Agricultural Economics Department
Date of this Version
7-24-2019
Citation
agecon.unl.edu/cornhuskereconomics
Abstract
Nebraska property taxes are the tenth highest in the United States, sales taxes are the ninth lowest, and both income taxes and total state taxes are in the middle. Property taxes account for 38% of total state and local tax collections in Nebraska, the highest of any tax. Sales taxes are 29% of total tax collections, and income taxes are 26%. If property taxes, sales taxes and income taxes were equalized as sources of state and local revenue, property taxes would need to be reduced over $600 million.
Sixty percent of property taxes go to K-12 education funding. Nebraska state school aid is the second lowest in the United States, while the local share of K-12 school spending is the second highest.
Nebraska property taxes on agricultural land historically have been high in Nebraska relative to other states as a percent of net farm income. Since 1950, Nebraska property taxes on agricultural land are 46% higher than the United States average. In 2017 agricultural property taxes paid were 47% of Nebraska net farm income. When other taxes are taken into account this means that most Nebraska farmers or ranchers were paying 50-60% of their net farm income in taxes.