Nebraska proposal would tax some stores and fund neighborhood grants

The proposal would impose a five percent tax on covered businesses' gross receipts. It would cover gas stations, convenience stores, and package liquor stores that sell alcohol, tobacco, or cigarettes for use away from the store and have a fixed location in a federally designated census tract. The tax would be collected and reported like Nebraska sales tax, then sent to the Community Reinvestment Fund. The tax would begin January 1, 2027.

Covered businesses would file annual reports, and the Department of Economic Development would publish ratings for each business. The reporting and rating rules would apply to each covered business. Reports would cover community investments and activities, local hiring, and participation in food and nutrition programs. Outstanding or satisfactory ratings would bring public recognition and preference for applicable state facade grants; local licensing consideration would apply only where lawful. A needs-to-improve rating would prompt a technical assistance plan. Failure to file or a material misstatement would result in a fine of up to $10,000 per location; a later noncompliance rating could bring a fine of up to $50,000 per location. A business could request a hearing within 30 days after receiving notice of a fine. The first report would be due by April 1, 2028; later reports would be due by April 1 each year.

The Department of Economic Development would award annual grants from the Community Reinvestment Fund. The department would run the program in consultation with the Department of Health and Human Services. Awards would depend on money deposited in the fund. Grants would support childcare, community development, health care, food access, homelessness prevention, re-entry housing, and related services. At least 70 percent of tax collected in a tract would be awarded in that tract. Up to 30 percent of collections from adjacent tracts could be pooled regionally. The department would prioritize measurable results and projects led by and serving tract residents; grants would add to, not replace, existing state or local funding. Annual grant awards would begin January 1, 2028.

Covered businesses could not advertise the tax as a surcharge on a specific product. The restriction would apply to businesses covered by the proposed tax. Businesses could still adjust prices in the ordinary course of business. A violation would count as a deceptive trade practice, and the Attorney General could enforce the rule.