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Nebraska

The Facts on Nebraska’s Tax Climate

Last updated July 1, 2009

Here are some basic facts on Nebraska’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 8 in Nebraska
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Nebraska taxpayers had to work until April 8 to pay their total tax bill, ranking it 31st in the nation. This is five days before national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states are: South Dakota, March 29 (ranked 47th nationally); Iowa, April 4 (ranked 39th nationally); Missouri, April 6 (ranked 34th nationally); Kansas, April 8 (ranked 30th nationally); Colorado, April 12 (ranked 16th nationally); and Wyoming, April 5 (ranked 35th nationally).
Full study of Tax Freedom Day, nationwide and in each state

Nebraska's State/Local Tax Burden Slightly Above National Average
Estimated 9.8% of income, Nebraska's state and local tax burden percentage stands at 17th highest, just above the national average of 9.7%. Nebraskans pay $3,983 per capita in state and local taxes.
Nebraska's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

Nebraska's 2010 Business Tax Climate Ranks 33rd
Nebraska ranks 33rd in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: South Dakota (1st), Iowa (46th), Missouri (16th), Kansas (32nd), Colorado (13th) and Wyoming (1st).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)

Nebraska's Individual Income Tax System
Nebraska's personal income tax system consists of four separate brackets with a top rate of 6.84%, kicking in at an income level of $27,000. Among states levying an individual income tax, Nebraska's top rate ranks 17th highest nationally. Nebraska's 2006 individual income tax collections were $878 per person, which ranked 21st highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita 

Nebraska's Corporate Income Tax System
Nebraska's corporate tax structure consists of two brackets with a top rate of 7.81%, kicking in at an income level of $100,000. Among states levying corporate income taxes, Nebraska's top rate ranks 19th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $120 per capita, which ranked 36th highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita 

Nebraska Levies Sales Tax at National Median
Nebraska levies a 5.5% general sales or use tax on consumers, which is below the national media of 6%. State and local governments combined collected approximately $937 per capita in general sales taxes in 2006, ranking 28th highest nationally. Nebraska's gasoline tax is a variable tax that is adjusted for inflation on a quarterly basis. The gasoline tax currently stands at 27.3 cents per gallon and ranks 19th highest nationally. Nebraska's cigarette tax stands at 64 cents per pack of twenty, ranking 37th highest nationally. The sales tax was adopted in 1967, the gasoline tax in 1925 and the cigarette tax in 1947.
50-State Table of Sales and Excise Tax Rates
50-State Table of  State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita

Nebraska Property Taxes: Comparatively High
Nebraska is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Nebraska's localities collected $1,268.72 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Nebraska collected $1.41 per capita during FY 2006, making its combined state/local property taxes $1,270.13 per capita, ranking 17th highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Nebraska is a Beneficiary State
Nebraska taxpayers receive more federal funding per dollar of federal taxes paid compared to the average state. Per dollar of Federal tax collected in 2004, Nebraska citizens received approximately $1.10 in the way of federal spending. This ranks the state 25th highest nationally and represents an increase from 1995, when Nebraska received $1.01 per dollar of taxes in federal spending (30th highest). Neighboring states and the amount of federal dollars they received per dollar collected in federal taxes were: South Dakota ($1.53), Iowa ($1.10), Missouri ($1.32), Kansas ($1.12), Colorado ($0.81) and Wyoming ($1.11).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

 

Tax Data from The Tax Foundation