HF4387

Purpose

• Create an exemption from the motor vehicle sales tax for the sale of preowned (used) motor vehicles.

Main Provisions

• Add a new subdivision (Subd. 30a) to Minnesota Statutes section 297A.67. This subdivision establishes that preowned motor vehicles are exempt from the motor vehicle sales tax.
• Define what counts as a “preowned motor vehicle” by referring to the definition in Minnesota Statutes section 297B.01, subdivision 13a.
• State that preowned motor vehicles that are already exempt from taxation under chapter 297B are exempt from the motor vehicle sales tax under chapter 297A (the motor vehicle sales tax).

How it Changes Law

• Aligns the motor vehicle sales tax exemption with existing exemptions in Chapter 297B for certain used vehicles, making those vehicles exempt from the sales tax when sold.
• Requires cross-reference to definitions in 297B.01 and to exemptions under Chapter 297B to determine which used vehicles qualify for the exemption.

Significant Changes

• Introduces a targeted sales tax exemption specifically for preowned motor vehicles that meet the 297B exemption criteria.
• Adds or clarifies definitions to ensure used vehicles that qualify for Chapter 297B exemptions are also exempt from the motor vehicle sales tax under 297A.67.

Summary Notes

• The bill does not create a broad new tax break for all used cars; it ties the exemption to existing exemptions under Chapter 297B.
• It relies on existing definitions of “preowned motor vehicles” to determine eligibility.

Relevant Terms - preowned motor vehicles - motor vehicle sales tax - exemption from taxation - Chapter 297B - Minnesota Statutes 2024 - section 297A.67 Subd. 30a - section 297B.01 Subd. 13a - used vehicles - exemptions under Chapter 297B