Nebraska ~ Sales and Use Tax: Legislature Overrides Veto of Local Rate Increase

The Nebraska Legislature has overridden Gov. Dave Heineman’s veto to authorize an incorporated municipality to impose a local option sales tax at a rate of 1.75% or 2.0%. Previously, the local rate was capped at 1.5%. The proposal must be approved by at least 70% of the municipality’s governing body before it is submitted to voters at a primary or general election. Any tax increase beyond 1.5% will terminate after 10 years or upon the payment of any bonds and any refunding bonds, whichever occurs later. However, if a portion of the rate increase is imposed for the purpose of an interlocal agreement or joint public agency agreement, and the portion is at least one-eighth percent, there will be no termination date for the rate increase. The municipality seeking to impose a local sales tax at a rate exceeding 1.5% must be a party to an interlocal agreement or a joint public agency agreement with a political subdivision within the municipality or the county, creating a separate legal or administrative entity relating to a public infrastructure project.

L.B. 357, Laws 2012, effective July 19, 2012

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