EPIC Issues With Its Own Language That the Legislature Cannot Fix Because the EPIC Option would be part of the Nebraska Constitution, certain provisions, if problematic, cannot be fixed by the Legislature. In addition to the issues discussed above, some of these also include the following. (In this article, we are not addressing whether or how the pending LB 79 addresses these.) The Scope. Since Section 15 mandates the tax on “all new goods and services” (other than “grocery items”), the tax would apply to goods and services purchased by, as well as goods and services provided by, the private sector (companies and individuals), the U.S. government, the state of Nebraska, all Nebraska agencies and local governments, all churches, all nonprofits, all health care providers, etc. The North American Industry Classification System (NAICS) identifies several hundred types of services, which is a start on what would now need to be identified and taxed. Tax Rate Uniformity. Section 15 says the state shall impose “a” retail consumption tax or “an” excise tax. It doesn’t say plural taxes. This wording indicates a singular tax at one rate, which may prohibit using multiple rates of tax for different goods or services. Or it might be construed that Section 15 does not specify that a single rate of “tax” must be imposed on the new goods and services. So, the Legislature might decide to enact a variety of rates, depending on the particular goods and services (which may be open to U.S. Constitutional challenge if Section 15 actually means only one uniform rate). Lack of Tax Policy Options. Throughout the history of taxation, governments, for the welfare of their citizens, have sought to design their tax systems so that the brunt of taxation does not overly burden certain groups of people, certain types of organizations, or certain types of goods and services. Other than the “grocery items” exemption, and because of the apparent “one tax rate fits all,” the EPIC Option will be one of the most regressive tax systems we’ve seen. Lack of a Way to Compete. Like it or not, the state of Nebraska exists in an international business world built on competition. Often, in order to keep or attract companies, jobs, and talent in and to our state, the state needs to offer something in the form of tax exemptions or incentives in order to win. The EPIC Option ignores this reality and therefore reduces Nebraska’s ability to compete. Isolation. Companies and individuals face many state and local tax systems around the U.S. While these can be complex, Your clients rely on your guidance to make important financial decisions. When it comes to charitable giving, we can partner with you to simplify their giving and amplify their impact. Your Partner in Philanthropy » omahafoundation.org/advisors CONTINUED ON PAGE 22 21 www.nescpa.org
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