Small-business owners testify against legislation that adds sales taxes, removes redevelopment incentive

February 5, 2026 - 13:29

A proposed bill in the Nebraska Legislature is drawing sharp criticism from the state's small business community. The legislation, introduced by Sen. Dave Murman on behalf of Governor Jim Pillen, seeks to broaden the state's sales tax base while simultaneously eliminating a key redevelopment incentive.

Business owners testifying at the Capitol argued that the combined effect would place a significant burden on local enterprises and stifle economic growth. The removal of the redevelopment incentive, known as tax-increment financing (TIF), was a particular point of contention. Witnesses stated that TIF is a crucial tool for revitalizing aging properties and blighted areas, arguing that its loss would halt numerous community improvement projects.

The bill is part of a continued effort by the governor's office to shift the state's revenue reliance away from property taxes. Proponents believe expanding sales taxes is a more equitable solution. However, small business advocates counter that the plan simply swaps one set of pressures for another, potentially increasing costs for both business operations and consumers. They warn that the changes could disadvantage Nebraska businesses compared to those in neighboring states with different tax structures, impacting competitiveness. The testimony underscores a deepening debate over the best path to tax reform without harming the local economic engine.