Cities could see temporary sales tax relief

Cities would have the option to delay refunding local option sales taxes to businesses seeking job credits under a bill advanced from general file Feb. 21.

Under LB209, introduced by Bellevue Sen. Abbie Cornett, cities could delay a job credits tax refund by one year. Cornett said the bill was designed to help with cash flow problems experienced by many communities.

“These refunds can cause undue hardship and budgeting issues,” Cornett said.

Any deductions for refunds also would be delayed by one year. Cities would receive notice from the state Department of Revenue of the impending deduction and the month it is to be withdrawn.

Ogallala Sen. Ken Schilz supported the bill, saying it would offer flexibility to cities recovering from the economic downturn.

“This gives communities an opportunity to take a breath,” Schilz said.

A Revenue Committee amendment that establishes an installment repayment option was adopted 40-0. The option would apply only to cities whose job credits refunds exceed 25 percent of total sales tax receipts.

Senators voted to advance the bill to select file on a 40-0 vote.