Some vehicles have different tax rates than most.

Older Passenger Vehicles

A $10 tax applies, instead of the Motor Vehicle Sales Tax, if the vehicle meets both conditions:

• The vehicle is 10 years or older
• The sales price and average value is less than $3,000 

Collector Passenger Vehicles and Fire Trucks

A $150 tax applies, instead of the Motor Vehicle Sales Tax, to qualifying collector passenger vehicles and fire trucks.

Small Price Vehicle Transfer

When a vehicle is transferred at a small price, the Motor Vehicle Sales Tax is calculated on the average value of similar vehicles.

Motor Vehicles Not Registered in Minnesota

When the customer states they will register the vehicle in another state, you must verify the customer’s name and address listed on their driver’s license and the signed contract.

If you can verify this information, the sale is not subject to the Minnesota Motor Vehicle Sales Tax.

Vehicles Owned By a Non-Minnesota Business Entity

When a non-Minnesota business owns a motor vehicle that is operated by a Minnesota resident, it is presumed that the Minnesota resident is the owner of the motor vehicle when two or more of the following are true:

• The business lacks a specific business activity or purpose
• The business maintains no physical presence in the jurisdiction where it is organized
• The business earns de minimis or no revenue
• The business maintains minimal or no business records
• The business fails to employ individuals and does not provide W-2 wage statements
• The business does not file federal income tax returns or fails to file state income tax in the state they are organized

A motor vehicle is under the control of a Minnesota resident when the following conditions are met

• The vehicle is driven by a Minnesota resident
• The resident is a partner, member, or shareholder of the business entity
• The resident is insured to drive the vehicle
• Operates or stores the vehicle in Minnesota for any period of time

Lemon Law

Minnesota’s vehicle warranty statute, also known as Minnesota’s Lemon Law, helps protect buyers who buy or lease a new car, pickup truck, or van that is still under the original manufacturer’s warranty (See Minnesota Statute 325F.665).

For more information, call the Attorney General’s Office at 651-296-3353 or 1-800-657-3787.

If the vehicle qualifies for a refund under the Lemon Law, then the manufacturer is responsible for refunding the sales tax.

Gifted or Donated Vehicles

The motor vehicle sales tax applies to the fair market value of the vehicle at the time of the gift or donation. See the Driver and Vehicle Services of the Department of Public Safety website. 

Refunds

If you paid the Motor Vehicle Sales Tax in error on a vehicle, you may request a refund using a Claim for Motor Vehicle Refund form. This form is located on the Driver and Vehicle Services of the Department of Public Safety website.

The Minnesota Department of Revenue does not issue refunds for Motor Vehicle Sales Tax paid in error. 

Insurance Reimbursements

If your car is totaled and you receive reimbursement for the value of the vehicle, no sales tax refund is allowed.

Once a title is issued, the tax is not refundable unless it falls under the state Lemon Law.

Tribal Governments and Members

Vehicles sold to a tribal member (all 11 tribes) are not subject to the Motor Vehicle sales tax if the sale meets both of these conditions:

• the purchaser lives on the reservation
• the sale occurs on the reservation (A sale occurs on the reservation when papers are signed, payment is made, or the vehicle is delivered to the purchaser on the reservation.)

For more information, see Tribal Governments and Members.

Local Sales Tax