Budget & Taxes (Sales Tax)

This bill would eliminate Nebraska's sales tax exemption for candy and soft drinks, requiring these items to be taxed starting October 1, 2025. Currently, candy (defined as sugar-based products without flour or refrigeration needs) and soft drinks (nonalcoholic sweetened beverages excluding milk-based or juice-heavy drinks) are exempt under state tax law, but this bill would remove them from the list of exempt items. The change would directly affect consumers purchasing these products and retailers selling them, as they would now pay the standard sales tax. This policy shift aligns with efforts to broaden the tax base for non-essential items.

Nebraska bill LB 401 updates rules for sales and use tax filings and compliance for retailers. It changes filing frequencies based on annual tax liability: annual filings for businesses owing under $900 yearly, quarterly for $900-$3,000, and monthly for over $3,000. The bill also adds a reconciliation requirement where businesses must adjust payments if discrepancies exceed 10% of what was paid, with a 50% penalty on unpaid amounts. It clarifies rules for seasonal retailers and accounts receivable transfers, including surety bond requirements for subsidiaries handling unpaid taxes. This directly affects retailers and businesses collecting Nebraska sales tax.

LB 270 would have allowed Nebraska's Auditor of Public Accounts to conduct audits of businesses suspected of reporting errors in sales and use tax filings, expanding oversight beyond the current Tax Commissioner authority. It directly affects businesses collecting sales tax and local municipalities, which could now share confidential tax information under new exceptions to standard confidentiality rules. The key provision created a specific exception permitting municipalities to disclose tax data when necessary for audits related to local tax collection. However, this bill was amended into LB 650 on June 6, 2025, and is no longer active as a standalone measure.