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When Do Local Vehicle Excise Taxes Apply?

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Vehicle excise tax must be collected by any person in the business of selling new or used motor vehicles at retail in certain areas.

Individuals, institutions, businesses, non-profit organizations, and state and local government agencies must pay the excise tax.

Businesses selling motor vehicles in a county or a city with a vehicle excise tax must collect a $20 tax on each vehicle and report it on their Minnesota sales and use tax return. They must collect the excise tax even if the buyer is not from Minnesota and will register the vehicle in another state.

All buyers must pay local vehicle excise taxes except for:

  • Federal government agencies
  • Vehicles not required to be licensed for road use (marked police cars, fire trucks, ambulances)
  • Vehicles for resale

The Minnesota Department of Revenue administers the vehicle excise tax for some counties. For information on the vehicle excise taxes we administer, see Local Sales and Use Taxes.

Some cities and counties administer their own excise tax. Contact your city or county for more information.

Note: This fee is not collected by the deputy registrar or the Driver and Vehicle Services of the Department of Public Safety.