Sen. Dan Watermeier/Photo courtesy of Unicameral Information Office
A measure which could well lead to Nebraska collecting sales taxes on Internet purchases has advanced to final reading in the Unicameral.
State lawmakers have voted 34-7 to move LB 44 one step from passage and, perhaps, a veto by Gov. Pete Ricketts.
Sen. Dave Watermeier of Syracuse sponsors the bill. He had to overcome a filibuster on second-round debate, securing one vote more than the 33 necessary.
Sen. Lou Ann Linehan of Elkhorn tells colleagues during legislative floor debate it’s a matter of fairness.
“I don’t see how it’s fair that a group of taxpayers who buy at the local retail store end up paying sales tax and someone who goes on the Internet doesn’t pay the sales tax even though by law they’re supposed to pay the sales tax,” Linehan says.
But, Senator Jim Smith of Papillion derides claims the bill could turn consumers back to their local brick and mortar retailers.
“But colleagues, this is false hope for retailers in our state,” Smith warns. “This does not fix the problem. This is bad legislation.”
Smith vows to continue his opposition even during final reading, during which senators normally vote without debate.
Estimates vary greatly on how profitable Internet sales tax collections could be, ranging from $30 million to as much as $95 million a year.
LB 44 would authorize the state to collect sales taxes on on-line purchases if the U.S. Supreme Court rules in favor of the states in a pending court case. A 1992 decision, Quill v. North Dakota, ruled states could not force a retailer without a physical presence in their state to collect sales taxes. South Dakota is challenging the decision in a case before the court.
Gov. Pete Ricketts opposes the measure, arguing the legislature should wait until the Supreme Court issues its decision. If he vetoes the measure, supporters would need 30 votes to override the veto.