As state lawmakers wait for the final version of a plan to cut property taxes to be advanced to the floor for debate, two prominent delivery services say a proposed delivery tax would increase the cost of basic goods for Nebraskans.
DoorDash and Uber Eats, which organized a coalition of business owners, delivery drivers and customers to urge members of the Legislature to oppose the measure, said a proposed tax on online deliveries would hit working families and older Nebraskans the hardest.
In the latest version of the Revenue Committee’s bill (LB9) aimed at delivering on Gov. Jim Pillen’s goal of cutting property taxes in the state by 50%, “every retail delivery of personal property” would be subject to a 50-cent tax.
The provision was introduced by Sen. Carol Blood of Bellevue, who said it was modeled after a Colorado law that imposes a flat fee on deliveries rather than collecting a percentage based on the amount of goods purchased.
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Other bills introduced in the special session by Sens. Jana Hughes of Seward and Justin Wayne of Omaha have called for a 2% tax on online deliveries but also included exemptions for items already exempt from sales and use taxes — such as food — or orders that are picked up in-person.
The proposals are part of an effort to slash property taxes by up to $1.8 billion in the state.
To replace that revenue collected by local governments and school districts, lawmakers have proposed ending sales tax exemptions for some goods and services, raising taxes on things like alcohol and cigarettes, and levying new taxes.
The plan, which continues to shift as proponents seek to win over enough support to advance the measure on the floor, has been criticized as raising taxes on Nebraskans who rent or do not own property, as well as lower-income individuals who spend a higher percentage of their earnings on taxable goods.
Clark Kaericher, head of government relations for DoorDash, said lawmakers “should be doing everything they can to help more Nebraskans get ahead,” especially during what he described as uncertain economic times.
“What they shouldn’t be doing is imposing new taxes that will ultimately make it more expensive for working people to buy groceries, feed their families or stock up on essentials like medicine, dish soap and diapers,” Kaericher said in a statement.
Freddi Goldstein, a spokeswoman for Uber, which has operated the online delivery service Uber Eats since 2014, said the tax would be felt most by those “who can’t make it to the grocery store every week.”
“It would hurt single moms who work all day and use their phone to have groceries when they are done with their shift,” Goldstein said. “Or elderly people who don’t drive or go out as much as they once did.
“We don’t think it should be a service that should cost money for more people,” Goldstein added.
Blood said those companies were using fear tactics to generate opposition to what she called a reasonable and good faith attempt to address what has been described as a property tax crisis in the state.
“Anything that is currently exempt now such as groceries and medications stays exempt,” Blood said, adding the average user of delivery services would pay an additional $14 in taxes per year under her plan.
According to an estimate from the Legislative Fiscal Office, the 50-cent-per-delivery tax would generate nearly $13 million in new tax revenue by 2027.
The other proposals that would tax deliveries at 2% — LB19 from Hughes and LB48 from Wayne — would generate an estimated $131.9 million and $119.9 million in new revenues, according to a fiscal note.
While the sponsors of those bills said food and groceries would remain exempt, Uber Eats last week sent an email to its customers in the Cornhusker state asking them to reach out to state senators to oppose the plan.
Goldstein said more than 300 customers had filled out a form signaling their opposition to the bill so far.
DoorDash, meanwhile, said more than 31,000 letters had been sent from businesses, delivery workers and customers to oppose the plan, which it said “could make Nebraska responsible for one of the country’s largest statewide tax rates on delivery orders.”
According to a 2022 study by the Chamber of Progress, more than half of adults in the U.S. used a delivery app in the previous year. More than 40% of those users purchased groceries through the delivery service.
It’s unclear if the proposed tax on deliveries will make it into the package sent to the floor by the Revenue Committee for debate, however.
Lawmakers adjourned for the weekend on Thursday — the day they were originally scheduled to begin debate on the Revenue Committee package — while waiting for drafting mistakes to be corrected.
The Legislature is scheduled to convene Monday afternoon at 1 p.m.
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Publish date : 2024-08-11 11:00:00
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