Kate Schubel
Nebraska state tax: Overview
Nebraska state tax might not be the most appealing for homeowners. That's because property taxes in Nebraska are higher than the national average.
The Cornhusker State also imposes a hefty inheritance tax (for many types of heirs). However, not all taxes in Nebraska are high. For example, some residents will pay less income tax in 2024 due to a gradual reduction of the state's top income tax rate through 2027.
In the news: Nebraska’s creeping property tax rate has been the subject of much discussion lately. High property taxes and rising inflation have spurred conversation about the best way to reduce property tax bills.
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Some of these initiatives, involving taxes on ammunition and marijuana, could make their way onto the state's November ballot. For more information, see High Property Tax for Nebraskans Sparks Marijuana and Ammo Tax Bills.
In August, state lawmakers finally reached a deal on property tax relief. See Nebraska Finally Has Property Tax Relief for more information.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Nebraska income taxes
Nebraska Income Taxes: Married filing separately and single filers
| Up to $2,999 | 2.46% |
| $3,000 to $17,999 | 3.51% |
| $18,000 to $28,999 | 5.01% |
| More than $28,999 | 5.84% |
Nebraska Income Taxes: Married filing jointly
| Up to $5,999 | 2.46% |
| $6,000 to $35,999 | 3.51% |
| $36,000 to $57,999 | 5.01% |
| More than $57,999 | 5.84% |
Nebraska Income Taxes: Head of household
| Up to $5,599 | 2.46% |
| $5,600 to $28,799 | 3.51% |
| $28,800 to $42,999 | 5.01% |
| More than $42,999 | 5.84% |
Nebraska tax on retirement income: Nebraska no longer taxes Social Security retirement benefits.
Military retirement income and Railroad Retirement benefits are tax-exempt.
Nebraska sales tax
Nebraska has a 5.5% state sales tax rate. Localities can add as much as 2%, and the average combined rate is 6.97%, according to the Tax Foundation.
- Groceries are tax-exempt.
- Prescription drugs are tax-exempt.
- Women's menstrual products are tax-exempt.
- Diapers are taxable*
*Note: legislation passed in May 2024 enacts a sales tax exemption for diapers effective July 1, 2027.
How much are property taxes in Nebraska?
In Nebraska, the average effective property tax rate is 1.44%, which is higher than in most states.
Nebraska Property Tax Breaks for Retirees
Homestead Exemption: Nebraska homeowners 65 and older and those with disabilities may qualify for homestead exemption. The income thresholds for homeowners 65 and older and those who qualify based on disability status differ. Nebraska residents can view the Homestead Exemption Information Guide to see if they qualify.
Nebraska gas taxes (motor fuel)
Gasoline: $0.296 per gallon
Diesel: $0.30 per gallon.
Nebraska taxes on alcohol and tobacco
| Cigarettes | $0.64 per pack |
| Other tobacco products | 20% of wholesale price |
| Beer | $0.31 per gallon |
| Wine | $0.95 per gallon |
| Liquor | $3.75 per gallon |
Nebraska estate and inheritance taxes
Nebraska is one of the six states with an inheritance tax. Spouses are off the hook from paying the tax, but other heirs could get a hefty tax bill.
- Children, parents, grandchildren, siblings, and grandparents are subject to a 1% tax on inheritances over $100,000.
- Aunts, uncles, nieces, and nephews pay an 11% tax on inheritances over $40,000.
- Other heirs are responsible for a 15% inheritance tax on amounts over $25,000.
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