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A bill for an act
relating to transportation; modifying motor vehicle registration tax; providing a
registration tax rebate; appropriating money; amending Minnesota Statutes 2025
Supplement, section 168.013, subdivision 1a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2025 Supplement, section 168.013, subdivision 1a, is
amended to read:
Subd. 1a.
Passenger automobile; hearse.
(a) On passenger automobiles as defined in
section
168.002, subdivision 24
, and hearses, except as otherwise provided, the registration
tax is calculated as $10 plus:
(1) for a vehicle initially registered in Minnesota prior to November 16, 2020, 1.54
percent of the manufacturer's suggested retail price of the vehicle and the destination charge,
subject to the adjustments in
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paragraphs
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paragraph
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(e)
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and (f)
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; or
(2) for a vehicle initially registered in Minnesota on or after November 16, 2020, 1.575
percent of the manufacturer's suggested retail price of the vehicle, subject to the adjustments
in
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paragraphs
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paragraph
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(e)
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and (f)
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.
(b) The registration tax calculation must not include the cost of each accessory or item
of optional equipment separately added to the vehicle and the manufacturer's suggested
retail price. The registration tax calculation must not include a destination charge, except
for a vehicle previously registered in Minnesota prior to November 16, 2020.
(c) The registrar must determine the manufacturer's suggested retail price:
(1) using list price information published by the manufacturer or any nationally
recognized firm or association compiling such data for the automotive industry;
(2) if a dealer does not determine the amount, using the retail price label as provided by
the manufacturer under United States Code, title 15, section 1232; or
(3) if the retail price label is not available, using the actual sales price of the vehicle.
If the registrar is unable to ascertain the manufacturer's suggested retail price of any registered
vehicle in the foregoing manner, the registrar may use any other available source or method.
(d) The registrar must calculate the registration tax using information available to dealers
and deputy registrars at the time the initial application for registration is submitted.
(e) The amount under paragraph (a), clauses (1) and (2), must be calculated based on a
percentage of the manufacturer's suggested retail price
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, as follows:
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or at an identified amount,
as specified in the following tax devaluation schedule.
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(1) during the first year of vehicle life, upon 100 percent of the price;
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(2) for the second year,
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95
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percent of the price;
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(3) for the third year,
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90
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percent of the price;
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(4) for the fourth year,
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80
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percent of the price;
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(5) for the fifth year,
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70
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percent of the price;
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(6) for the sixth year,
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60
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percent of the price;
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(7) for the seventh year,
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50
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percent of the price;
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(8) for the eighth year,
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40
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percent of the price;
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(9) for the ninth year,
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25
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percent of the price; and
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(10) for the tenth year, ten percent of the price.
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Tax Devaluation Schedule
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Year of
vehicle life
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MSRP under
$50,000
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MSRP
$50,000 to
$75,000
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MSRP over
$75,000
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First year
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100 percent
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100 percent
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100 percent
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Second year
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90 percent
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95 percent
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100 percent
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Third year
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80 percent
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90 percent
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95 percent
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Fourth year
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70 percent
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80 percent
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90 percent
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Fifth year
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50 percent
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70 percent
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85 percent
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Sixth year
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40 percent
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60 percent
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80 percent
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Seventh year
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25 percent
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50 percent
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75 percent
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Eighth year
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10 percent
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40 percent
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70 percent
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Ninth year
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$20
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25 percent
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60 percent
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Tenth year
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$20
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10 percent
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50 percent
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11th or
subsequent
year
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$20
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$20
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$290
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(f) For the 11th and each succeeding year, the amount under paragraph (a), clauses (1)
and (2), must be calculated as $20.
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(g)
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(f)
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Except as provided in subdivision 23, for any vehicle previously registered in
Minnesota and regardless of prior ownership, the total amount due under this subdivision
must not exceed the smallest total amount previously paid or due on the vehicle.
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EFFECTIVE DATE.
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This section is effective the day following final enactment and
applies to taxes and fees payable for a registration period starting on or after January 1,
2027.
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Sec. 2.
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REGISTRATION TAX REBATE.
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Subdivision 1.
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Definition.
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For purposes of this section, "qualified registration instance"
means an imposition of the motor vehicle registration tax on a motor vehicle in which:
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(1) in the most recent taxable year ending before January 1, 2025, the taxable net income
of the vehicle owner is below the starting point for the third tier of the income tax under
Minnesota Statutes, section 290.06, subdivision 2c, paragraph (a), clause (3), (b), clause
(3), or (c), clause (3), whichever is appropriate for the taxpayer's filing status, and as adjusted
for inflation under Minnesota Statutes, section 290.06, subdivision 2d;
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(2) the vehicle was subject to the calculation as provided under Minnesota Statutes 2025
Supplement, section 168.013, subdivision 1a, paragraph (e), clause (1), for its first year of
vehicle life; and
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(3) the tax under clause (2) was payable for a registration period that started on or after
July 1, 2025, and on or before June 30, 2026.
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Subd. 2.
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Rebate payments.
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The commissioner of employment and economic
development, in consultation with the commissioners of public safety and revenue, must
issue a rebate payment to the owner of a motor vehicle for each qualified registration instance.
The payment is calculated as the lesser of $150 or 20 percent of the total amount paid under
Minnesota Statutes, section 168.013.
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Subd. 3.
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Requirements.
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(a) By October 15, 2026, the commissioner of employment
and economic development must issue the rebate payments required under this section.
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(b) Each rebate payment must be accompanied by notification that provides a brief
overview of the primary uses of registration tax revenue for state and local highway purposes.
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Subd. 4.
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Disclosure.
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The commissioner of revenue may disclose to the commissioner
of public safety, and the commissioner of public safety may disclose to the commissioner
of revenue, information as necessary to determine a qualified registration instance for a
vehicle owner for purposes of this section.
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Subd. 5.
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Appropriation.
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(a) The amount necessary to implement the requirements under
this section is appropriated in fiscal year 2027 from the driver and vehicle services operating
account in the special revenue fund to the commissioner of employment and economic
development. This is a onetime appropriation.
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(b) By January 15, 2027, the commissioners of public safety and employment and
economic development must jointly submit a notification on the expenditures under this
subdivision to the chairs and ranking minority members of the legislative committees with
jurisdiction over transportation policy and finance. The notification must include
identification of the number of rebate payments made, the average rebate payment amount,
and the administrative costs and total rebate expenditure amounts.
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EFFECTIVE DATE.
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This section is effective the day following final enactment.
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