Revenue Committee
January 31, 2025
Committee Chair: Sen. Brad von Gillern | Bills Heard: 3 | Full Transcript (PDF)
LB117: Exempt residential utilities from state sales tax
Introduced by: Sen. Rick Holdcroft | Testimony: 3 proponents, 1 opponents, 0 neutral | Read bill text (PDF)
Holdcroft seeks to exempt residential utilities from Nebraska's 5.5% state sales tax, citing fairness and necessity. The bill would remove sales tax on electricity, natural gas, propane, and sewer for residential use—treating them like food and medicine already exempt from taxation. Why it matters: The $130-140 million fiscal note is substantial given Nebraska's projected $432 million budget deficit, and municipalities would lose significant local option sales tax revenue. Omaha alone faces an $11.4 million annual loss. What they're saying: Proponents argue utilities are necessities, not luxuries, and that 44 states—including all Nebraska neighbors except Wyoming—already exempt them. "It's just not right to tax electricity if we're not going to tax other things," said former Sen. Lou Ann Linehan. Opponents counter that exemptions should be paired with repealing other tax breaks to offset costs. Sen. Jacobson noted constituents consistently cite property taxes, not utilities, as their primary concern. By the numbers: Over 30 states exempt utility services; 44 states have some utility exemption; fiscal note estimated at $130-140 million annually. What's next: No vote was taken. Holdcroft indicated willingness to work with the committee on phased implementation, potential exemption of only electricity or natural gas, or coupling the bill with repeal of other exemptions to generate offsetting revenue.
Committee sentiment: Supportive: Sen. Teresa Ibach, Sen. Eliot Bostar Skeptical: Sen. Mike Jacobson Unclear: Sen. Kathleen Kauth
Sentiment estimated from questions and comments — not stated positions.
LB314: Clarify turnback tax provisions for sports facilities
Introduced by: Sen. Tony Sorrentino | Testimony: 1 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sorrentino advances cleanup bill clarifying turnback tax rules for sports facilities, allowing earlier public/private partnerships. LB314 permits political subdivisions and nonprofits to apply for turnback tax funding once both parties approve a resolution to build a facility, and adds a 20-year maximum lease term previously unspecified in statute. Why it matters: The bill enables communities to partner with private nonprofits to build sports facilities while maintaining public benefit requirements. Turnback tax—sales tax revenue returned to local governments—is designed to help projects generate returns exceeding initial state investment. What they're saying: Anthony Carrow, director of Nebraska Elite Volleyball, testified the organization turns away 200+ players annually due to facility constraints. The ASICS Presidents Day Classic, which generates nearly $10 million in annual economic impact (second only to the College World Series), had to reject nearly 100 teams in 2025, costing $1.7 million in lost economic impact. Former Nebraska volleyball coach John Cook's letter urged the state to "help us provide more opportunities for Nebraskans that want to play youth sports." By the numbers: Nebraska Elite Volleyball generates ~$10 million annual economic impact; turned away ~100 teams in 2025 due to space constraints. What's next: No vote was taken. Sorrentino waived closing remarks. The bill received no online comments and no opponent testimony.
Committee sentiment: Supportive: Sen. Mike Jacobson, Sen. Brad von Gillern Unclear: Sen. James Dungan, Sen. Eliot Bostar
Sentiment estimated from questions and comments — not stated positions.
LB212: Cap excise tax on premium cigars at $0.50 per cigar
Introduced by: Sen. Dave Wordekemper | Testimony: 2 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Wordekemper proposes capping Nebraska's premium cigar excise tax at $0.50 per cigar to level the playing field with online retailers. The bill maintains the 20% excise tax rate but limits the dollar amount to $0.50 per cigar, affecting only cigars priced above $2.50. Online retailers currently avoid the state excise tax entirely, undercutting brick-and-mortar shops. Why it matters: Nebraska has 39 premium cigar shops that employ local workers and contribute to communities. Approximately 50% of cigar purchases in the state come from online retailers who don't collect excise tax, creating an unfair competitive advantage. What they're saying: Proponents note 15 states have enacted similar caps and that Michigan made its five-year sunset permanent in 2019 based on success. "It's a shop local bill," said Anthony Goins, co-owner of Capital Cigar Lounge. Sen. Jacobson countered that the $500,000 fiscal note is significant given the state's $432 million budget shortfall and questioned whether the tax cap would meaningfully impact business for premium cigars costing $10-15 each. He suggested imposing excise tax on online retailers instead. By the numbers: ~50% of Nebraska cigar purchases come from online retailers; premium cigars cost $10-15 each; youth cigar use declined from 21% (2014) to 6.4% (2023); fiscal note: $500,000 annually. What's next: No vote was taken. Wordekemper indicated willingness to work with the committee on amendments, including potential taxation of online retailers, and committed to "level it somehow" without creating undue tax burden.
Committee sentiment: Supportive: Sen. James Dungan, Sen. Eliot Bostar Skeptical: Sen. Mike Jacobson Unclear: Sen. Kathleen Kauth, Sen. Brad von Gillern
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The Revenue Committee hearing was held on January 31, 2025. Committee Chair Sen. Brad von Gillern opened with procedural instructions regarding testifier sheets, the five-minute light system, and written position statement deadlines. Committee members present included Sen. Tony Sorrentino, Sen. Kathleen Kauth, Sen. Eliot Bostar, Sen. Mike Jacobson, and Sen. Teresa Ibach. Legal counsel Sovida Tran and committee clerk Linda Schmidt assisted. Pages Lauren Nittler (UNL, ag econ) and Jessica Vihstadt (UNL, political science and criminal justice) provided support. The committee heard three bills: LB117 (utility sales tax exemption), LB314 (turnback tax clarification), and LB212 (premium cigar excise tax cap). No votes were taken on any bills. Written testimony included 11 proponent letters and 7 opponent letters for LB117, 1 proponent letter and 5 opponent letters for LB212, and no online comments for LB314.
Generated by NE Wire Service | Source: Nebraska Legislature Transcribers Office This is an AI-generated summary. Verify all claims against the official transcript.