Electricity Tax Exemption Under Consideration, While Other Exemptions Are on the Chopping Block

By Gordon Hopkins While the Nebraska Legislature considers eliminating more than 70 tax exemptions that currently apply to various goods and services, they are also looking at making another service tax-exempt: electricity.On Wednesday, August 7, the Revenue Committee considered an amendment to LB (Legislative Bill) 9 that would exempt the purchase and sale of residential electricity from sales or use taxes. According to the bill's original Statement of Intent, “LB9 utilizes additional state aid to public schools to lower the maximum levy cap to provide property tax relief for Nebraska property tax owners. LB 9 enables Nebraska to sustain property tax relief and increased state funding of public schools for the next decade.”Some opponents of the bill objected because it did not include other forms of energy such as natural gas. Jill Becker, a lobbyist for Black Hills Energy, testified in opposition to the bill, “There’s no policy reason to differentiate between electric and natural gas customers.” Nebraska Public Service Commission’s public advocate for natural gas ratepayers, Chris Dibbern, testified in support of the bill but asked legislators to amend the bill to include natural gas. While electricity sales may become tax-exempt, Governor Jim Pillen has made clear his opposition to the many existing exemptions. At a recent press conference, the governor said, “we have to close the loopholes and the special interests that have gotten us here, the 120 sales tax exemptions over the last 50 years, legislators have approved those. Why? Because they were, they were they were sold. Those were going to be tax cuts. No cuts went on the backs of property tax, if we had all the exemptions and played be $7 billion today.”

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