Ballard proposes 20-year review of alleged Lincoln tax charges

State Sen. Beau Ballard says he is developing legislation for Nebraska’s 2027 session to review 20 years of collections related to alleged Lincoln sales-tax charges on deliveries to residents in the city’s extraterritorial jurisdiction (ETJ). The proposal would provide refunds for charges found improper, but it has not been introduced, and no audit or refund has been ordered.

Ballard alleges that some deliveries to ETJ residents were charged Lincoln’s 1.75% local sales tax. The area is reported to extend three miles beyond city limits. Ballard said constituents provided evidence of the charges, but no independent audit or agency finding has established that they occurred or were improper. The number of affected purchasers and transactions, and any possible refund total, are unknown.

On Oct. 7, 2026, Lincoln City Council Chair Brodey Weber issued a statement responding to Ballard’s claims. City officials disputed the allegation, saying the Nebraska Department of Revenue collects and administers local sales taxes and that the city does not retain the business tax returns Ballard’s proposed review would need.

What Ballard’s proposal would require

Reporting on the early-stage plan describes a 20-year review and refunds with interest for taxes found to have been improperly collected. The outline also includes quarterly reconciliation going forward and a role for the Nebraska attorney general in enforcing compliance. The interest rate and exact terms were not settled, and no bill text establishes the proposal’s scope, duties or enforcement process.

Lincoln has also said the Department of Revenue has a process for reviewing a business’s claim that sales tax was collected in error and issuing a refund when appropriate. That process is separate from Ballard’s proposed review. No determination or refund concerning the alleged ETJ charges has been established.

State rules do not resolve the allegation

Nebraska regulations assign the Department of Revenue responsibility for collecting and administering city sales taxes and remitting them to cities. They allow a certified city employee, after a written request, to obtain specified confidential tax-return information about taxpayer locations within the requesting city’s boundaries. That rule does not establish what records would be available for deliveries outside Lincoln’s limits.

The department’s sales-tax guidance says the point of delivery determines where a sale takes place for tax purposes, and deliveries into a city that imposes local tax are subject to the applicable rate. That general guidance does not determine whether a particular delivery to an ETJ resident was taxed correctly. Ballard says he plans to pursue legislation in 2027; its final text and any later legislative action remain unsettled.