The Minnesota vehicle registration tax is based on your car’s original manufacturer’s suggested retail price, not what it’s worth today. For passenger vehicles first registered on or after November 16, 2020, the rate is 1.575% of MSRP multiplied by a depreciation factor that drops each year the vehicle ages, plus a flat $10 base tax. Vehicles registered before that date use a slightly lower 1.54% rate. Several smaller fees get added on top, and beginning January 1, 2026, electric and plug-in hybrid vehicles owe a separate surcharge as well.
How the Tax Is Calculated
The formula lives in Minnesota Statutes Section 168.013. Two rates apply depending on when the vehicle was first registered in the state:
- Before November 16, 2020: 1.54% of MSRP (plus the destination charge) times the depreciation factor, plus $10.
- On or after November 16, 2020: 1.575% of MSRP times the depreciation factor, plus $10.
The MSRP used is the base sticker price when the vehicle was new. Optional equipment and accessories added separately by a dealer are excluded. If the MSRP can’t be determined from published manufacturer data, the state uses the actual sales price instead.1Minnesota Office of the Revisor of Statutes. Minnesota Statutes 168.013 – Vehicle Registration Tax
Because the calculation is anchored to original MSRP, a car that has lost significant resale value still carries a tax based on its original price tag. The only thing that reduces the bill over time is the statutory depreciation schedule.
The Depreciation Schedule
Each year, the percentage of MSRP used in the formula drops on a fixed curve:
- Year 1: 100% of MSRP
- Year 2: 95%
- Year 3: 90%
- Year 4: 80%
- Year 5: 70%
- Year 6: 60%
- Year 7: 50%
- Year 8: 40%
- Year 9: 25%
- Year 10: 10%
- Year 11 and beyond: a flat $20 replaces the percentage calculation
Once a vehicle reaches its eleventh year, the MSRP-based math goes away. Add the $10 base tax and the total bottoms out at $30 per year, before fees.1Minnesota Office of the Revisor of Statutes. Minnesota Statutes 168.013 – Vehicle Registration Tax
There’s also a cap worth knowing if you buy used. For any vehicle previously registered in Minnesota, the total registration tax can never exceed the smallest amount previously paid or due on that vehicle. If the prior owner paid less because of depreciation, your tax stays at or below that figure.
A Sample Calculation
Suppose you buy a new passenger car with an MSRP of $35,000 and register it in 2026. Using the 1.575% rate:
- Year 1: $10 + (1.575% × $35,000 × 100%) = $561.25
- Year 5: $10 + (1.575% × $35,000 × 70%) = $395.88
- Year 10: $10 + (1.575% × $35,000 × 10%) = $65.13
- Year 11 and after: $10 + $20 = $30.00
These are the registration tax amounts only. The actual renewal bill will be higher once the flat fees described below are added in.1Minnesota Office of the Revisor of Statutes. Minnesota Statutes 168.013 – Vehicle Registration Tax
Electric and Plug-In Hybrid Surcharges Starting in 2026
Beginning January 1, 2026, all-electric vehicles and plug-in hybrids pay a surcharge on top of the standard registration tax. Revenue from the surcharge goes into the Highway User Tax Distribution Fund.
For all-electric vehicles, the surcharge is 0.5% of MSRP multiplied by the same depreciation schedule the base tax uses. For plug-in hybrids, the rate is 0.25% of MSRP on that same curve. Both have minimum floors that take over when the percentage calculation would produce a lower number:1Minnesota Office of the Revisor of Statutes. Minnesota Statutes 168.013 – Vehicle Registration Tax
- All-electric vehicles: minimum of $150 from January 2026 through June 2027, then $100 starting July 2027.
- Plug-in hybrids: minimum of $75 from January 2026 through June 2027, then $50 starting July 2027.
The floor kicks in fairly quickly for modestly priced EVs. A $40,000 all-electric vehicle in year one would owe 0.5% × $40,000 = $200, which beats the $150 minimum. By year nine, when depreciation drops the base to 25% of MSRP, the calculation falls to $50 and the $150 floor takes over. Higher-MSRP EVs stay on the percentage calculation longer before hitting the minimum.
Other Fees on Every Renewal
Every renewal includes a $3.50 public safety vehicle fee and a $2.25 technology surcharge that funds the state’s digital record-keeping systems.2Minnesota Department of Public Safety. Motor Vehicle Registration A filing fee applies to each transaction, and credit card payments through the online portal carry a small convenience fee.
Many Minnesota counties also charge a wheelage tax of up to $20 per vehicle per year. The state collects it alongside your registration and returns the money to the county where the vehicle is kept. Not every county levies the full $20, but most participating counties set it at the statutory maximum.3Minnesota Office of the Revisor of Statutes. Minnesota Statutes 163.051 – Wheelage Tax
What You Can Deduct on Your Federal Return
Part of what you pay each year is deductible as a personal property tax on your federal return if you itemize. The deductible amount is the registration tax minus $30 for each vehicle. Only passenger automobiles, pickup trucks, and vans qualify. Plate fees, filing fees, and other flat charges aren’t deductible.4Minnesota Department of Revenue. Subtractions and Deductions
The deduction goes on line 7 of Schedule A (Form 1040). It matters most for owners of newer, higher-MSRP vehicles where the tax runs several hundred dollars. Once a vehicle reaches year 11 and the tax drops to $30, there’s nothing left to deduct after the $30 subtraction.
If Your Registration Expires
Driving with expired tabs can result in a traffic citation. Minnesota law offers a narrow defense: if the DVS failed to send you a renewal notice, you can avoid the citation by producing a statement from the registrar confirming the notice was never sent, and by renewing within ten days of being cited.5Minnesota Office of the Revisor of Statutes. Minnesota Statutes 168.09 – Registration; Reregistration
Outside that situation, there’s no grace period. If registration lapses, you will generally owe the tax for the period the vehicle went unregistered. Owners whose vehicles were off the road and not driven on public streets may be able to sign a storage affidavit to avoid paying for the gap, but only when the vehicle truly wasn’t in use. If you know you won’t be driving a vehicle for a stretch, canceling the registration proactively is safer than letting it expire.