Photo by Nebraska News Service
Cigarette tax amounts since 1947
A tax break for some back-to-school shopping, but a tax increase on tobacco, were on the agenda Friday for the Legislature's Revenue Committee.The shopping bill, LB 361, sponsored by Sen. Rick Kolowski of Omaha, would create a Back-To-School Sales Tax Holiday. The proposal is nearly identical to a back-to-school sales tax holiday in Iowa.
Under the bill, reasonably priced clothing and shoes would be exempt from sales tax each year beginning on the first Friday in August through the following Saturday.
Kolowski said the bill helps families as well as retailers, who would likely see an increase in sales on non-tax-exempt items during that weekend.
Dozens of people testified, both for and against, the second bill, LB 438 -- a proposed increase in cigarette and tobacco taxes.
The bill, sponsored by Sen. Sara Howard of Omaha, would increase the tax on tobacco cigarettes from 64 cents a pack to $2.14 a pack (20 cigarettes.)
Howard said the increase would raise an additional $120 million annually, to be split between the general fund and the Nebraska Health Care Cash Fund.
Proponents cited health concerns, reducing teen smoking and increasing aid to the Health Care Cash Fund as reasons for supporting the bill.
Opponents argued that the dramatic increase would result in a loss of sales, because consumers are likely to buy tobacco products where they can pay less.
"Whether it's a good product for you or a bad product for you," said Tim Keigher, executive director at Nebraska Petroleum Marketers and Convenience Store Association, "it is a product that consumers want."