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LB 170

Eliminate the sales tax exemptions for candy and soft drinks

109th Legislature (2025-2026) Introduced by Tom Brandt and 1 co-sponsor

LB 170 would remove candy and soft drinks from food exemptions, making them taxable starting Oct 1, 2025, raising consumer prices and widening state sales tax collection.

Title printed. Carryover bill
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Bill Summary · LB 170

Summary — LB 170 (2025)

Title: Eliminate the sales tax exemptions for candy and soft drinks
Introduced: January 13, 2025 (Sen. Tom Brandt, primary; co-sponsors include Dorn and Sen. Murman)
Committee: Revenue — Hearing March 13, 2025 (advanced to General File)
Operative date: October 1, 2025

Purpose / Intent

LB 170 would make defined candy and soft drinks subject to Nebraska state sales and use taxes by removing those items from the statutory definition of “food” and “food ingredients” that currently are exempt from sales tax (except for prepared food and certain vending machine sales). The stated policy goal in the introducer’s statement is to create a sales tax on candy and soft drinks.

Key provisions / changes

  • Amends Neb. Rev. Stat. § 77-2704.24 to:
    • Add statutory definitions for “candy” (sugar- or sweetener-based confections — bars, drops, pieces, etc.) and “soft drinks” (nonalcoholic beverages containing natural or artificial sweeteners).
    • Explicitly exclude defined candy and defined soft drinks from the classification of “food” and “food ingredients,” thereby removing their current sales tax exemption.
  • Sets the act to become operative October 1, 2025.
  • Repeals the prior version of § 77-2704.24 as replaced.

Note on definitions: the bill’s text excludes some beverages from the “soft drink” definition (for example, beverages that contain greater than 50% fruit or vegetable juice by volume and certain milk/substitute-based drinks), and excludes products containing flour or requiring refrigeration from the “candy” definition. (See bill text for precise language.)

Who would be affected

  • Consumers: purchases of candy and soft drinks would be subject to state sales tax, increasing the retail price by the applicable sales tax rate.
  • Retailers & distributors: grocery stores, convenience stores, vending operators, beverage distributors and manufacturers would need to collect and remit tax on these product categories and adjust point-of-sale and accounting systems.
  • State government: additional sales tax revenue would flow to the General Fund (bill does not specify revenue estimates).
  • Trade groups and regulated industries: grocery, hospitality, convenience store, beverage and liquor wholesalers and related associations would be directly affected operationally and financially.

Procedural status & actions (selected)

  • Introduced Jan 13, 2025; referred to Revenue Committee Jan 15, 2025.
  • Committee hearing March 13, 2025; advanced to General File.
  • Placed on General File April 8, 2025.
  • Multiple amendments and motions were filed during floor consideration (notably Brandt AM603 → AM1318 substitution, and additional floor amendment activity listed). Several procedural motions by Sen. Cavanaugh and Sen. Dungan (to bracket, recommit, or indefinitely postpone) were filed and failed on May 19, 2025. AM603 was withdrawn and replaced by AM1318 (AM1318 pending as of May 19, 2025).
  • Support and opposition at committee: proponents included the bill sponsor, Ag Leaders Working Group, and Philip Morris International; opponents included numerous trade and industry groups (Nebraska Grocery Industry Association, Nebraska Retail Federation, Nebraska Chamber, Nebraska Beverage Association, convenience store and hospitality groups, NFIB, liquor wholesalers and commission, etc.).

Fiscal / policy considerations

  • The bill would broaden the sales tax base and is expected to increase General Fund receipts; the bill text does not include an official fiscal estimate in the provided materials.
  • Policy debates likely focus on taxation fairness (targeting discretionary sugary items), impacts on low-income consumers, administrative burden for retailers, and effects on the beverage and grocery industries.

For exact statutory language and any adopted floor amendments, consult the printed bill and legislative journals for amendments AM1318, AM603, and subsequent action.

Compiled from official sources — confirm details with the bill’s official record.

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