How to Calculate the Nebraska Sales Tax on Cars

Are you saving up to buy a car? Planning for the Nebraska sales tax on cars can be the difference that makes or breaks your transaction. Let’s take a look at how you might go about building your budget.

What is Sales Tax?

A sales tax is a consumption tax enacted by the state government on the sales of all goods and services.

Sales tax is collected by the retailer at the point of sale and then passed along to the state government. The sales tax changes from state-to-state, and can be increased further by the county that you are purchasing in.

Sales tax is calculated using the percentage of the item’s value that must be paid in addition to the full price of the item. In Nebraska, the sales tax percentage is 5.5%, meaning that you pay 5.5% of your vehicle’s value in addition to the total value of the car.

How Does Sales Tax Apply to Vehicle Sales?

Vehicles are considered by the IRS as a good that can be purchased, sold, and traded. Like all other goods, retailers are required to charge a sales tax on the sales of all vehicles. With a sales tax rate of 5.5% in Nebraska, this means you are paying an additional amount equal to 5.5% of the vehicle’s value at the point of sale.

This applies to the total value of the vehicle, not just the down payment amount, and is required at signing instead of being able to be paid off over time.

For example, say you are looking to purchase a vehicle with a total value of $20,000. 5.5% of $20,000 is equal to $1,100, meaning you pay a total of $21,100 at the point of sale. If you are financing this vehicle, this additional $1,100 fee still applies and is required alongside your down payment.

We hope that this guide has helped demystify the car-buying process a little. Have any lingering finance questions? Reach out to Woodhouse Nissan Bellevue’s finance department today for answers!