Lawmakers in GOP-led Nebraska debate bill to raise sales tax

LINCOLN, Neb. (AP) — Nebraska lawmakers are debating a bill that would raise the state’s sales tax by 1 cent to 6.5% on every taxable dollar spent — which would make it among the highest in the country.

Lawmakers expected to take a vote later Tuesday on whether to advance the bill to a second of three rounds of debate in Nebraska’s unique one-chamber legislature. In addition to raising the state’s current 5.5% sales tax and expanding it to include more services — such as advertising costs — it would add new taxes to candy and soda pop and would tax hemp and CBD products at 100%.

But the bill would also cut sales tax currently added to utility bills — a proposal made to address complaints that a sales tax increase would disproportionately affect lower income people.

Supporters of the bill pushed back on that argument, noting that grocery food items would still be exempt from sales tax in Nebraska. The bill is aimed at higher income residents with more disposable income, not those living in poverty, said Omaha Sen. Lou Ann Linehan.

For those struggling to get by, “are you spending a lot of money on handbags,” Linehan asked. “Are you spending $200 on new shoes? This bill affects people who have money to spend on those things.”

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