Motor vehicle tax for 14- to 20-year-old vehicles considered

Owners of older vehicles would be subject to the state motor vehicle tax under a bill heard by the Revenue Committee Feb. 10.

Current law requires that owners of vehicles 13 years old and newer pay a motor vehicle tax that is calculated using a base tax tied to the vehicle’s retail value. Owners of new vehicles pay the full base tax, while owners of 13-year-old vehicles pay 7 percent of the base tax. Those whose vehicles are older than 14 years do not pay the motor vehicle tax.

LB505, introduced by Wilber Sen. Russ Karpisek, would require owners of vehicles aged 14 to 20 years to pay 3 percent of the base tax. The bill also would direct 0.25 percent of motor vehicle tax proceeds to the State Patrol Retirement Fund.

Karpisek said drivers of older cars use the roads and should contribute to their maintenance through the motor vehicle tax. The retirement fund allocation is needed to avoid general fund appropriations, he said, because the state is required to fully fund the defined benefit retirement program.

“[LB505 would send] money over to the retirement system for the state patrol, because we have been having some shortfalls due to the market,” Karpisek said.

Korby Gilbertson, representing the State Troopers Association, testified in support of LB505. She said the retirement program receives funding from four different sources, which include general fund appropriations if funds are not sufficient.

No one testified in opposition to the bill and the committee took no immediate action on it.