Nebraska Online Vehicle Tax Estimator Gives Citizens Tax and Fee Estimates

Nebraska public-private collaboration helps consumers estimate costs before automobile purchases.

by / April 27, 2009 0

Buying a vehicle is obviously a tough decision. Not only must consumers worry about the upfront cost, but sales taxes and registration fees can also blind-side the unprepared. Fortunately for buyers in Nebraska, the state government helps take some of the mystery out of car shopping.

In October 2005, the Nebraska Department of Motor Vehicles launched the Online Vehicle Tax Estimator, an application that lets users preview what they're in for if they make the purchase. The site is a Web form where people submit vehicle information, including the vehicle's year, identification number, purchase date and price, and the buyer's city and county of residence. The application then returns an estimate of the taxes and fees for the vehicle. A back-end module performs the calculations based on users' entries. The process takes only a few minutes.

"It's key to make sure that the consumers or the people that we'll be interfacing with understand all of the expenses related with purchasing that vehicle, and the registration and titling of that vehicle," said Keith Dey, manager of the DMV's Information Systems Division. "By allowing them to go online and see what the personal property tax bill is estimated to be, it helps them have a clear picture and make better purchasing decisions."

Nebraska's motor vehicle tax and fee system was implemented in 1998. Before that, citizens paid a state property tax levied annually at registration time. The tax commissioner assigned a value based on the average sales price of each vehicle's make, year and model, and then local governments determined a vehicle's tax rate against that value.

Today citizens pay both the tax and fee during registration, and the tax proceeds are shared among the city, county and school system where the vehicle was registered. Taxes decrease on a vehicle during its first 14 years, and then the owner pays nothing. But fees must be paid throughout a vehicle's life. The taxes and fees vary depending on a vehicle's weight, type and the manufacturer's suggested retail price etc. They apply not only to cars, but also to trucks, farm vehicle sand motorcycle owners.

With all this information to consider, it's no surprise citizens have questions for their county treasurers and the DMV. But the online estimator spares them from asking as often and cuts down the workloads for state and county employees.

"We've tried to give the citizens the opportunity to access information 24/7," said Beverly Neth, director of the DMV. "They don't rely upon us being here to answer the phone [and it] frees up our staff."

In 2007, the Nebraska Office of the Chief Information Officer nominated the estimator for the year's best government-to-citizen application in the National Association of State Chief Information Officers (NASCIO) Recognition Awards. According to the submission, staff in county offices and the DMV reported receiving fewer calls from people requesting tax and registration estimates. County and state staff saved about 160 hours per month between the 2005 launch date and 2007.

The state receives comments and inquiries about the system through the DMV's Web site, Neth said.

"We've added a survey, so we're asking people, 'What kind of services are you accessing when you're on our Web site?' And lots of times, we're hearing, 'I use the Motor Vehicle Tax Estimator,' or 'I'm looking for it,'" she said.

 

How Things Came to Be

The application is managed by Nebraska Interactive, a subsidiary of NIC, a company that builds e-services for government clients. According to Nancy Beaton, NIC director of communications and investor relations, the company has relationships with 21 of 22 states that outsource their enterprise portals and is responsible for about 38,000 electronic applications. Nebraska

Interactive has worked with Nebraska for 15 years and provides hundreds of applications for its agencies, including the DMV.

Nebraska Interactive provides the Online Vehicle Tax Estimator to the state free-of-charge thanks to NIC's self-funded model of revenue.

"The way that we make our money is that we incur all of the upfront costs, so there are no taxpayer dollars in the states, and then there's typically a transaction or a convenience fee for each of the revenue-generating services that we put online," Beaton said.

NIC, through its subsidiaries in states, provides revenue- and nonrevenue-generating applications, and enterprise portals. The revenue-generating applications require users to pay to renew professional licenses, make filings or look up certain information. The money these services bring in subsidizes free ones, like Nebraska DMV's Online Vehicle Tax Estimator.

NIC subsidiaries manage their respective operations.

"We're responsible for all the security," Beaton said. "We build the application, monitor it, and then we report monthly back to the agency or the oversight board that is our partner in that state."

The Nebraska DMV created a strategic business plan in 2000, a component of which focused on deploying more e-government solutions to citizens. This led to discussions with Nebraska Interactive, which was already responsible for Nebraska.gov and other state Web applications, about the types of projects the agency wanted to create.

"Since we were new to e-government concepts, we decided we'd pick some smaller projects that we thought we could achieve fairly quickly," Neth said. The tax estimator was one of these smaller projects, and its implementation began in February 2005. "Because NIC already had an interface to our motor vehicle systems, we were able to, within a six-month time frame, identify the statement of work, develop the functional specs and have NIC program the system. Then we did some testing internally, and then released it to the general public."

The Online Vehicle Tax Estimator has been used frequently by Nebraskans since being released. According to the 2007 NASCIO submission, the application performed an average of 3,200 estimates a month between 2005 and 2007. Hoffman said 68,000 people used the system in 2008.

 

Behind the Scenes

Nebraska's online tax estimator requires coordination between government tax experts and IT personnel in both the DMV and Nebraska Interactive, especially when county tax laws change. When necessary, members of the DMV's IT department serve as liaisons between nontechnical government staff and Nebraska Interactive developers to articulate the necessary updates.

"If a city is going to go out and put in a new sales tax, we're tracking that internally, so once we know that sales tax or that wheel tax modification has happened, then we have a process in place where we contact the Nebraska Interactive staff and say we need to make these changes," Neth said. Wheel taxes are local taxes that are required in some areas in addition to the state vehicle tax and fees. Not all Nebraska regions levy a wheel tax.

If a user has a technical problem with the estimator and calls the DMV about it, that request usually winds up at the Information Services Division help desk, where staff determine if DMV IT or Nebraska Interactive will handle it.

"One of my staff will evaluate whether it's a problem related to our data internally, or to the interface application itself," Dey said. "If it's the interface application, then we call directly to the developer or developers that have worked on the system and explain to them what we believe it to be, and then the problem gets resolved in that fashion."

According to Brent Hoffman, general manager of Nebraska Interactive, the application was written in Perl. The company interfaces with the DMV's vehicle and title registration system on a distributed network of IBM AS400

servers for supporting various front-end applications like the tax estimator. The vehicle and title registration system comprises information from all 93 Nebraska counties.

 

Just the Beginning

Other than tax and other informational updates, the tax estimator hasn't changed since its debut years ago - there's been no need.

"If a community adds a sales tax, we'll update the sales tax information, or if a city's or county's wheel tax rate changes, we'll update that data. But for the most part, it's had the same look since 2005," Neth said.

Although the estimator nails estimations down to the penny at times, citizens shouldn't be quick to write checks based on the estimates alone, she said. The application provides a clearer picture of what to expect, but people should still exercise caution after using it.

Major changes to the estimator aren't foreseen although as technology changes, there may be modifications to the network or other back-end systems to improve application performance. And when it comes to e-services, the DMVs' certainly not done.

"For online services in general, we've just started to scratch the surface of what we're going to make available. We've just now developed our way of doing business," Dey said. The partnership and e-government efforts will allow the Nebraska DMV to put more applications and information online for customers in the future.

Hilton Collins

Hilton Collins is a former staff writer for Government Technology and Emergency Management magazines.