Yes, Nebraska does have state taxes. The state collects individual income tax, a 5.5% sales tax (with local add-ons), property tax administered at the county level, and an inheritance tax that only a handful of states still impose. There are also excise taxes on fuel, cigarettes, and spirits, plus a corporate income tax and an annual motor vehicle tax. Here’s what each one looks like in practice.
Income Tax
Nebraska taxes residents on all their income and non-residents on income earned in the state. The system is progressive. For the 2024 tax year, four brackets applied, with rates of 2.46%, 3.51%, 5.01%, and 5.84%.1Nebraska Department of Revenue. 2024 Nebraska Tax Calculation Schedule for Individual Income Tax Rates have been dropping each year under recent legislation. The Department of Revenue’s 2026 withholding schedule shows six brackets with rates from 2.26% at the bottom to 4.60% at the top,2Nebraska Department of Revenue. 2026 Nebraska Circular EN and further reductions are scheduled through 2027.3Nebraska Legislature. Legislative Bill 873
Nebraska offers a standard deduction that varies by filing status and adjusts for inflation each year. If you itemize on your federal return, you can itemize on your Nebraska return as well. The filing deadline matches the federal April 15 date for calendar-year filers, moving to the next business day when the 15th falls on a weekend or holiday.4Nebraska Department of Revenue. Nebraska Tax Calendar
Social Security and Retirement Income
Starting with the 2025 tax year, Social Security benefits are fully exempt from Nebraska income tax under LB 873.3Nebraska Legislature. Legislative Bill 873 Military retirement pay is also fully exempt.5Nebraska Department of Revenue. Individual Income Tax FAQs Other retirement income — pensions, IRA withdrawals, and 401(k) distributions — is generally taxed at normal rates. Nebraska does not offer a blanket exclusion for private-sector retirement income.
Sales and Use Tax
The state sales tax rate is 5.5% on retail goods and many services. Cities and counties can add local sales tax on top, and combined rates reach as high as 8% in some jurisdictions.6Nebraska Department of Revenue. Local Sales and Use Tax Rates If you buy a taxable item and the seller doesn’t collect Nebraska sales tax (common with some out-of-state online purchases), you owe use tax at the same combined rate for your location.
Several categories are exempt. Grocery food and food ingredients sold for home preparation are not taxed, though prepared food and vending machine sales are.7Nebraska Legislature. Nebraska Code 77-2704.24 – Sales and Use Tax Exemptions, Food and Food Ingredients Prescription drugs and certain agricultural equipment are also exempt. Larger online retailers and marketplace platforms are required to collect Nebraska sales tax once they cross state thresholds, so for most online shopping, the tax is already added at checkout.
Property Tax
Property tax is Nebraska’s main local tax, funding counties, cities, school districts, and other local entities. There’s no single statewide rate; what you pay depends on where you live.
Real property is assessed at or near 100% of market value, with one notable exception: agricultural and horticultural land is assessed at 75% of actual value. Values are set as of January 1 each year.8Nebraska Department of Revenue. Nebraska Property Assessment FAQs Payment is split into two installments: the first half is due April 1 and the second half August 1.9Nebraska Department of Revenue. Property Assessment and Taxation Calendar
Homestead Exemption
Nebraska offers a homestead exemption that can meaningfully reduce property taxes for qualifying homeowners. Eligibility generally requires being age 65 or older, a qualified disabled individual, or a qualified disabled veteran (or surviving spouse of one). The exemption amount depends on household income and home value, calculated on a sliding scale. Applications go to your county assessor between February 2 and June 30.10Nebraska Department of Revenue. Tax Year 2026 Homestead Exemption
Inheritance Tax
Nebraska is one of only a few states that still collects an inheritance tax. Unlike an estate tax, which the estate itself pays, the inheritance tax is owed by the person receiving property, and the rate depends on their relationship to the deceased. It’s collected at the county level, and inherited property generally can’t be transferred until the tax is settled.
- Surviving spouses and beneficiaries under age 22 are fully exempt.11Nebraska Legislature. Nebraska Code 77-2004 – Inheritance Tax, Rate, Transfer to Immediate Relatives, Exemption
- Close relatives (parents, children, siblings, grandparents, grandchildren, and their spouses) pay 1% on amounts above $100,000. This category also includes anyone the deceased raised as a parent for at least ten years.
- Remote relatives (aunts, uncles, nieces, and nephews by blood or legal adoption) pay 11% on amounts above $40,000.
- All other beneficiaries pay 15% on amounts above $25,000.
Other Taxes You May Encounter
Nebraska levies excise taxes on specific products, usually built into the purchase price. The motor fuel tax is 31.8 cents per gallon for the first half of 2026 and adjusts periodically.12Nebraska Department of Revenue. Fuel Tax Rates Cigarettes carry a $0.64 tax per pack of 20.13Nebraska Department of Revenue. Information for Cigarette and Tobacco Products Retailers Spirits are taxed at $3.75 per gallon.14Nebraska Legislature. Nebraska Code 53-160 – Excise Tax on Alcoholic Beverages
Businesses pay a corporate income tax with a two-bracket structure: a lower rate on the first $100,000 of taxable income and a higher rate above that. Both rates have been declining, with the top rate scheduled to reach 5.84% by 2027.3Nebraska Legislature. Legislative Bill 873
When you register a vehicle, you pay a motor vehicle tax based on the manufacturer’s suggested retail price. It’s assessed at initial registration and each year after until the vehicle turns 14, with the percentage of the base tax decreasing as the car ages.15Nebraska Department of Motor Vehicles. Registration Fees and Taxes
What Happens If You File or Pay Late
The late-filing penalty on Nebraska income tax is 5% of the unpaid tax for each month the return is overdue, capped at 25%.5Nebraska Department of Revenue. Individual Income Tax FAQs Interest also accrues on unpaid balances at 8% per year for the 2025–2026 period.16Nebraska Department of Revenue. Interest Rate Assessed on State Taxes A filing extension gives you more time to send in the return, but it does not extend the payment deadline. If you expect to owe, pay by April 15 even if you can’t finish the return in time.