How Sales Tax is Threatening Nebraska Laundromats

For decades, laundry tax exemptions has been an important topic for those involved in the coin laundry industry. Exemption from sales tax, which varies state-by-state, allows self-service laundry owners to provide affordable services to clientele and have a successful business model designed for longevity and growth. Unfortunately, for coin laundry owners, exemption from sales tax is not a guaranteed thing. State-based legislation can change at a whim, making it important for those involved in the industry to stay up-to-date and involved in their individual state’s lawmaking. Martin-Ray Laundry Systems proudly distributes commercial laundry equipment within the state of Nebraska who is currently at-risk for losing their sales tax exemption status.

Understanding the Threat that Sales Tax Presents to Nebraska Laundromat Owners

Currently, 47 out of 50 states provide sales tax exemption for the self-service laundry industry, with Nebraska falling within the majority of states that allow this exemption to laundromat owners. In the beginning of 2017, the Nebraska legislature introduced tax reform bills LB452 and LB563, proposing to eliminate certain tax exemptions and impose sales tax on services within the state.

Tax Reform Bill:

Date Introduced:

Proposed Change:

LB452

January 17, 2017

Impose sales tax on services and change income tax rates and personal exemption amounts

LB563

January 18, 2017

Impose sales tax on certain services and eliminate certain sales tax exemptions

 

The Coin Laundry Association (CLA) shares that these bills would broaden the scope of the sales tax base to include Nebraska laundromat owners since they are part of the currently exempt service industry, requiring them to pay 7.5% of gross sales each year, which is the maximum tax percentage amount for the state. In addition, laundry owners would not be able to collect any tax from customers who use their facilities to help offset the expenses. These proposals for change follow suit with many state legislatures who are making a shift to consider a comprehensive expansion of their sales tax base to include thousands of businesses within the service industry who are currently exempt from taxes. So what does this equate to in dollar amounts for coin laundry owners? The CLA estimates these new pieces of legislation will cost the average owner $7,500 to $15,000 per year in taxes if they pass.

What You Can Do to Help Prevent the Threat of Sales Tax in Nebraska for Self-Service Laundries

Helping to support the advocates for laundromats is the best way to help protect the interests of your laundry business. The Coin Laundry Association has been working to protect laundry owners’ tax rights for decades because of the huge impact tax exemption has on the success of the industry. The CLA helps to fund and organize state-based lobbyists, low-level monitoring, and public input in order to help legislators understand why laundries should remain exempt. Learn more about the Coin Laundry Association’s advocacy to stop laundry tax or make a donation to support their efforts today!

  • Posted on   04/25/17 at 02:17:54 PM   by Hannah  | 
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