Change to sales and use tax collection fee, other measures advanced

Lawmakers gave first-round approval April 7 to a bill that would increase the amount businesses receive for collecting and remitting state sales and use tax after amending it to include other sales tax measures considered by the Revenue Committee this session.

The current collection fee for merchants — the amount that they are allowed to retain when remitting the taxes — is equal to 2.5 percent of the first $3,000, or $75, in sales or use tax collected each month.

LB984, introduced by Columbus Sen. Mike Moser, would increase the fee to 2.5 percent of the first $6,000, or $150, remitted each month, beginning Oct. 1, 2022.

He said the change would help small businesses offset rising credit and debit card transaction costs.

A committee amendment, adopted 41-0, would increase the fee to 3 percent of the first $5,000 remitted each month, or the same total amount as the original bill.

The amendment also includes the provisions of LB881, introduced by Sen. Terrell McKinney of Omaha.

They would exempt feminine hygiene products — tampons, panty liners, menstrual cups, sanitary napkins and other tangible personal property designed for feminine hygiene in connection with the human menstrual cycle — from state sales and use tax.

McKinney’s proposal also would require detention facilities to supply needed feminine hygiene products to female prisoners free of charge.

Also included are the provisions of LB941, introduced by Sterling Sen. Julie Slama.

Under her proposal, state sales and use tax could not be imposed on the gross receipts from the sale, lease or rental of net wrap — plastic wrap used in the baling of hay — purchased for use in commercial agriculture.

Finally, the amendment includes the provisions of LB1209, introduced by Sen. Lou Ann Linehan of Elkhorn.

She said the proposal would allow manufacturers, which are exempt from paying sales and use tax on qualified machinery and equipment, to appoint a contractor as a purchasing agent so that the contractor can purchase those items on behalf of the manufacturer free of sales and use tax.

After adopting a technical amendment, senators voted 42-0 to advance LB984 to select file.