The study of Nebraska's tax system will begin in earnest Wednesday when the Tax Modernization Committee gets a two-hour overview of the state's tax resources and hears from a sales tax expert.
The committee will begin its meeting at 10 a.m. and discuss the 2007 Burling Commission tax study over lunch, said Chairman Galen Hadley. At 1:30, Professor John Mikesell of Indiana University will address the committee.
Mikesell is an authority on sales tax, and among his professional interests are government finance, policy and administration of sales and property taxation. He also writes a column on sales taxation.
The goal of the Tax Modernization Committee, created in the 2013 legislative session, is to examine whether there is equity in the state's tax code and make recommendations if changes are needed.
Hadley said the committee is trying to make arrangements to stream Wednesday's meeting live online.
In anticipation of the meeting, OpenSky Policy Institute on Friday released a summary of Nebraska's tax system that includes an overview of taxes in Nebraska, a list of taxed and untaxed services and a list of other Nebraska sales-tax exemptions.
"We're just trying to get people information so that they can engage on the issues and know where we stand, as a state," said Renee Fry, OpenSky executive director.
Some people say Nebraska is a high-tax state, but it's not, she said.
It's not a low-tax state, either.
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"I think it would be really challenging for us to be a low-tax state because we're a large state for the number of people that we have," she said. "The only way you become a low-tax state is really eliminating a lot of services that we rely on both in Lincoln and Omaha and outstate, as well."
It's helpful to see what the rates are and what the state taxes and doesn't tax, she said.
Open Sky's summary shows that in fiscal year 2011-12, Nebraska collected $1.8 billion in individual income taxes, $1.6 billion in sales and use taxes, $322 million in gas and fuel taxes, $235 million in corporate income taxes and $214 in other taxes including excise taxes on alcohol, tobacco and keno. Those taxes support state government.
It also collects taxes to support local political subdivisions, such as school districts, cities and counties. Property taxes collected in 2011-12 were $3.2 billion, local option sales taxes $340 million and inheritance tax $43 million.
The state had an estimated population in 2012 of 1,855,525.
The OpenSky summary also lists what services are and are not taxed in Nebraska by type, including agricultural services, business services and computer and online services.
For example, security services, photocopying and printing is taxed, while public relations consulting and many forms of advertising are not, according to the summary. Tuxedo rental is taxed; laundry and dry cleaning services are not. Dating services are not taxed.
Among transactions exempt from state sales tax are feed or water for livestock, prescription drugs, newspapers, groceries, horse racetracks and the Nebraska Lottery.