Good Question: How Does MN Decide Car Tabs Fees?
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MINNEAPOLIS (WCCO) – According to the Federal Highway Administration, the average Minnesota driver pays $125 per year to register his or her car. But some of us pay much more, and some of us pay much less.
So, when Joel Tracy of St. Paul found out his daughter paid almost $400 her new minivan’s tags, he was surprised. He had only paid $41 for his 2002 Tahoe.
“I thought she stuttered,” Tracy said.
According to Bruce Gordon, the director of communications for the Department of Public Safety, the car tabs fees are set by the state legislature.
“It’s been based on the age of the vehicle primarily throughout Minnesota’s history of registering vehicles,” Gordon said.
The state statute says the fee is equal to $10 plus 1.25 percent of the value of the car. In most cases, the value of the car is determined by the manufacturer’s suggested retail price (MSRP) and any destination charges.
There is also a $6 filing fee, $1 technology fee and in five Minnesota counties — Anoka, Carver, Dakota, Scott and Washington — there’s an additional $5 wheelage tax.
“The reason it’s done that way is that if you get a better deal than I do in buying that vehicle, we want to still pay the same taxes, so that’s fair,” he said.
In Minnesota, part of the registration fees work like a car property tax. The Minn. Department of Revenue says a person can deduct a portion of their registration fee as a personal property tax.
Every year, the state calculates the value of the car drops by 10 percentage points.
“It’s at 100 percent the first year, 90 percent, 80 percent and so forth, “ he said.
By year 10, the state calculates the fees based on 10 percent of the car’s value. For year 11 and beyond, it’s a flat sum of $25 plus the extra $16 in fees.
There are five colors of stickers – white, green, red, gold and blue – which rotate every five years. The colors were chosen for their visibility.