Nebraska lawmakers last week passed a bill that eliminates an occupation tax imposed by Lincoln to help boost its budget.
LB 165 makes it illegal to impose an occupation tax on the sale of equipment, a measure that outlaws Lincoln’s year-old practice of imposing a 6% tax on the sale of telecommunications equipment, such as cell phones.
The state capital already imposes a 6% tax on the sale of telephone services.
Sen. Deb Fischer, R-Valentine, sponsored the bill, which was later amended to allow the city to collect the tax until January 2013.
The measure also limits to 6.25% the amount that a municipality can levy for telecommunications services, though the tax rate could be increased by 0.25% with voter approval.
The new tax was projected to raise $600,000 annually for Lincoln and was an attempt to offset other revenue losses.
Nebraska already has some of the nation’s highest taxes on telephone services, Fischer said.