Nebraska gas tax reduced slightly through end of 2021

Starting today, Nebraskans will be paying slightly less tax on a gallon of gas. Every six months, the state Department of Revenue reevaluates the motor fuel tax. The overall gas tax is decreasing from 28.7 cents per gallon to 27.7 cents per gallon.

This comes after a 4.5 cent decline at the beginning of the year.

Nebraska’s gas tax collects revenue allocated towards the construction, repair, and maintenance of roads and bridges in Nebraska. The total cost of the tax is determined in three separate parts. Here’s how the tax is calculated, and how much each part is changing for the rest of 2021.

• The Fixed Rate: This part of the tax is set by Nebraska statute and stays the same until otherwise changed by law. It will remain at 16.3 cents per gallon.
• The Wholesale Rate: Calculated from 5% of the average wholesale cost of fuel in the last six-months. This rate will decline from 8.5 cents to 7.5 cents per gallon.
• The Variable Rate: This rate is variable because it is set to meet the cost of legislative appropriations for transportation. It will remain at 3.9 cents per gallon.

The newly-calculated rate of 27.7 cents is the lowest the gas tax has been since 2017, when the motor fuel tax was 27 cents per gallon. In 2015, the Nebraska Legislature approved a gradual increase in the fixed rate portion of the gas tax. Since then, the tax has ranged from a low of 25.8 cents in the second half of 2016 to a high of 33.2 cents per gallon in the second half of 2020.