Arena turnback taxes expanded

Senators passed a bill April 13 that extends the range from which cities collect state sales taxes from hotels and businesses near sports arenas and convention centers.

Under current state law, 70 percent of state sales taxes generated by new and existing hotels near a convention center are turned back to the city to help pay for the new facility. Cities that build arenas receive 70 percent of state sales taxes generated by nearby retailers. The remaining 30 percent is directed to a fund that provides development grants to smaller communities across the state.

Omaha and Lincoln currently receive turnback taxes from hotels within 200 yards and 450 yards, respectively, of any convention center or arena.

Introduced by Sen. Jim Scheer of Norfolk, LB884 extends turnback tax provisions to any publicly or privately owned hotel located within 600 yards of an eligible facility, to be measured from any point on the exterior perimeter of a facility.

The bill also extends to 48 months the period during which taxes are turned back to political subdivisions to pay for sports arena facilities and allows Lincoln to use 10 percent of its turnback taxes to pay for low-income housing projects.

The proposal allows cities to use the turnback tax to pay for capital improvements on the facilities, in addition to paying off the principal and interest on bonds used to pay for construction.

LB884 passed 43-4.