Nebraska’s unicameral legislature engaged in a heated debate over a proposed tax bill that includes a 100% tax rate on CBD and consumable hemp products. The bill aims to generate additional revenue to offset property taxes. While the bill sponsor acknowledges that the 100% tax rate is not set in stone, no alternative was proposed during the lengthy floor discussion.
Introduction
The proposed tax bill in Nebraska has sparked controversy, particularly regarding the steep tax rate on CBD and hemp products. As lawmakers grapple with the state’s financial challenges, some are questioning whether legalizing and regulating marijuana could offer a more sustainable revenue stream.
The 100% Tax Rate Debate
During the floor debate, Senator Terrell McKinney expressed concern about the proposed 100% tax rate, emphasizing that neighboring states have significantly lower rates. He advocated for exploring alternative revenue sources, including the legalization of marijuana. For instance, Colorado generated over $280 million in marijuana tax revenue during the last fiscal year.
Brain Drain and Policy Perspectives
Senator Jen Day highlighted Nebraska’s brain-drain issue and urged lawmakers to address it from various policy angles. One contributing factor is the state’s reluctance to legalize even medical cannabis. While the bill’s sponsor, Senator Lou Ann Linehan, initially proposed the 100% hemp tax, she has since indicated that negotiations are ongoing. The tax would not apply to FDA-approved CBD products or hemp dietary and fiber products.
