The Nebraska legislative session has officially come to a close — and with it some missed opportunities. Leveling the state’s sales tax playing field is one such policy that failed to break through the noise. Currently, a substantial disparity exists among food retailers in the Nebraska marketplace. Next session, Lincoln should make refreshing the tax code a priority.
Food is taxed differently depending on where it’s purchased — even if it’s the exact same product. Following three years of sky-high inflation levels unseen since the days of Jimmy Carter, state lawmakers should rethink how fiscal policies contribute to higher price tags.
Under current law, if an item is purchased at a vending machine — which today sells everything from snacks to healthy staple foods — the consumer is responsible for covering a 5.5 percent sales tax. If the same person buys the same product at a grocery store, they pay no tax. Excluding vending machines from the zero percent grocery tax highlights an out-of-date perception of product variety available in an unattended retail environment.
These are not your grandfather’s vending machines. Twenty-first century vending machines sell everything from fresh produce and coffee to healthy snacks like yogurt and cheese sticks. Peanuts and soda are no longer the only options offered. And the footprint of this alternative nutrition source has grown big time — now being found at community colleges, in office buildings, and on factory floors.
The modern vending machine industry brings food access closer to where Nebraskans work, live, and go to school — increasing convenience in areas ranging from Omaha to Crawford. Notably, the option aids Nebraskans living in rural areas where the closest traditional grocery store may be dozens of miles away.
Adjusting the state tax code to ensure food sellers are playing by the same rules will boost competition and foster consumer freedom — helping to create a more vibrant economy. No longer will Nebraskans have to include the additional sales tax into their calculus when deciding between grabbing a bottled water from the vending machine downstairs or driving a few miles down the road to purchase the exact same product at a grocery store.
Not only is leveling out the tax code a smart policy that will create a stronger economic environment, but the idea is broadly popular among the electorate. In fact, according to polling conducted by my organization, 80% of voters nationwide believe taxes on food and beverages should be the same regardless of where the items are sold.
And the move would have little impact on Nebraska’s finances. According to a National Automatic Merchandising Association regulatory assessment model, normalizing the tax rate on food sold through vending machines will only affect an estimated 0.07% of the state’s budget.
Consumer prices will continue to be manipulated by an out-of-date tax code that elevates some retailers over others. Addressing the disparity should be a major topic of debate during the 2025 session.
Bill Meierling is the senior vice president of external affairs at the National Automatic Merchandising Association.
