Nebraska beer industry sees fight brewing over proposed tax surge
The state has found a way to add millions to Nebraska coffers but one industry says the plan would bump its taxes by some 350 percent.
The Nebraska lawmaker behind it believes it's just one part of a blueprint to fix the state's reliance on property taxes.
Lindsey Clements is one of the people who would pay the price.
“We thought it was an error at first,” she said. “How could it be increased that significantly?"
The bill would carve $90-million from the Nebraska beer and alcohol industry.
Clements said, "it's a 345% increase," for brewers.
Clements’ Vis Major brewery revitalized the century-old grocery store building at 35th and Center. After a year-and-a-half in business, owners have thought about opening a second location but the recent news from the legislature has them on pause.
Here's what a 345 percent increase means for longstanding metro brewers:
Nebraska brewing company owners tell 6 News the $50,000 it sent in excise taxes a couple years ago to the revenue department translates to $232,000 under the proposed bill.
The owner of Infusion Brewery shared similar numbers. His $50,000 tax bill suddenly climbs to a quarter-million dollars.
Clements said, "This type of increase is nearly impossible for our businesses to absorb that. The concern is if we increase the prices for our customers, does that mean our overall sales will go down?"
State Sen. Tom Briese of Albion, who is behind LB-314, tells 6 News, "We wouldn't be talking about this if we didn't have a property tax crisis in Nebraska. Craft brewers feel they're being singled out. Not true."
The bill also increases Nebraska's sales tax by a half-cent and adds sales taxes to services currently exempt along with additional cigarette taxes. With all the components tallied, the state would collect $740 million.
Brewers we talked with said the recipe robs Peter to pay Paul.
Clements said, "It's disheartening to see, once again, craft beer in Nebraska - every couple of years we're having to fight another battle."
The bill would also eliminate itemized deductions and add an extra tax for those making more than $250,000.
A hearing date in Lincoln has not yet been set.
to read LB 314. It’s 76-pages long but you can see the proposed changes where the text is underlined.