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Nebraska Governor Steps Back from Tax Reform

  • Feb 18, 2013 | Gail Cole

 Nebraska: For Now, the Sun is Setting on Tax Reform.

Standing before the state Revenue Committee on February 6, 2013, Nebraska Governor Dave Heineman (R) testified in favor of LB 405, which would eliminate income taxes and expand the sales tax base. He spoke of the need for "a modern tax system to create more jobs and higher paying careers for our sons and daughters, our grandkids." This was the position he put forth during his State of the State address in January. Broadening the sales tax base was part of his plan.

A Step Back

Yet on February 16, 2013, the governor withdrew his support of LB 405 and the similar LB 406. He reportedly  asked lawmakers to "kill both proposals" during a phone conversation on Saturday with Senator Galen Hadley, chairman of the Revenue Committee. His reason? "[A]fter hearing concerns from lawmakers, farm groups and other Nebraska residents," he decided "the process was moving too quickly."

The governor also reportedly spoke Saturday of creating a "level playing field" -- a phrase that often surfaces during discussions about marketplace fairness and online sales tax. The Marketplace Fairness Act of 2013 was introduced to the Senate and the House on February 14, 2013 and has already garnered a great deal of public support. Nebraska has been a full member of Streamlined Sales Tax -- an organization working toward marketplace fairness -- since 2005.

As requested, LB 405 and 406 will be killed. For now, changes to Nebraska's sales tax and income tax are off the table.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.