Occupation taxes would be restricted under bill

Occupation taxes levied by municipalities would be subject to a popular vote under a bill discussed in a Revenue Committee hearing Jan. 25.

Valentine Sen. Deb Fischer said she introduced LB745 to increase control and transparency of occupation taxes. The bill would require that any proposed occupation tax be subject to a vote of the people, have a specific purpose and indicate a sunset date.

Any change in the rate of a current occupation tax also would be subject to a vote. The bill would not eliminate occupation taxes currently in place.

“This is not a bill to restrict cities from raising revenue,” Fischer said. “It’s necessary to control the use of these taxes and provide citizens with a clear view.”

Richard Baier, executive vice-president of the Nebraska Chamber of Commerce, testified in support of the bill. He explained that further economic development depends on a favorable tax system.

“Whether we like it or not, Nebraska remains a high tax state,” Baier said. “We need people to know that Nebraska is open for new companies and new residents.”

Lynn Rex, executive director of the League of Nebraska Municipalities, said the provision requiring that each occupation tax be subject to a popular vote would cost more than any revenue gathered from the tax. She said the bill would place unfair restrictions on local governments.

“Relatively few occupation taxes are imposed for a specific purpose,” Rex said. “[The bill] would make it hard to raise revenue.”

The committee took no immediate action on the bill.

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