The Nebraska Hospitality Association (NeHA) has come out today strongly opposed to a bill recently proposed in the Nebraska legislature that would establish a new tax on all motor vehicle deliveries.
State Senator Carol Blood of Bellevue brought the bill, LB26, before the Revenue Committee during this summer’s special legislative session to address property tax relief.
LB26 would add 0.27-cent fee on all motor vehicles delivering to a location within the state with at least 1 item of tangible personal property subject to state sales or use tax. New businesses, and ones with gross annual-sales under $500,000, would be exempt. The revenue from LB26 would go towards the General Fund in anticipation for a rebalancing of state property tax rates.
Referencing similar legislation enacted in neighboring states, Blood said it raked in about $15-18 million in additional revenue.
“I understand this retail delivery fee alone will not make up for the short fall proposed in the Governor’s property tax cuts,” said Sen. Blood during a committee hearing. “But we can use this in conjunction with other revenue streams that are being presented this week.”
NeHA argues that this tax would disproportionately affect both local businesses and consumers during a time when the industry is still recovering from the impacts of the pandemic.
“This new tax threatens to undermine the recovery efforts of countless small businesses that are still struggling to regain stability,” the group said in a statement. “This delivery fee places an undue burden on consumers who rely on delivery services for convenience and safety, particularly during times of uncertainty. It also adds an additional layer of cost to businesses that are already dealing with increased operational expenses and labor shortages.”
The NeHA plans to mobilize its members and engage with state lawmakers to advocate against the implementation of this fee.
“We urge lawmakers to consider the broader implications of this tax. It will not only impact the profitability of local businesses but also reduce the accessibility and affordability of food and beverage delivery for consumers. At a time when we should be supporting economic recovery and growth, this tax moves us in the wrong direction,” they added.
A coalition of groups/corporations sent a letter to lawmakers asking them to oppose the bill, including NeHA, DoorDash, Grubhub, the Nebraska Grocery Industry Association, Nebraska Retail Federation, and Uber.
The Revenue Committee heard arguments in support and opposition during the July 31 hearing on the bill, and took no further action on the item.