Bill restricting, capping telecommunications occupation taxes advances

Lawmakers gave first-round approval Feb. 28 to a bill that would cap telecommunications occupation taxes and restrict their application to telecommunications services.

As originally introduced by Valentine Sen. Deb Fischer, LB165 would have prohibited any municipality from imposing a new telecommunications occupation tax or increasing the rate of an existing tax without voter approval. The bill would have capped telecommunications occupation taxes at 6 percent beginning on Jan. 1, 2012, with the rate decreasing by 1 percent annually until its elimination on Dec. 1, 2017.

The bill also would have prohibited the application of telecommunications occupation taxes to total receipts for the purpose of sales tax computation.

A Revenue Committee amendment, adopted 42-0, replaced the bill. The amendment would restrict telecommunications occupation taxes to telecommunications services and cap the tax rate at 6.25 percent, unless city voters approve a 0.25 percent increase.

Cornett offered an amendment to the committee amendment to delay the bill’s implementation until Jan. 1, 2013. She said the amendment would give Lincoln time to complete the current budget cycle and prepare for a loss of revenue.

The city of Lincoln currently employs an occupation tax on telecommunications services and equipment.

Cornett’s amendment was adopted 42-0 and LB165 advanced from general file 44-0.