up to 250 barrels of beer directly to licensed retailers per year in areas where they do not have a territory agreement with a beer wholesaler. They are also permitted to sell beer for consumption on their licensed premises directly to consumers as well as packaged beer to go. They may also contract with beer wholesalers throughout the state, or outside of the state, for the sale of beer in their territories. Craft breweries may have up to 8 separate locations for taprooms.
Nebraska Microdistillery (Class Z) licenses produce distilled spirits and ready-to-drink cocktails on their licensed premise and are limited to 100,000 gallons of per year or less of production. These entities are permitted to sell up to 3,500 gallons of product directly to licensed retailers per year. They are also permitted to sell product for consumption on their licensed premises directly to consumers as well as packaged beer to go. They may also contract with spirit and wine wholesalers throughout the state, or outside of the state, for the sale of product. Microdistilleries may have up to 8 separate locations for taprooms.
Nebraska Manufacturer of Spirits, Manufacturer of Wines, Manufacturer of Beer (Classes VS, VW, V1-7) are licenses who produce products in excess of the gallonage limits imposed on craft breweries, farm wineries, and microdistilleries. Manufacturers of wine and spirits shall sell only to wholesalers located inside and outside the state of Nebraska, as well as contract manufacture for other licensees. Manufacturers of beer may sell beer on the licensed premise, and if they already held satellite locations may continue to operate them. These license types report monthly by the 25th of each month.
Additionally, there are two license types that report annually for tax payment:
Nebraska Farm Winery (Class Y) licenses produce wines composed of a minimum of 60% grapes grown in the state of Nebraska. They have a special excise tax rate of 6 cents per gallon and report annually by January 25 of each year unless they have a yearly tax payment greater than $1,000 when they are changed to a monthly reporting cycle. Farm wineries may produce up to 50,000 gallons of wine annually, and may sell directly to retailers if their annual production does not exceed 30,000 gallons, after which they must sell to wholesalers. A farm winery may operate a tasting room for sales on the premise as well as off-premise directly to consumers. Licensees may ship to wholesalers and consumers out-of-state provided they follow destination laws. A farm winery may have up to four branch outlets.
Direct Shipping (Class S1 and S1R) licenses are manufacturers and retailers who are licensed to ship directly to Nebraska consumers. They may ship up to 108 liters annually of any combination beer, wine, spirits, and ready-to-drink cocktails using common carriers directly to consumers. They pay the respective excise taxes on an annual report submitted by January 25 of each year following the operating calendar year.
Nebraska has three license types that report to the commission but pay no tax:
Beer Shipper (Class T) licenses are licensed to ship beer into the state of Nebraska to licensed beer wholesalers. These licenses report all shipments for the previous month to the Liquor Control Commission by the 25th of each month.
Spirit and Wine Shipper (Class S) licenses are licensed to ship wine, spirits, and ready-to-drink cocktails into the state of Nebraska to licensed spirit and wine wholesalers. These licenses report all shipments for the previous month to the Liquor Control Commission by the 25th of each month.
Nonbeverage User (Class N1, N2, N3, N4, N5) licenses are permitted to purchase beverage grade alcohol from manufacturers and wholesalers without the payment of excise taxes for medical, industrial, and food purposes. Class 1 licenses shall not exceed 100 gallons of alcohol per year, Class 2 shall not exceed 1,000 gallons of alcohol per year, Class 3 shall not exceed 5,000 gallons per year, Class 4 shall not exceed 10,000 gallons per year, and Class 5 are all licensees who utilize more than 10,000 gallons per year in their facilities. These licenses report all purchases of beverage grade alcohol to the Liquor Control Commission by the 25th of each month.
Statutory References: 53-123 and sub chapters, 53-160, 53-162, 164.01