Reality Check: Gas Tax Or License Tabs — Which To Hike?

MINNEAPOLIS (WCCO) — Minnesota lawmakers are divided on how to fund road and bridge repairs — whether to use a gas tax hike or raise car license tab fees.

Here’s the difference in cost: Minnesota’s tax is 28.5 cents a gallon. For most cars with a 20-gallon tank, that’s about $5.70 in taxes every time you fill up, or roughly $205.20 in taxes every year.

License tabs are a whole different category. Tabs for a new $30,000 car will cost about $385 in the first year, and $235 in Year 5.

So what’s cheaper — to raise a gas tax, or to charge more for license tabs?

It turns out, they’re roughly the same. Raising a gas tax 5 cents will cost $36 more a year at the pump. A 10-cent hike will cost $72. And raising the gas tax 15 cents a gallon will generate $108 a year.

Compare that to raising license tab fees: On that $30,000 car, Gov. Mark Dayton’s plan would cost you $124 the first year, and $152 in the fifth.

The Republican plan would cost you $5 more in the first year, and $112 more in Year 5.

More Sources Used For This Reality Check

Minnesota License Tab Fees
Minnesota Gasoline Consumption
Short Term Energy Outlook
Minnesota Fuel Taxes
Best Selling Cars & Trucks In Minnesota
Toyota Cars

More from Pat Kessler

One Comment

  1. Mary says:

    But this does not take into account out of state drivers who fill up while driving through the state?

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