Minnesota Vehicle Sales Tax & Fees [+ Calculator]
It’s exciting to buy a new (or new for you) car, but it’s also far from cheap.
Things like sales tax and other fees are often forgotten about in the excitement of making a new car purchase. But in Minnesota, you’ll need to be prepared to spend additional money on these extra costs.
Here’s what to expect when it comes to taxes and fees in the state of Minnesota.
Table of Contents
- How Much Is the Car Sales Tax in Minnesota?
- How to Calculate Minnesota Sales Tax on a Car
- Minnesota Car Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which County Has the Highest Tax? Which Has the Lowest?
- Car Sales Tax for Trade-Ins in Minnesota
- Car Sales Tax on Private Sales in Minnesota
- Tax on Rebates & Dealer Incentives
- Minnesota DMV/State Fees
- When Sales Tax Is Exempt in Minnesota
- Minnesota EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
How Much Is the Car Sales Tax in Minnesota?
The state sales tax on a car purchase in Minnesota is 6.5%.
However, this does not include any potential local or county taxes. The average local tax rate in Minnesota is 0.516%, which brings the total average rate to 7.016%.
As an example, if you were to purchase a new sedan at a purchase price of $20,000, then you will have to pay an additional $1,300 in sales tax.
How to Calculate Minnesota Sales Tax on a Car
You can calculate the sales tax in Minnesota by multiplying the final purchase price by .065%.
For example, let’s say that you want to purchase a new car for $30,000, you would use the following formula to calculate the sales tax:
$30,000 x.065 = $1,950
This means that your sales tax is $1,950 on a $30,000 purchase price.
Calculate Car Sales Tax in Minnesota Example:
- Initial Car Price: $30,000
- Sales Tax Rate: 6.5%
- Trade-In Amount: $5,000
- Incentives/Rebates: $2,000
Sales Tax = ($30,000 - $5,000 - $2,000) * .065
Sales Tax = $1,495
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
Minnesota Car Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
The sales tax is the same 6.5% on a used vehicle.
For example, if you were to purchase a used car for $15,000, then you will have to pay an additional $975 in sales tax.
Which County Has the Highest Tax? Which Has the Lowest?
The Minnesota counties with the highest tax are Cass and Hubbard counties at 8.875%.
The Minnesota counties with the lowest tax are Big Stone, Cottonwood, Lac Qui Parle, Lincoln, Stevens, and Traverse county with a rate of 6.875%.
Car Sales Tax for Trade-Ins in Minnesota
You don’t have to pay sales tax on trade-ins in Minnesota. In other words, be sure to subtract the trade-in amount from the car price before calculating sales tax.
As an example, let’s say you are purchasing a new SUV for $25,000 and your trade-in is worth $5,000. You will subtract the trade-in value by the purchase price and get $20,000. Therefore, your car sales tax will be based on the $20,000 amount.
However, if you are trading in an off-road vehicle (watercraft, all-terrain vehicle, or snowmobiles), then you must pay sales tax on the trade-in. In other words, trading in an off-road vehicle does not reduce the taxable amount.
Car Sales Tax on Private Sales in Minnesota
A sales tax is required on all private vehicle sales in Minnesota.
As an example, if you purchase a truck from a private party for $10,000, then you will pay 6.5% of that amount to the Minnesota DMV.
Tax on Rebates & Dealer Incentives
You do not have to pay tax on dealer rebates and incentives in Minnesota. In other words, be sure to subtract the incentive/rebate amount from the car price before calculating sales tax.
As an example, if you are purchasing a new car for $30,000 with a $5,000 rebate, you will pay sales tax on the $25,000 final cost of the car.
However, rebates for off-road vehicles do not reduce the taxable amount.
Minnesota DMV/State Fees
There are some other state and DMV fees associated with the purchase of a vehicle in Minnesota.
A few of these fees include:
- Registration Fee: $9.25 + 1.285% of MSRP
- Title Fee: $8.25
- Plate Transfer Fee: $15.50
Minnesota Dealership Fees
Dealerships apply extra fees, sometimes referred to as “doc fees,” with the sale of the car.
Though these fees vary based on the dealership, the average fee in Minnesota is $75, with a limit of $125 on how much dealerships can charge.
When Sales Tax Is Exempt in Minnesota
If you brought and titled your car in another state in the last 60 days, then you will not have to pay sales tax in Minnesota. Additionally, you do not have to pay sales tax if you are a disabled veteran.
There are also non-taxable sales tax events associated with the following vehicle transfers:
- If you inherited the vehicle.
- You receive the vehicle from an individual’s revocable trust.
- You receive the vehicle in a divorce.
- You receive the vehicle as a gift from a spouse, parent, child, grandparent, or grandchild.
Minnesota EV Rebates & Incentives
Minnesota offers an EV rebate of $125 for plug-in hybrid vehicles and $250 for fully electric vehicles.
In addition, EVs purchased in the state are eligible for the $7,500 federal EV rebate.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
