Allocation of Internet sales tax advanced

Senators gave first-round approval May 14 to a bill that would allocate tax revenue derived from Internet transactions.

Federal legislation to authorize states to collect sales tax on all Internet transactions is currently pending. LB200, introduced by Hyannis Sen. Al Davis, would allocate the first year of sales tax revenue on such transactions to the state’s Property Tax Credit Cash Fund upon approval of the federal legislation.

Davis said customers can be found shopping on their smartphones while in retail stores to compare prices on items. Physical stores have a hard time competing with online retail websites that do not charge sales taxes on purchases, he said.

Under a Revenue Committee amendment, adopted 34-0, the provisions of the bill would terminate three years after implementation.

Sen. Galen Hadley of Kearney spoke in favor of the bill. He said he hand-delivered resolutions encouraging Congress to charge sales tax for online purchases. Legislation to implement the tax has passed the Senate, but is stalled in the House of Representatives, he said.

Senators advanced the bill to select file on a 37-0 vote.