Lincoln smoke shop relieved that tax bill is dead — for now

LINCOLN, Neb. (KLKN) – Nebraska’s tax overhaul bill was killed on Thursday, which pleased businesses worried about increased taxes on their products.

But Gov. Jim Pillen said he will call “as many sessions as it takes” this year to get a tax measure passed.

He has not said when he will call the special session.

The bill aimed to reduce taxes for property owners by 22% by raising sales tax on items like cigarettes.

It also included a 25% tax on consumable hemp products and 20% on vaping products.

Joe Fraas, owner of G&G Smoke Shop, said those increases would drive consumers out of state or toward less safe products online.

He said not only would that reduce the amount of taxes the state collects, but it would also hurt Nebraska businesses.

“It’s obvious that it’s a punitive tax; it’s designed to punish people,” Fraas said. “Tobacco tax is less than 7%, alcohol is 4%. At 25% extra, when you can buy it for so much cheaper online, there’s very little chance that people would decide to continue buying it at local stores.”

More than 1,600 jobs and tens of millions of dollars come from the hemp industry in Nebraska, according to Fraas.

That’s why he’s hoping state senators will take their time discussing a bill that could potentially hurt it.

Fraas said the bill was a tax shift, reducing the burden for wealthy property owners by putting it on consumers.

“It seems like a crazy experiment to me,” he said. “I don’t think this has even been done in other states. I guess give it to Gov. Pillen for creative thinking, but I’m afraid he may have created himself a real monster here.”