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My priority bill, LB 44, received initial approval from the Legislature this past week. LB 44 seeks to collect sales tax on Nebraska purchases from out-state online retailers. This is not a new tax, as Nebraska law requires that if sales tax is not collected by the seller on any taxable sale, the purchaser must remit the use tax directly to the state. There is a line on the Nebraska Individual Income Tax Return for individuals to report their use tax due on Internet purchases. However, few Nebraskans comply.
Fifty years ago, the U.S. Supreme Court ruled that states could not require that sales tax be collected on mail-order sales shipped into a state because the diverse state and local sales tax systems among the states would make collecting sales taxes an undue burden on out-of-state retailers. This decision was upheld in 1992, 25 years ago, when the internet was in its infancy. Times have significantly changed since then. States have responded by adopting a comprehensive interstate system to streamline and harmonize their maze of sales tax rules and requirements. This tax loophole, which places main street businesses at a distinct disadvantage, is now costing states $17.2 billion in lost sales tax annually. The injustice prompted a United States Supreme Court Judge to note that these rulings have resulted in a startling revenue shortfall in many states, creating unfairness to local retailers. State’s education systems, healthcare services and infrastructure are weakened as a result. Justice Kennedy concluded that it was unwise to delay any longer a reconsideration of the court’s ruling.
Under LB 44, online retailers meeting a certain threshold for sales volume will either have to collect the sales tax or abide by the reporting requirements, including notifying purchasers that the sales tax is due and submitting information to the Nebraska Department of Revenue showing the total amount paid in the previous year by each purchaser. LB 44 combines the “collecting” law from South Dakota, which was introduced as a means to get the U.S. Supreme Court to reexamine their earlier ruling, and the “reporting” law from Colorado, which was affirmed by the U.S. Court of Appeals for the Tenth Circuit.
I believe that LB 44 avoids the constitutionality issue, as it does not require remote sellers to collect the sales tax, instead giving them a choice of following the reporting requirements. However, the Governor believes otherwise and is actively working against the bill, indicating that he will veto it if passed. I want to stand in support of all businesses in Nebraska. LB 44 needs to pass to create a fair environment for our small businesses.
LB 68 proposes to give the Nebraska Legislature the sole authority to regulate the ownership, possession, transportation, carrying, registration, transfer, and storage of firearms, ammunition, and firearms accessories. Local authorities would retain the authority to regulate the discharge of firearms and to provide for appropriate zoning designations. LB 68 would ensure consistent, statewide uniformity of laws for firearm owners. Currently, there is a patchwork of laws in our state, making it confusing for law-abiding gun owners as they travel across the state. Although LB 68 was filibustered by opponents, a motion for cloture to cut off debate and allow for a vote on the advancement of the bill was successful, receiving the necessary 33 votes. After the cloture vote, LB 68 received first-round approval from the Legislature on a 32-12 vote. I am a co-sponsor of LB 68.
LR 6 is a legislative resolution that applies to Congress, under the provisions of Article V of the U.S. Constitution, to call a convention of the states limited to proposing amendments to impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and for members of Congress. So far, 10 of the necessary 34 states have endorsed similar resolutions. Any amendments proposed by such a convention would need to be ratified by at least three-fourths of the states.
LR 6 was debated by the Legislature for 3 hours. Proponents feel that it is necessary to limit the power of the federal government. Opponents note that the convention would not be limited to the items listed. It appears that Senator Ebke, the sponsor of the bill, will have to prove that she has the necessary 33 votes for cloture before the resolution is placed on the agenda again. I have signed on as a co-sponsor of this resolution.
During the remaining 25 days of this legislative session, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
I introduced LB 547 before the Natural Resources Committee this past week. This bill is an extension of legislation that was passed last year, in which we removed a public power district’s authority to use eminent domain to take over renewable electricity generation projects. LB 547 would remove a public power district’s authority to use eminent domain over all types of privately owned and operated electricity generation and transmission projects. The legislation does not alter a public power district’s current authority to build its own generation and transmission.
I introduced this bill for economic development reasons. I believe economic development is very important in our state’s welfare. It seems counter-productive that private capital must look outside our state for electricity generation projects, thereby preventing our state from benefitting from the increased jobs, increased property tax revenue, and increased income taxes.
The argument is that Nebraska already has an excess of electricity. However, since our state has joined the Southwest Power Pool (SPP), it is now the SPP that collects all the generation in its 14-state territory, deciding how much generation its transmission system can handle and dispatching the lowest-priced energy first. The SPP has 45,000 megawatts of pending generation interconnection requests – which is about 6 times more than the 7,000 megawatts of generation that our entire state has right now. If other states don’t have eminent domain authority, those states will appear more business-friendly to private companies. Since SPP operates an integrated market, any new generation will compete with Nebraska’s public power system – whether it is within or outside of our state. If the new generation is going to happen anyway, I feel that it is in Nebraska’s best interest to promote economic development within our state.
My intent is not to harm our current public power system, as it has worked well in the past, but to plan for the future. The environment has changed since Nebraska joined the SPP. Consequently, we must work together on what is best for Nebraska ratepayers. I am looking forward to working with the industry in the partnership of the Legislature and public power.
The public hearings were held on LB 312 and LB 313 this week before the Revenue Committee. These bills were backed by the Nebraska Ag Leaders Working Group, which is composed of the Nebraska Farm Bureau, Nebraska Cattlemen, Nebraska Pork Producers Association, Nebraska Corn Growers Association, Nebraska Soybean Association, and Nebraska State Dairy Association.
These organizations look at the bills as a way to better balance the three-legged stool, symbolizing the three sources of revenue to fund government services, by increasing revenue from the sales tax and using it to decrease the reliance on property taxes.
LB 312 would impose sales tax on additional services, such as the repair or maintenance of motor vehicles, pet related services, lawn care, and personal care services (hair care, massage, nail and spa services). The legislation would also remove the sales tax exemption on such things as school lunches, admissions to school events, soda pop, candy, and lottery tickets. LB 313 would increase the state sales tax rate from 5.5% to 6.5%. In an effort to reduce the impact of the sales tax increase on the lower income, both bills would increase the earned income tax credit to 17% of the federal credit, with the remainder of the increased revenue dedicated for property tax relief. It is projected that both of the bills combined would generate more than $500 million annually for property tax relief.
Senators and committees have begun to select their priority bills, which will now be debated ahead of bills without priority status. I encourage you to contact me with your thoughts and opinions on legislation. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my email address is email@example.com.