Miscellaneous Motor Vehicle Sales

Some motor vehicle sales have different tax rates.

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 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, see Lemon Law - MN Car Laws on the Attorney General’s Office website.

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.