Senator Tom Brewer
43rd District
06-22-2018

Yesterday, the US Supreme Court ruled it was okay for States to collect sales tax from internet sales. I have mixed feelings about this.

To start with, I strongly believe that we are all much better off as a society when the money earned by the people who get out of bed every day and go work for it are able to keep it. After all, it belongs to them. They earned it. The essential expression of liberty is private property rights, and there is no better example of private property than the money people earn when they work. I think individual citizens are much better at deciding how to spend it than the government is.

Yes, I know we need government services and those cost money, so to a degree, taxation is the dues people pay for the privilege of living in a civilized society. I understand this. That said, government creates zero wealth. It has no money it didn’t first take from someone who had to earn it. I therefore believe the bias should always tilt in favor of the person who earned the money in the first place.

There have been bills in the last two sessions that would have applied the Nebraska Sales Tax to on-line sales. They were shelved because the opposition argued we needed to wait for this Supreme Court decision before we passed such a law. The wait is over. The court gave the States a green light to apply sales tax to things you buy on the internet, and you can bet the States will waste no time doing it. I’ve already been asked if I thought there would be a special session so we could hurry up and pass the law needed to do this. I do not share other’s enthusiasm to do this.

The only aspect of this idea I agree with is rooted in “fairness.” Our main street brick-and-mortar businesses in Nebraska are struggling. They are forced to collect sales tax and operate at a huge disadvantage to their internet competitors because they don’t have to. It levels the playing field. In that narrow context, I agree with the idea in principal. In practice however, let me state for the record:

Any bill that applies Nebraska sales tax to internet purchases must direct 100% of the new revenue raised by the measure to just property tax relief. I will vote against any bill that doesn’t, and it’s my sincere hope the Governor would veto it if it managed to pass. The $30-40 million in new revenue this is likely to create must not be treated like a windfall by the legislature.

The agriculture producers in our State are being crushed. $1 in $4 dollars in Nebraska’s economy comes from agriculture, yet we have the highest agriculture property taxes in the country and the commodity prices today are the worst they’ve been in decades. Take just the month of June for example. Since the beginning of the month, Nebraska cash corn prices are down roughly 11% and cash soybean prices are down 14%. Wheat and sorghum prices have also dropped. It’s not like prices were great to begin the month. Several factors are pushing prices lower. Ongoing trade tensions with our largest trading partners, but also good growing conditions and an increase in the value of the dollar are also pressuring prices.

To put the drop in prices in context in terms of what it means for Nebraska farmers and Nebraska’s economy, the drop in corn and soybean prices since the beginning of the month has resulted in just over $1 billion in potential lost receipts to corn and soybean producers based on 2017 production ($589 million-corn receipts; $437 million-soybean receipts). These two crops combined typically account for 90% of the state’s total crop receipts which makes them major drivers in determining net farm income for the state. This represents a loss of farm income to something close to $60 million for Nebraska in just the month of June.

Cattle prices have fared a little better. They haven’t crashed in June like crop prices have. They are lower for the year compared to last year at this time, but they have stabilized a bit in recent weeks. Hopefully some of the pressures in the other commodity markets in recent weeks will not bleed over into the cattle market.

Regardless, it is unconscionable to think of spending new sales tax revenue on anything other than reducing property taxes, most especially for the agriculture sector. Property taxes are the only tax people have to pay that has no regard for their ability to pay it. As it stands today, our Ag producers can’t even cover the cost of producing a crop, let alone pay the property tax bill.

Please contact my office with any comments, questions or concerns. Email me at; tbrewer@leg.ne.gov. Mail a letter to; Sen. Tom Brewer, Room #1202, P.O. Box 94604, Lincoln, NE 68509 or call us at (402) 471-2628.