Cities and villages would be prohibited from levying municipal motor vehicle registration fees \u2014 commonly referred to as wheel taxes \u2014 under a bill receiving general file consideration Jan. 28.<\/p>\n
LB81, introduced by Bellevue Sen. Abbie Cornett, would prohibit metropolitan class cities from levying a motor vehicle registration fee on nonresidents. Cities and villages also would be prohibited from levying a tax on nonresident motor vehicles.<\/p>\n
Much of the discussion on the bill centered on an ordinance enacted by the city of Omaha in 2010. The ordinance requires individuals to pay a $50 fee if their vehicle is used more than 30 times a year to travel to a place of work within Omaha. The fee is collected and \u2014 after subtracting 4 percent for processing \u2014 remitted to the city by an individual’s employer.<\/p>\n
As introduced, LB81 would limit municipal licenses or occupation taxes to only those businesses and individuals living within city limits. This provision would be removed by a pending Revenue Committee amendment.<\/p>\n
Cornett said existing law could position cities against each other as they enact reactionary fees. LB81 would limit a city\u2019s ability to reach outside its municipal boundaries to tax people in another jurisdiction, she said.<\/p>\n
\u201cIf this statute is allowed to stand the way it is, you could see cities abutting against one another imposing a wheel tax,\u201d Cornett said. \u201cSo, an individual or a home could end up paying two or three wheel taxes or, theoretically, paying a wheel tax twice on the same vehicle.\u201d<\/p>\n
Omaha Sen. Heath Mello said a patchwork of city motor vehicle registration fees could lead to an \u201carms race,\u201d in which communities impose fees to counter fees enacted in other communities.<\/p>\n
Omaha Sen. Brad Ashford urged senators to delay the Jan. 1, 2011, operative date of LB81, which coincides with Omaha\u2019s fiscal year. The state has a precedent of not taking away local funding sources in the middle of city budget cycles, he said, and Omaha\u2019s budget woes due to the recession and pension liabilities would make the bill especially burdensome right now.<\/p>\n
\u201cLet\u2019s not put the city of Omaha in any more jeopardy than it already is,\u201d Ashford said. \u201cIf you are going to change the wheel tax, don\u2019t do it in the middle of a budget year. Give the city of Omaha time to react.\u201d<\/p>\n
Omaha\u2019s fiscal problems are a burden, Cornett said, but not one that should be placed on people who do not live in the city, especially given the city\u2019s relatively low property tax rate and generous use of tax increment financing, which she said has depleted its property tax base.<\/p>\n
York Sen. Greg Adams said taxes should be fair and easy to administer. In the case of nonresident motor vehicle registration fees, he said, their collection poses challenges.<\/p>\n
\u201cFor the life of me, I don\u2019t know how you\u2019re going to collect this,\u201d Adams said.<\/p>\n
Concern over fee collection is not a reason to vote for LB81, according to Omaha Sen. Brenda Council. She said Omaha has been collecting motor vehicle registration fees since 2006 from those living within three miles of the city limits.<\/p>\n
The Legislature adjourned before voting on either the committee amendment or the bill\u2019s advancement.<\/p>\n","protected":false},"excerpt":{"rendered":"
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