Eliminate the sales tax exemptions for candy and soft drinks
Summary
LB170 would amend Nebraska’s sales tax statutes to remove the existing sales tax exemptions for candy and soft drinks. The bill revises the statutory definitions of food, candy, and soft drinks so that candy and soft drinks are no longer treated as exempt food items for sales and use tax purposes. It also harmonizes related definitions for alcoholic beverages, dietary supplements, food ingredients, prepared food, vending-machine food, and tobacco, and repeals the original section being replaced.
In practical terms, the measure would make candy and soft drinks taxable under Nebraska sales and use tax law, while leaving the broader food exemption in place for other qualifying food items. The bill includes an operative date of October 1 and is framed as a revenue-and-taxation change rather than a broader consumer-regulation measure.
Impact
LB170 would change the tax treatment of certain grocery and convenience-store items by narrowing the food exemption in Nebraska sales tax law. Retailers selling candy and soft drinks would need to collect sales tax on those items once the bill became operative, and the Department of Revenue would need to administer the revised definitions and update guidance accordingly. The bill affects consumers, retailers, vending-machine operators, and businesses that sell packaged snack and beverage items, while preserving exemptions for most other food and food ingredients.
Sentiment
The voting history suggests the bill faced substantial resistance and limited support. Multiple motions to amend or alter the bill failed by wide margins, indicating that most senators were not willing to change the proposal in the ways offered during debate. At the same time, one Brandt motion prevailed, showing there was at least some willingness to refine the bill’s language or structure even though the underlying tax change remained controversial. The final disposition of the bill as indefinitely postponed also suggests it did not ultimately advance as a broadly accepted tax reform.
Contention
The main point of contention was whether Nebraska should eliminate the sales tax exemption for candy and soft drinks, which would increase the tax burden on those products and potentially raise consumer costs. Opponents likely objected to expanding taxation on common household purchases, while supporters emphasized revenue generation and consistency in the tax code. The failed amendment votes indicate disagreement over the bill’s scope and wording, including how the definitions of candy, soft drinks, prepared food, and related categories should be drafted to avoid unintended tax consequences.