MN Disabled Veteran Vehicle Tax and Fee Exemptions

Minnesota’s disabled veteran vehicle tax exemption waives the 6.875% motor vehicle sales tax on one vehicle and eliminates the annual registration tax and most related fees on up to two vehicles for veterans the U.S. Department of Veterans Affairs has rated as totally service-connected disabled. The benefits sit in Minnesota Statutes 297B.03 and 168.012, and you claim them through Driver and Vehicle Services.1Minnesota Office of the Revisor of Statutes. Minnesota Code 297B.03 – Exemptions2Minnesota Office of the Revisor of Statutes. Minnesota Code 168.012 – Vehicles Exempt from Tax

Who Qualifies

You qualify if the VA has rated you as having a total service-connected disability. In practice that means either a 100% permanent and total rating or an individual unemployability (IU) rating.3MyArmyBenefits. Minnesota Military and Veterans Benefits The IU designation is the one veterans often miss. If the VA has determined you cannot maintain substantially gainful employment because of service-connected conditions, you’re eligible even when your combined schedular rating is below 100%.

The vehicle has to be registered in your name. Joint registration with a spouse or domestic partner is fine and doesn’t cost you the exemption.2Minnesota Office of the Revisor of Statutes. Minnesota Code 168.012 – Vehicles Exempt from Tax A spouse or family member registering a vehicle on their own does not qualify. The benefit follows the veteran.

Which Vehicles Qualify, and How Many

The registration tax exemption covers passenger automobiles, one-ton pickup trucks, motorcycles, and recreational vehicles.2Minnesota Office of the Revisor of Statutes. Minnesota Code 168.012 – Vehicles Exempt from Tax Heavier commercial trucks and trailers fall outside it.

The two exemptions have different vehicle-count limits:

If you own two vehicles, both can carry the registration tax exemption, but only one purchase can skip the sales tax.

What Is Waived, and What Isn’t

The 6.875% motor vehicle sales tax is the largest single line item and is waived in full at purchase under Section 297B.03, paragraph 16.4Minnesota Department of Revenue. Motor Vehicle Sales1Minnesota Office of the Revisor of Statutes. Minnesota Code 297B.03 – Exemptions

Under Section 168.012, subdivision 13, the state also waives:2Minnesota Office of the Revisor of Statutes. Minnesota Code 168.012 – Vehicles Exempt from Tax

  • The annual registration tax, which is based on a percentage of the vehicle’s value
  • Administrative fees
  • Filing fees and surcharges
  • Plate and validation sticker fees, including fees for veteran-themed specialty plates and transfer fees

Two charges are not waived: personalized plate fees and any required contribution tied to a specialty plate design. Vanity numbers and charitable-contribution plates still cost extra.2Minnesota Office of the Revisor of Statutes. Minnesota Code 168.012 – Vehicles Exempt from Tax

What the Savings Look Like

On a $35,000 vehicle, skipping the 6.875% sales tax saves roughly $2,406. On a $50,000 truck, roughly $3,438.4Minnesota Department of Revenue. Motor Vehicle Sales

The registration tax is smaller each year but recurs. Minnesota calculates it as $10 plus 1.575% of the manufacturer’s suggested retail price, with the percentage applied to a declining share of MSRP as the vehicle ages.5Minnesota Office of the Revisor of Statutes. Minnesota Code 168.013 – Taxes For a vehicle with a $35,000 MSRP, the first-year registration tax runs about $561. By year six, when the taxable base drops to 60% of MSRP, the annual tax falls to about $341. After year ten, it flattens to $30. Over a decade of ownership, the waived registration tax alone clears $3,000, before counting the administrative and plate fees you also skip.

How to Apply

Bring the following when you apply:

  • Your VA Summary of Benefits letter showing total and permanent disability or an IU rating. The letter should be current and clearly state “permanent and total.”
  • Your DD-214 confirming honorable service.
  • Vehicle information: VIN, purchase price, odometer reading, and model year. If you’re buying from a dealer, the purchase agreement carries all of this.

The fastest route is applying in person at any Minnesota Deputy Registrar office. Staff can process the exemption on the spot if your paperwork is in order. To apply by mail, send the application to Driver and Vehicle Services, 445 Minnesota Street, Suite 195, Town Square Building, Saint Paul, MN 55101-5190.6Minnesota Department of Public Safety. Contact DVS Mailed applications take longer, so leave time before a purchase deadline.

Once the exemption is on file, your annual renewals reflect the waived taxes and fees automatically for as long as you remain the registered owner and keep your qualifying disability status. Keep your VA letter and DD-214 accessible. You may need to re-verify eligibility when you buy a replacement vehicle.

Federal VA Automobile Allowance Is Separate

The Minnesota exemption is a state benefit. It’s distinct from the federal VA one-time automobile allowance, which is up to $27,074.99 effective October 1, 2025, and helps pay for a vehicle adapted to a qualifying disability.7Veterans Affairs. Current Special Benefit Allowances Rates The federal grant has its own criteria (loss or loss of use of a hand or foot, certain vision impairments, severe burn injury, or ALS) and stacks with the Minnesota sales and registration tax exemptions.8Veterans Affairs. Automobile Allowance and Adaptive Equipment It’s claimed on VA Form 21-4502, not through DVS.9Veterans Affairs. VA Form 21-4502 Qualifying for the state vehicle exemption does not automatically qualify you for the federal allowance, and the reverse is also true.

Minnesota also offers a property tax market value exclusion for disabled veterans, handled through your county assessor rather than DVS.10Minnesota Department of Revenue. Market Value Exclusion for Veterans with a Disability If you qualify for the vehicle exemption, it’s worth checking whether you qualify there too.