Sales and use tax measures approved

A bill containing several state sales and use tax proposals, including one that increases the amount businesses receive for collecting and remitting the tax, received final approval from lawmakers April 13.

The current collection fee for merchants — the amount 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, increases the fee to 3 percent of the first $5,000 remitted each month, or $150, beginning Oct. 1, 2022.

The bill also includes the provisions of LB881, introduced by Sen. Terrell McKinney of Omaha, that exempt feminine hygiene products from state sales and use tax and require detention facilities to supply them to female prisoners free of charge.

Also included are provisions of LB941, introduced by Sterling Sen. Julie Slama, which prohibit imposition of state sales and use tax 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.

The Legislative Fiscal Office estimates that LB984 will reduce general fund revenue by $6.4 million in fiscal year 2022-23, $9.8 million in FY2023-24 and $10 million in FY2024-25.

The bill passed on a vote of 45-0.