A bill will be filed in the Nebraska legislature that would end most of the sales tax breaks enjoyed by business and agriculture in exchange for eliminating the state income tax.
In defending his plan, Governor Dave Heineman says he understands that there will be resistance among farmers to ending sales tax breaks on buying tractors and combines, chemicals, seed and fuel used on the farm.
But the governor says the state needs to have the discussion.
“It’s tough, but it can be done civilly and respectfully—what should be in and what should be out,” Heineman says. “But you also need to ask that farmer and rancher—and I’m already asking them—then what are you for? Are you for the current system that penalizes our families and small business?
“We want to grow. So we’ve got to have this conversation—and I believe we can.”
State senator Brad Ashford of Omaha says the elimination of the sales tax break on tractors and combines is only fair.
“Omaha—and the rest of the state—is a transportation hub. Distribution of goods is a major industrial base in our state,” Ashford says. “They’re paying tax for that truck and there’s no tax being paid on the combine. So I think to address these exemptions as the governor has proposed—especially on the business side—is really leveling the playing field.”
Governor Heineman’s plan would eliminate 2.4 billion dollars in sales tax exemptions—the equivalent of the money currently brought in by the individual and corporate income tax.