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Thursday, May 5, 2016

Internet sales tax collection lacking, says official

Friday, January 25, 2013

McCOOK, Nebraska -- City Manager Jeff Hancock repeated a call for an effective method to tax Internet sales during the Chamber of Commerce legislative conference call, Thursday morning. Hancock voiced a similar message to Lt. Gov. Rick Sheehy last week during his visit to the McCook airport and this week spoke to Sen. Mark Christensen via the conference call.

Hancock asked Christensen if anything was being done to address the lost sales taxes, due to Internet sales of products. Hancock said when he was a city manager in Missouri the state estimated it lost approximately $200 million in sales tax per year.

Hancock said the scenario put local businesses at an unfair disadvantage, when trying to compete with companies over the Internet that didn't have to charge sales tax.

Sen. Christensen replied that there had been discussion on the topic, but he wasn't familiar with a bill introduced this session that addressed it.

After chamber members expressed unanimous support for pursuing the topic Sen. Christensen said he would do some research and report back to the group during an upcoming conference call.

The topic of sales tax in general dominated much of the conference call, with chamber members voicing their opposition to Gov. Dave Heineman's proposed tax reform, prior to expressing support for improving the effectiveness of collecting a sales tax on internet sales.

Gov. Heineman recently proposed eliminating individual and business income tax, as well as social security, retirement and other income taxes.

His proposal would replace the revenue by removing sales tax exemptions currently in place.

Chamber members voiced concerns that removing sales tax exemptions on agriculture and service industries, such as the hospital, would have a severely negative impact on those operations.

According to the Nebraska Department of Revenue website, consumers are already required to pay sales tax for taxable items purchased over the Internet by reporting the transactions as use tax when they file state income taxes. The Nebraska state sales and consumer's use tax rate is 5.5 percent, combined with the 1.5 percent City of McCook sales tax, results in 7 percent due of each Internet purchase.

Hancock told the Gazette that he did not know whether people or businesses were not reporting their use tax in Nebraska, "I just know that it has been a big issue in other states and that Nebraska should estimate the figure and examine the issue."

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Ag and non-profit, like churches, can not pass the tax on to consumers. Service businesses and even hospitals can pass the tax on to users. Great idea on Internet sales. Maybe even TV orders.

-- Posted by dennis on Fri, Jan 25, 2013, at 2:00 PM

Sometimes when I order stuff on line, some businesses charges me tax, but others don't. I wish they'd just all take care of the tax when I make the purchase.

-- Posted by Pierre on Fri, Jan 25, 2013, at 4:41 PM

If you buy on line you need to add shipping and handling which is higher than sales tax, so you probably do not save money.

-- Posted by dennis on Mon, Jan 28, 2013, at 10:24 AM

Items which are purchased over the phone or by mail order are already taxed the Consumer Use Tax just like internet sales where retailers don't charge a sales tax to consumers. This means sales from places such as shopping channels and catalogs already fall under the same category as internet sales. Shipping and handling is taxable so that should put online retailers at a disadvantage over local retailers.

The Supreme Court forbid states from collecting sales and use tax collection across state lines a long time ago because it is a violation of the Commerce Clause. Recently a Federal District Court ruled that a state can't even require retailers to disclose to buyers that they are responsible to pay use tax.

Only Congress can make a change that will overturn the Supreme Court ruling. Local governing boards, state legislatures and governors have no authority when it comes to putting requirements on retailers across state lines. Hopefully, our representatives will become educated on the issue so their efforts are at least pointed in the correct direction.

-- Posted by Aaron Kircher on Tue, Jan 29, 2013, at 3:41 PM

dennis depends on the items. I find many things online I can get for less including shipping than I can by at regular price without tax from a retailer.

-- Posted by npwinder on Tue, Jan 29, 2013, at 10:21 PM

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