- Lawmakers in Nebraska’s unicameral legislature are debating a proposal to increase the state’s sales tax by 1 percent.
- Among the bill’s provisions are new taxes on candy and soda and a 100% tax on hemp and CBD products.
- A vote is expected on Tuesday on whether to advance the bill to the second of three readings.
Nebraska lawmakers are considering a bill that would raise the state’s sales tax by 1 cent on every taxable expense to 6.5%. This makes it the highest amount in the state.
Lawmakers are scheduled to vote later Tuesday on whether to advance the bill to the second of three readings in Nebraska’s unique unicameral legislature. In addition to increasing the state’s current 5.5% sales tax and expanding it to cover more services such as advertising costs, it would add new taxes on candy and soda pop and tax hemp and CBD products 100%. I plan to.
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However, the bill would also reduce the consumption tax currently added to utility bills, a proposal made to address complaints that consumption tax increases disproportionately affect low-income people.
Supporters of the bill pushed back, pointing out that groceries would still be exempt from sales tax in Nebraska. Omaha State Sen. Lou Ann Linehan said the bill targets higher-income residents with more disposable income, not people living in poverty.
FILE – Nebraska State Sen. Lou Ann Linehan (D-Elkhorn) speaks in Lincoln, Nebraska, August 5, 2020 Nebraska lawmakers are raising the state’s sales tax by 1 cent on every taxable dollar. A bill to set the rate at 6.5% is being debated. It would be among the best in the country. Linehan said the bill is aimed at higher-income residents with more disposable income, rather than people living in poverty. (AP Photo/Nati Halnik, File)
“Are you spending too much money on handbags?” Linehan asked people who were struggling to make ends meet. “Would you spend $200 on a new pair of shoes? This bill affects people who have the money to spend on those shoes.”
Linehan has struggled to get enough votes to push his bill forward. His critics include both left-wing lawmakers who argue that sales taxes inherently increase the burden on low-income people and far-right conservative lawmakers who oppose any tax increases.
“On average, 5% of Nebraskans with incomes above $252,600 will pay less due to this change, but for 8 in 10 Nebraskans, the sales tax increase , which would be greater than the property tax cuts they would receive,” the watchdog group Open Skies Policy Institute said.
The bill is key to Republican Gov. Jim Pillen’s plan to raise property taxes, which peak at $5.3 billion in 2023 as home prices soar in recent years. Because local appraisers are required to appraise residential properties at approximately 100% of market value, some people, especially seniors on fixed incomes, are unable to afford to pay the taxes and therefore own their properties for many years. The houses that they have been buying are being sold at high prices. Piren said.
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This year’s parliament is scheduled to adjourn by April 18th. Pillen previously promised to recall lawmakers to a special legislative session if the property tax relief package was not passed.
