Last week, lawmakers voted to advance a LB 44 that would require online retailers without brick-and-mortar stores in Nebraska to charge state sales tax on items purchased by residents. Governor Pete Ricketts opposes the bill saying there are issues that need to be addressed first.
Governor Ricketts says, “The bill, LB 44, is based upon a bill just a few weeks ago in South Dakota was declared unconstitutional. This goes back to a Supreme Court ruling back to the 1990’s that says you have to have a physical presence in your state to be able to have companies remit that tax to you.” He says that is always subject to change and he believes supporters are hoping to get a different ruling from the Supreme Court or have Congress act on that matter. However, for now it is unconstitutional and Governor Ricketts says it is something he cannot support.
Supporters say the bill could bring in upwards of $40-million a year and that would help with the state’s budget shortfall. Governor Ricketts says, “If we think we are going to be able to fill a hole in our budget by adding this on it just isn’t going to happen. It would be very dangerous to rely upon that because if this bill were to pass it almost certainly would be challenged in court because it was ruled unconstitutional just a few weeks ago, we aren’t going to win on that one.”
The online giant Amazon recently volunteered to collect Nebraska sales tax and Ricketts hopes other online sellers will do the same. Nebraskans are also reminded they are required to declare and pay taxes on online purchases when they file their income taxes.