News
Cigarettes in cross hairs for higher taxes; pop next target
Wednesday, January 23, 2013
Omaha.com (Omaha World-Herald)
A pair of newly introduced bills would force Omaha to drop its occupation tax on tobacco while raising state taxes on cigarettes.
A third bill would end the sales tax exemption for pop and other soft drinks.
Those were among several pieces of legislation offered Tuesday by state lawmakers that would affect the taxes Nebraskans pay.
The biggest tax measures of the day were those introduced to carry out Gov. Dave Heineman's major tax reform plan.
But other bills would change taxes in smaller ways.
State Sen. Bob Krist of Omaha followed through on his promise to seek stricter limits on city occupation taxes.
He made the promise after the City Council approved a 3 percent occupation tax on cigarettes to generate $35 million for the University of Nebraska Medical Center's new cancer center.
The tax, which took effect this month, adds some 15 cents to the average price of about $5.10 for a pack of cigarettes.
Legislative Bill 474 would bar Omaha and other cities from charging occupation taxes on tobacco and would limit occupation taxes on alcohol.
Occupation taxes also would be barred if they are based on the gross receipts or sales volume of a business.
The bill would prohibit cities from giving occupation tax revenue to other government entities, as Omaha plans to do with the university.
Krist said he has concerns that Omaha and other communities have stretched the definition of occupation taxes in trying to find new revenue sources.
“We've got to get our taxes under control, and this isn't helping,” he said.
The new restrictions would require Omaha to end its tobacco occupation tax but would not apply to any taxes in place before July 19, 2012.
LB 439, meanwhile, would boost the state tax on cigarettes to $1.36 per pack, up from 64 cents currently.
The bill was introduced by Sens. Mike Gloor of Grand Island and Kathy Campbell of Lincoln.
The measure includes legislative findings that, for each $5 pack of cigarettes sold in Nebraska, residents pay $9.64 to subsidize health care costs related to smoking.
The findings also state that price increases are the most effective way to reduce smoking, especially among youths.
Part of the proceeds would support a new program giving income tax credits to volunteer emergency responders, rescue squad members and firefighters.
The rest would go to fight tobacco use, increase payment rates for health care and human services providers, boost the state general fund and add to a fund that supports various health needs.
LB 447, introduced by Sen. Bill Avery of Lincoln, would end the sales tax exemption for pop, sports drinks and other soft drinks.
Milk, milk substitutes and fruit and vegetable juices would continue to be exempt, as would other food products.
The money collected would be used to fight childhood obesity and increase the health of Nebraska children. One-third of it would be earmarked for projects aimed at keeping children out of the child welfare and juvenile justice system.
Other tax bills introduced Tuesday would allow Nebraskans to deduct college tuition payments from their income taxes and get income tax credits for producing renewable energy.
