NEBRASKA /A.P. NEWS
UNICAM GIVES FIRST ROUND APPROVAL TO 2 TAX CHANGES
By John Axtell and Associated Press
Mar 26, 2008 - 7:21:49 PM

The Unicameral has given first-round approval to a revamped gas tax based on price rather than the amount sold. The bill...strongly supported by a coalition of rural lawmakers...is a 5% excise tax on the average wholesale price of gasoline.

When combined with a previously approved budget increase for the Nebraska Department of Roads, the bill would result in an estimated 4-1/2 cent per gallon increase - 1.2 cents July 1st and 3.3 cents January 1st. The roads budget would increase a little over $30-million dollars.

Governor Dave Heineman opposes any change in the gas tax...either a higher rate or the price-based approach...preferring to wait and see whether Congress increases highway funding.

First round passage was 27-12...3 votes short of the number needed to override a veto, should one come. Fischer says she'd support overriding a veto of either type of gas tax increase.

Lawmakers have already rejected the governor's budget proposal to give the Roads Department $15 million in general funds to fund salary increases that would otherwise draw money from the construction budget.

The new approach to the gas tax wasn't the only new tax proposal getting first-round approval yesterday. Lawmakers unanimously advanced a bill extending the sales tax to songs, movies and books downloaded over the Internet.

A coalition of businesses, including Apple, has opposed the legislation...and lawmakers received large numbers of calls and e-mails asking them to vote against it, but the coalition didn't testify at the public hearing on the bill.

Revenue Committee Chairman Ray Janssen says the bill isn't a new tax or a major change in state policy, but simply a clarification of what products are subject to the sales tax.

The Nebraska Supreme Court ruled in 1992 that digital versions of products should be taxed the same as if they were tangible products. That means an iTunes song purchased over the Internet should be taxed the same as if it were a compact disc purchased in a Nebraska store.

Janssen says enough confusion existed that the state hassn't enforced the ruling...confusion LB-916 is intended to eliminate. He says "a book is a book is a book, if you download it or buy it at a bookstore."

Nebraska wouldn't be breaking new ground by taxing digital products. South Dakota recently joined several other states in charging such taxes, and similar legislation is pending in California.


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