While a reduction in vehicle registration tax that kicked in Minnesota July 1, it did nothing to help car owners whose tags expired earlier this year. However, thanks to a new ruling by the State tax and highway officials the lower rate renewals have been expanded to include June registrations after being inundated with calls threatening a class action suit against them.
According to the DMV, new vehicles in Minnesota are taxed at 1.25% of their value. Previously, that rate was applied for 10 years, with the tax reducing as the vehicle depreciated. By a vehicle's 11th year, the tax became a flat $35. While the revised vehicle tax keeps the original 1.25% of-value rate, it caps the first renewal at $189. Afterwards, car owners will pay only $99 to renew tags. If they hold onto the vehicle for 11 years, the tax drops down to $35 as before.
As in all states, Minnesota registration tags are renewed each year in the anniversary month of the vehicle's purchase. Although the new legislature was meant to reduce rates effective with registration taxes due after July 1, the law's language was ambiguous on June renewals. As a result, it has been decided to refund about $13.3 million in tax money to June taxpayers. The average refund is expected to run about $95, although some may be a lot higher or lower depending on the circumstances.