New local sales taxes taking effect
According to the NE Department of Revenue, the following are changes to the local sales and use taxes effective Jan 1, 2020:
- Gage County will start a new 0.5% county sales and use tax rate that is effective in the entire Gage County area.
- Deshler will start a new 1% city sales and use tax rate.
- Unadilla will start a new 1.5% city sales and use tax rate.
- Decatur will increase its city sales and use tax rate from 1% to 2%.
And these are the changes effective April 1, 2020:
- Clatonia will start a new 0.5% city sales and use tax rate.
- Shelby will start a new 1.5% city sales and use tax rate.
- Clarks will increase its city sales and use tax rate from 1% to 1.5%.
- Friend will increase its city sales and use tax rate from 1% to 1.5%.
Currently, cities and counties can levy their own sales tax with voter approval, and it can be set at ½, 1, or 1½ percent. Any city, except a metropolitan class city (Omaha), may impose a local sales tax rate up to 1¾, or 2 percent of the retail sales within the boundaries of the city.
If the state were to expand its sales tax base, local taxing subdivisions with sales tax authority would then receive additional revenue on each transaction that was newly subject to sales tax. However, there are some complications with local sales taxes that prevent them from being fully utilized as an alternative to property tax. One is that cities and counties cannot both collect a sales tax in the same jurisdiction.