How Exactly Are Minnesota Vehicle Tabs Calculated and Why So Expensive?

"$700 to register your car??"-- A question asked by a recent transplant to Minnesota.

Picture this: You just traded in your 14-year-old pickup for a brand-new $45,000 truck. You used to pay around $60-$70 to register your old truck, but this year you had to pay more than $700 to register the new one -- holy buckets that's a big difference!

So what gives? How exactly is the amount you pay to register your vehicle in Minnesota determined?

It depends on several factors.

How Much Does it Cost to Register Your Car in Minnesota?

First, there are $11.25 in universal fees that apply to every vehicle registration in Minnesota: a $1 office fee, an $8 filing fee, and a $2.25 technology surcharge.

Next, the registration fee is determined by the base value of the vehicle when it was purchased and its current age.

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As of January 1, 2024, first-year registration of a vehicle in Minnesota will now cost you 1.575% of the MSRP.

So that $45,000 2024 truck you just bought will cost you $720 to register for the first time in Minnesota.

But wait, there's more!

Some Minnesota Counties Charge Additional Vehicle "Wheelage Tax"

Now, don't forget about the $10-20 "wheelage tax" some Minnesota counties tack on that goes directly to that specific county's road repairs.

30 Minnesota counties impose a $10 wheelage tax, three counties $15, and 18 counties have opted to impose the maximum $20 wheelage tax. 32 counties in Minnesota have decided not to impose a wheelage tax.

So if you live in Hennepin County, the first-year registration of your new truck just went up 20 more bucks.

Does the Cost of My Minnesota Car Tabs Ever Go Down?

Yes! The seemingly high cost to register new vehicles in Minnesota does go down over the years based on an MSRP depreciation model.

In the first year, the registration fee is based on 100 percent of the car's MSRP and goes down as follows:

• 2nd year: 95%
• 3rd year: 90%
• 4th year: 80%
• 5th year: 70%
• 6th year: 60%
• 7th year: 50%
• 8th year: 40%
• 9th year: 25%
• 10th year: 10%

The registration for vehicles 11 years and older is now set at $20.

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There are different registration taxes for larger vehicles like certain trucks, buses, and commuter vans based on weight. You can find detailed information about vehicle registration taxes and fees on the Minnesota Legislature website.

Why Are Minnesota Vehicle Registration Tabs So Expensive?

During the Jesse Ventura gubernatorial days in Minnesota, vehicle registration tabs were a flat $189 for a new car and then went down to a flat $89 the years after.

That was a popular registration model until 2008, CBS reports, when lawmakers decided we needed more revenue to maintain, fix, and build roads.

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Minnesota spends around $2.7 billion per year on transportation, and 18% comes from vehicle registration tax and fees. The rest comes from vehicle sales tax, fuel tax, air/waterway/rail, and other transportation taxes and fees.

Also worth noting is Minnesota does not have any toll roads.

The good news: part of your car registration fee can be deducted from your Minnesota taxes as a personal property tax.

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