Senator Brandt proposes broad sales-tax expansion, higher cigarette and alcohol levies; businesses and nonprofits warn of costs

Sen. Tom Brandt introduced a two-bill package to expand Nebraska's sales-tax base and increase excise taxes on cigarettes and alcohol, saying the measures would raise revenue to help cover the state's budget shortfall and to fund property-tax relief.

Brandt told the Revenue Committee that LB169 would "impose a sales tax on numerous items and services that are currently exempt," and that a white-copy amendment (AM589) narrows the list after industry feedback. He described LB170 as a separate measure that would add a 72¢ increase to the cigarette excise (from 64¢ to $1.36 per pack) and raise certain alcohol excise rates (including a proposed $4.50 per gallon of pure alcohol for large producers), subject to Commerce Clause review, and estimated the pair could generate roughly $120 million in new revenue in a full year.

Why it matters: Senators and advocates framed the bills as one way to stabilize the state's finances without immediate cuts to services, and to create a revenue stream that could be dedicated to property-tax relief. Opponents warned the proposals could be regressive, difficult and costly for small businesses to implement, could tax business inputs (risking "pyramiding" of tax on both inputs and outputs), and could produce unintended consequences such as driving customers to…