Dealer-Owned Vehicle


When you use a vehicle purchased for resale, for a purpose other than for demonstration, you owe use tax on the reasonable rental value or sales tax on the vehicle’s full value.

For more information on the reasonable rental value, see Revenue Notice 05-05: Sales and Use Tax-Definition of Reasonable Rental Value of Motor Vehicles.

Use Tax

If you buy equipment, supplies, or other taxable items for your business and the seller does not charge Minnesota sales tax, you owe use tax on the cost of the items. If your business is located in an area with a local tax, you may also owe local use tax.

Some common situations where you may owe use tax include:

  • You buy taxable items or services online without paying sales tax
  • You withdraw an item from inventory to use (instead of selling it), donate, or give away
  • You buy taxable items outside of Minnesota
  • You buy taxable items in another Minnesota city or county with a lower (or now) local sales tax

For more information, see Use Tax for Businesses and Local Sales and Use Taxes.