Online Sales Taxes, Wind Power Regulation, Chambers' Future Discussed

Jan. 31, 2019, 6:22 p.m. ·

The Nebraska Capitol (Photo by Fred Knapp, NET News)

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How to tax internet sales, how to regulate wind projects, and the political future of Senator Ernie Chambers were discussed in the Legislature Thursday.

The U.S. Supreme Court ruled last June that states could collect tax on online sales by out-of-state sellers, even if those sellers don’t have a physical presence in the state. Since then, Tax Commissioner Tony Fulton says, an increasing number of companies have begun taxing purchases by Nebraskans, as guidance from the Revenue Department requires them to do.

Thursday’s public hearing by the Revenue Committee was about turning what has been policy into law. And the testimony raised several questions.

One concerned how to handle sellers who do only a small amount of business in Nebraska. The South Dakota law on which the Supreme Court decision was based exempted sellers with less than 200 transactions or less than $100,000 worth of sales from being required to collect the tax. The proposed Nebraska laws copy those exemptions, but differ in how they do so.

Sen. Tom Briese, who introduced one of those proposals, offered a warning. “I would submit that we should be cautious about a scheme that brings all transactions of a marketplace provider within these thresholds. To me, that would mean that a small mom-and-pop business who really doesn’t meet the thresholds but who employs, who uses a marketplace facilitator, would be subject to our sales tax,” Briese said.

The “marketplace provider” Briese referred to could be a company like Amazon, selling not its own goods, but providing a platform for other people and companies to make sales. Briese’s version of legislation would exempt those third party sellers from collecting sales tax until they met the threshold of 200 transactions or $100,000 in sales.

The other versions of legislation, including the one supported by the Department of Revenue, would require marketplace providers to collect the sales tax once those providers met those thresholds.

Another question involved who counts as a marketplace provider who has to collect the tax. Because of those concerns, lobbyist Kim Robak testified neutral on the proposals. “You might wonder ‘How could you possibly be neutral on a bill like this. This is apple pie and the girl next door. This is a bill everybody wants to love,’” she said.

Robak was representing PayPal and First Data, which provide financial services to facilitate internet sales, but are not selling products themselves. She urged the committee to tweak the language to make sure her clients are not required to collect sales taxes.

Another question that came up was how much the state could expect to collect in sales tax on internet purchases. Fulton stuck by the Department of Revenue’s estimate of $30 - $40 million a year. “We included in our projection the whole enchilada,” he assured the committee.

Fulton said the Department’s projection was included in the estimate the Legislature is using as it crafts a new state budget. But the Legislative Fiscal Office says that estimate was based on the assumption that only half the marketplace providers would collect taxes in the absence of legislation. The Fiscal Office projects if a law is passed, that will bring in an additional $19 million over the next two years.

Fulton disagreed. “I feel compelled – I have to communicate to you that even if this bill passes, that’s why we put the fiscal note on it that we did. We do not anticipate this influx of revenue, and that’s important as you guys are setting your budget,” he said.

In another hearing, Sen. Tom Brewer of Gordon promoted his legislation that would require counties to have zoning in place before approving major wind projects. Brewer said his bill addresses three requirements.

“The first one is, county zoning must address setback distances between homes, property lines, and industrial wind turbines. The second one is, counties must address noise and use industrial standards -- scientific standards and methods -- to measure this noise. Three, counties must address the decommissioning of industrial wind energy facilities and dedicate what is necessary in the way of financial resources to ensure this,” he said.

Among those opposing the proposal was John Hansen of the Nebraska Farmers Union, who said after a slow start, Nebraska is finally beginning to realize its wind power potential. “We need to continue to be open for business. We have made a lot of progress in the last five years. We have a lot of projects in place,” he said.

“We are strong supporters of local control. This bill, in our judgment, undermines local control,” Hansen added.

The disagreement reflects conflict in Brewer’s Sandhills district between those who view wind power as an engine of economic development and those who view it as a threat to unspoiled vistas and the fragile landscape.

Also Thursday, Sen. Ernie Chambers dropped a hint about a possible political future. Chambers is the longest-serving state senator in Nebraska history. In 2005, after 38 years in office, he was forced out by term limits.

Chambers sat out the required four years, and then made a comeback. He’s due to be forced out again in two years. But in a speech Thursday morning, Chambers told his colleagues that might not be the end of the story. “Just to spite you all, I have decided I’m going to live at least four more years when I leave here, so I can come back again,” he said.

Chambers who is 81, will be 83 when his current term ends. If he were to sit out four years, make a comeback, and serve two more terms, he would be 95 when he left office.

Asked later by NET News if he was declaring his candidacy, or merely threatening the possibility, Chambers responded with what he said was a quote from Gen. George Patton: “That’s for me to know, and you to wonder about.”

Editor’s note: An earlier version of this story misstated Chambers’ age, and how old he would be if he sat out four years and then served another two terms.