Motor vehicle tax exemption proposed for military members

Members of the Transportation and Telecommunications Committee heard testimony Jan. 27 on a bill that would expand an existing motor vehicle tax exemption.

Currently, active duty military members who are stationed in Nebraska but are residents of another state are exempt from paying the state motor vehicle tax.

LB842, sponsored by Bellevue Sen. Sue Crawford, also would exempt Nebraska residents who are active duty military members—and their spouses—from the state motor vehicle tax.

Crawford said the bill would correct the disparity between residents and nonresidents so that all service members have the same access to the tax exemption.

“Why shouldn’t our active duty service members who are Nebraska residents have the same benefits as those who are stationed at Offutt [Air Force Base]?”

Ryan McIntosh, representing the National Guard Association of Nebraska, supported the bill. He said there are 580 active service members in Nebraska currently who are not receiving the tax exemption because they are Nebraska residents.

“This is important legislation because it would help to incentivize service members who are stationed here to become Nebraska residents,” McIntosh said.

Opposing the bill was Jon Cannon, representing the Nebraska Association of County Officials. Nebraska’s counties already are faced with a lack of revenue, he said, and LB842 would exacerbate that situation.

“No matter how small or insignificant it may seem, this is an erosion of our tax base,” Cannon said. “As far as counties are concerned, there are no other places to go [for revenue] except for property taxes.”

The committee took no immediate action on the bill.