Complaints about Nebraska’s car taxes may pale compared to the outcry about property taxes.
But Omaha State Senator Robert Hilkemann heard many complaints from patients at his podiatry practice who recently moved to Nebraska and suffered sticker shock while licensing their vehicles.
So he proposed LB82, which would lower vehicle taxes for most drivers.
“I am not doing this for a lobby group,” said Hilkemann on Tuesday. “I’m doing that for the 1.3 million drivers who pay this tax. We are very high on this tax.”
However, as mentioned earlier, his bill would add $ 60 million in annual sales to schools, cities, and counties while adding $ 25 million in state school aid costs. The price tag raised objections from counties and cities.
Hilkemann said at a public hearing before the Transport and Telecommunications Committee that Nebraska ranks in the five to ten states when it comes to the cost of motor vehicle registration. He also said he had several problems with the structure of taxes.
The state law determines the property tax based on the manufacturer’s recommended retail price. According to federal law, vehicle manufacturers must create every car, truck and SUV. Actual tax is calculated using a multiplier that starts at 100% for the first year and then goes down to zero for every vehicle aged 14 and over.
However, Hilkemann said that nowadays, between advertising contracts and negotiations, few people pay MSRP for new vehicles. A 2021 V6 all-wheel drive Chevrolet Blazer might be marked $ 37,445 or more, but it will sell for $ 35,195. In the end, drivers pay vehicle taxes on an artificial value.
Next, the multiplier drops 10% per year for the first five years, which in his view does not reflect a vehicle’s actual depreciation.
“I don’t know anything about you, but I haven’t owned a vehicle that only depreciated 10% in the first year,” said Hilkemann.
Nebraska now pays no road tax on more than 1 million vehicles as they hit the 14-year mark, he said. Those older vehicles include the mint condition 1967 Chevy Camaros and the rusty 1997 Dodge Dakotas. He said Nebraska is the only state in the region that does not have a minimum fee for all vehicles.
Hilkemann said he will work to eliminate the cost of the bill. He said he thinks the tax structure could be improved and the bill made revenue neutral by lowering tax costs for new vehicles and including minimum fees for older vehicles.
Jack Cheloha, an Omaha City lobbyist, said he would like to look for alternatives. However, as introduced, he said LB82 would cost Omaha $ 1.5 million annually.
“That’s a significant dollar amount,” he said.
MEET NEBRASKA’S STATE SENATORS
Mike Flood
District 19
Mike Flood
Norfolk
Elected 2020
402-471-2929
Terrell McKinney
District 11
Terrell McKinney
Omaha
Elected 2020
402-471-2612
Tom Brewer
District 43
Tom Brewer
Gordon
Elected 2016, 2020
402-471-2628