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."