Push to collect online sales tax in Nebraska advances

A bill that would require Nebraska to enforce online sales tax for out-of-state retailers is going into its final reading in the legislature. (MGN Online)

A bill that would require Nebraska to enforce online sales tax for out-of-state retailers is going into its final reading in the legislature.

Currently, most of Nebraskans do not pay any sales tax for items in their digital shopping cart. However, that free ride may soon be coming to an end.

"The average online shopper already owes the tax, they are required by state law to pay the tax," said Nebraska state senator Dan Watermeier, representing District 1.

Senator Watermeier said sales tax for online purchases isn't anything new, but instead legislative bill 44 aims to close a loophole for out of state businesses.

"The underlying misunderstanding and lack of education from the public is that because they're not collecting it, I must not owe it. Those two things are disconnected. You owe the tax as soon as you buy it," Watermeier said.

The senator said he wants to make the playing field fair for in state businesses.

If passed, LB44 would require online retailers who do not have a physical presence in Nebraska to either collect sales tax and pay that to the state, or tell customers how much taxes they owe.

Exempt from all of this would be businesses that do less than $100,000 in sales, in Nebraska. Governor Pete Ricketts issues the following statement, after the bill advanced in the legislature this week:

“Tax policy in the Legislature should be driven by a desire to enact sound laws which will pass constitutional muster. LB 44 as advanced by the Legislature remains flawed and contains burdensome regulation and unnecessary red tape on companies doing business in Nebraska. We should be cutting red tape, not creating more of it.”

Janell Anderson Ehrke is the CEO of GROW Nebraska, and gives hundreds of Nebraska entrepreneurs an opportunity to market and sell their products in store and online.

"I think it's a good thing that we're looking at, I'm just not exactly sure that the current legislation that is being proposed answers it all," she said. "My thought is most people are expecting to pay sales tax, we just need to figure out how we can do that without a lot of red tape and not inhibit people from doing business in Nebraska."

Senator Watermeier says the U.S. Government Accountability Office estimates online tax would bring in $94 million in revenue for Nebraska, but it's not clear how much of that is being collected at this time.

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