The state senator who introduced the tax proposals made by Gov. Dave Heineman is intrigued by a counter-proposal being floated by some business groups.
Sen. Beau McCoy of Omaha says the Greater Omaha Chamber of Commerce executive board reviewed the counter-proposal this morning.
The governor has proposed eliminating the state individual and corporate income tax. The governor proposes reducing the amount of sales tax exemptions granted by state government annually by $2.4 billion to offset the loss of revenue generated by the state sales tax.
The alternative proposes retaining the sales tax exemptions for the inputs used in agriculture and business, imposing the state sales tax on certain services to raise $1 billion and lowering the state income tax rate for both individuals and corporations to 3%.
McCoy says he’s willing to listen.
“I think the important thing, though, to know is that business, manufacturing inputs along with agriculture inputs would be off the table,” McCoy tells Nebraska Radio Network.
The legislature’s Revenue Committee held two days of hearings on the two bills. Opponents far outnumber supporters of the measure.
McCoy says he took pages and pages of notes and has concluded that there is good reason to not impose a sales tax on inputs, which farmers and business executives say would only increase the cost of Nebraska products, hurting their competitiveness.
McCoy says he likes what he hears so far.
“And I think it’s a very positive development and I think that’s a good step as we make the move toward major tax reform in our state,” McCoy says.
Senior Vice President of the Great Omaha Chamber of Commerce, Wendy Boyer, tells Nebraska Radio Network the chamber is interested in being part of any working group the Revenue Committee might form to consider alternative tax proposals.
Boyer says the Chamber would be willing to participate if three aspects are met. It wants other affected parties to agree to come to the negotiating table. The Chamber calls taxing business inputs “a non-starter”. The Chamber adds that tax reform should be completed during the current legislative session to avoid creating uncertainty for businesses.