Current law undermines success of Nebraska small businesses

By Johnathan Hladik,, Center for Rural Affairs

The most effective and desirable economic development strategy for many rural communities is small entrepreneurship. This is development based on locally-owned and owner-operated small businesses. In Nebraska’s farm and ranch counties, over 70 percent of the net job growth comes from people creating their own jobs.

Current law undermines the success of these businesses by favoring online retailers. Because of this, it is necessary for Nebraska to pass the Remote Seller Sales Tax Collection, or LB 44. Doing so recognizes the increasing share of business, both retail and otherwise, that takes place online. It also levels the playing field for small business entrepreneurs who drive our state’s rural economy.

The Department of Commerce tracks e-commerce sales across the United States, which increase steadily. Online retail sales in the third quarter of 2016 reached $101.3 billion. Because sales tax is not collected, online retailers have an advantage over local businesses.

Small businesses are especially important today. Nebraska is home to over 145,000 microbusinesses, making up 86 percent of all businesses in the state. Of these, 74 percent report the microbusiness as the sole source of household income. Over 24 percent of Nebraskans are employed by a microbusiness.

Nurturing locally-owned businesses puts the economic future of the community in the hands of its own members. This builds local leadership and strong communities. Eliminating loopholes that benefit online retailers gives these businesses and the communities they depend on the best opportunity to thrive.

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