State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

Nebraska State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Nebraska

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The Bottom Line
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Least Tax-Friendly

While the cost of housing is comparatively low in the Cornhusker State, the median property tax rate in the state is quite high. In fact, the statewide average tax on a home in Nebraska is the ninth-highest in our U.S. rankings. Since sales taxes and income taxes are fairly close to average, property taxes are the primary reason why Nebraska is our list of least tax-friendly states for middle-class families.

Income Tax Range

Low: 2.46% (on up to $3,340 of taxable income for single filers and $6,660 for married couples filing jointly)

High: 6.84% (on taxable income over $32,210 for single filers and $64,430 for married couples filing jointly)

Beginning in 2023, the top rate is gradually reduced according to the following schedule: 6.64% in 2023, 6.44% in 2024, 6.24% in 2025, 6% in 2026, and 5.84% in 2027 and thereafter.

Sales Tax

5.5% state levy. Localities can add as much as 2.5%, and the average combined rate is 6.94%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In Nebraska, the median property tax rate is $1,684 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 25.7¢ per gallon.
Diesel: 25.1¢ per gallon.

Sin Taxes

Cigarettes and many little cigars: $0.64 per pack
Moist snuff: $0.44 per ounce
Other tobacco products: 20% of the wholesale price

Beer: $0.31 per gallon
Wine: $0.95 per gallon
Liquor: $3.75 per gallon

Annual Car Taxes and Fees

An annual vehicle excise tax based on the car's sticker price (MSRP) and age is imposed until the vehicle is 14 years old.

Estate and Inheritance Taxes

With Nebraska's inheritance tax, the closer the heir's relationship to the decedent, the smaller the tax rate and the greater the exemption (surviving spouses are exempt from the tax). For example, the tax on heirs who are immediate relatives (e.g., parents, grandparents, siblings, children and other lineal descendants) is only 1% and does not apply to property that is worth less than $40,000 ($100,000 beginning in 2023). For remote relatives (e.g., uncles, aunts, nieces, nephews), the tax rate is 13% and the exemption amount is $15,000 (11% and $40,000, respectively, beginning in 2023). For all other heirs, the tax is imposed at an 18% rate on property worth $10,000 or more (15% and $25,000, respectively, beginning in 2023). However, regardless of the heir's relationship to the decedent, the state's inheritance tax does not apply to heirs 21 years of age or younger.