Motor Vehicle Tax

A. History - The motor vehicle tax replaced the property tax levied on motor vehicles beginning January 1, 1998. Under the pre-1998 system, motor vehicles were assigned a value by the Tax Commissioner based on average sales price for vehicles of that make, age, and model, and the local property taxing units of government merely assessed the rate against that value. Property taxes were paid by the owner at registration based on the rate assessed for the previous property tax year.

Under LB 271, passed in 1997 (NEB. REV. STAT. Sections 60-3001 et. seq.), the motor vehicle tax is still paid at the time of registration. However, the tax paid is now uniform throughout the state. The tax is derived from a table based on age and the manufacturer's rated weight of the motor vehicle, or in the case of passenger cars, manufacturers' suggested retail price.

B. Base and rate - The tax on any particular motor vehicle is the result calculated by multiplying the base rate of tax times a factor that declines with age. The following table sets out the reduction schedule for the motor vehicle tax followed by a listing of the base rate of tax.

MOTOR VEHICLE TAX SCHEDULE

Exemptions

Exempt from the imposition of the motor vehicle tax are vehicles owned by government, military personnel, disabled veterans, Native Americans subject to tribal registration, and charitable organizations, the same classes that were exempt under the property tax system. Interstate registered trucks are subject to interstate registration in lieu of local taxation and are, therefore, exempt from the motor vehicle tax. (NEB. REV. STAT. Section 77-3004.)

C. Administration and Disposition - County treasurers collect the motor vehicle tax and distribute the proceeds to cities, counties, and schools except that the county retains one percent of the taxes as an administrative charge. Sixty percent of the proceeds from the tax are distributed to the school system at the location where the motor vehicle is registered. Twenty-two percent goes to the county and 18 percent to the city, except for Douglas County where the city-county percentages are reversed. In Douglas County, 18 percent is retained by the county and 22 percent distributed to the appropriate city, including Omaha. If there is no municipality in the location where the motor vehicle is registered, the distribution is 60 percent to the school, 40 percent to the county.

Motor Vehicle Fee

A. History - Like the motor vehicle tax, the motor vehicle fee was the result of LB 271, passed in 1997. (NEB REV. STAT. Section 60-3007.) The motor vehicle fee was a smaller component of the combination tax and fee that replaced the property taxes on motor vehicles. It raises approximately eight percent of what the property tax on motor vehicles generated in 1997.

B. Base and Rate - Like the motor vehicle tax, the motor vehicle fee starts with a base fee that is subject to an age-related reduction schedule. The schedule has fewer levels and a lower starting point, but never becomes zero (unlike the motor vehicle tax). The reduction schedule and base fee are contained in the table below.

MOTOR VEHICLE FEE SCHEDULE

Year	Reduction Factor
1 - 5	1.00
6 - 10	.70
11 and over	.35
Base Fee
Passenger cars and trucks with a value when new of $20,000 - $39,000 - $40,000 and over -	$20  $30
Motorcycles -	$10
Cabin trailers and mobile homes -	$10
Trucks and buses -	$30
Trailers other than semi-trailers -	$10
Semi-trailers -	$30

NOTE: Passenger cars and trucks with a value when new of less than $20,000 are subject to a fee of $5.

Exemptions

Any vehicle exempt from the motor vehicle tax is exempt from the fee as well. (NEB. REV. STAT. Section 60-3007.)

C. Administration and Disposition - The motor vehicle fee is collected by the county treasurer at the time of registration and, less a one percent administrative fee, is returned to the state. The state distributes the proceeds to cities and counties in equal shares and in the same proportion as the distribution to cities and counties of the motor fuels tax. The motor vehicle fee proceeds are to be spent by cities and counties for road, street and bridge construction and maintenance and are considered local funds available to match state funds.