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Texas vs Nebraska on Taxes, Products and Life

Posted on Dec 3, 2015 by Paul White

Recently my family and I traveled back home ( Nebraska ) to visit family for the holidays.  At times we have considered moving back to be close to family, but then we start to compare the two locals, and determine we are ok living just south of Houston.  For those of you who ever wondered how the two places compare here is a simple comparision between the two.

Vehicle Taxes

The first thing I noticed in Nebraska, is that most cars were older than 5 years.  Rarely did you see new cars driving around nebraska, and even more rare was imports like Honda, Toyota, BMW.  In Houston everyone ( except me ) has a brand new shiny car.  There is a very good reason for this.  Taxes.  In Texas all vehicles only have to pay about $70 per year in registration fees.  Doesn't matter if you are driving a 20 year old beater, or a brand new $80k luxury sedan.  There are no property taxes on vehicles in Texas.  Nebraska however does charge Property Taxes on vehicles newer than 14 years.  The taxes you pay are based on the vehicles MSRP, and then its depreciated value each year up to 14 years.  To give you a comparision a $40K car in its first year will have $700 of annual taxes, second year $630, Third year $560, and so on.  Also in Nebraska if you drive a car that is battery powered you have to pay $75 annually to makeup for the lack of fuel taxes you will be paying.  

Fuel Costs

When I was there in November a Gallon of regular gasoline cost about $1.90 / gallon. At the same time the cost in Houston was about $1.65 / gallon.  Texas has lower fuel taxes.  Of course in Houston we don't have snow plows, or any vehicles dedicated for de-icing the roads, so this Tax isn't exactly for nothing.

Vehicle Insurance

Insurnance rates vary a lot by zip code. When we lived in Midtown our rates doubled from what they were in Nebraska. When we moved to the suburbs, they dropped, but they were still more expensive than Nebraska.  It makes sense too as in Nebraska driving around the traffic is pretty thin.  When I used to drive a motorcycle in Nebraska I felt very safe driving around.  In Houston you don't get that safe feeling.

Cost of Food

Food in Nebraska was more expensive, plus there are very limited options when it comes to organic Non-GMO produce.  I am not saying consumers in Nebraska are not mindful of what they eat, but they don't feel the need to spend double or tripple for what they see as the same thing.  The result is not much demand for premium produce.  For example I can buy an organic head of iceberg lettuce in Houston for about $2.  The same head in Omaha was $4.50.  

Sales Tax

Sales Tax in Texas is 8.25% after all the county and city governments get their share.  In Nebraska its 7.0%

State Income Taxes

Texas has no state income Taxes.  Nebraska has a progressive tax that varies from 2.46 % for income up to $3K to 6.84% for income over $29K / year for single persons.

Corporate Taxes

Texas has no Corporate Taxes, Nebraska's corporate taxes are 5.58% for all income under $100K, and 7.81% of all income over $100k


This is one of biggest differences between the two states.  In Texas, Sales of Alcohol is heavily regulated, with some cities even banning the sale of anything stronger than Beer.  Even where I currently live in Pearland, just a few years ago finally got the right to sell Wine at the Grociery Stores, and we are still fighting to get some decent bars in town. Unfortunately Pearland requires any establishment that sells mixed drinks to get at least 51% of their revenue from Food sales.  I can't even buy Wine after midnight at the grociery store where I live.  The only places you will find hard liquor is in a liquor store.  Nebrasaka on the other hand Liquor couldn't be more available to consumers.  Every Gas Station has a liquor Isle.  Walmart, and Target both sell Liquor with an entire isle dedicated to the stuff, even Everclear.  Of course in Nebraska there is not much to do, and it gets cold, so drinking is almost a social must for survival.  Starting a Business to sell liquor is even more different.  In Nebraska from what I can tell it costs about $300 to get a license.  In Texas it costs about $10K.  









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