SF5293

Purpose

• Establish a weight-based motor vehicle registration tax in Minnesota.
• Repeal electric vehicle (EV) and plugin hybrid electric vehicle surcharges.
• Make related amendments to several Minnesota Statutes to implement and enforce the new tax structure.
• Align registration fees with vehicle weight or value over time, and add enforcement and penalty provisions for violations.

Main Provisions

• Passenger automobiles and hearses (MSRP-based tax)
  • For passenger automobiles and hearses, the registration tax is calculated as a percentage of the manufacturers’ suggested retail price (MSRP), not including the cost of optional equipment or a destination charge (except for vehicles first registered in Minnesota before November 16, 2020, where a destination charge may be considered).
  • The percentage of MSRP used for the tax decreases over the vehicle’s life:
  • 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 each year after: 20% (i.e., a lower ongoing amount)
  • The registrar determines MSRP using manufacturer list price data or other acceptable sources if the official price label isn’t available. If MSRP can’t be ascertained by listed methods, the registrar may use other sources.
  • The tax in this MSRP-based approach is calculated based on the MSRP (or equivalent price) and not on accessories or destination charges (except as noted above for older vehicles).
• Weight-based tax for heavier vehicles
  • A separate registration tax applies based on the vehicle’s gross vehicle weight rating (GVWR), using a weight-based schedule. The tax increases with greater GVWR.
  • The GVWR is determined by inspecting the safety certification label on the driver’s side door jamb.
  • The tax schedule covers several weight brackets (e.g., various GVWR ranges from light to heavy), with amounts specified in the bill.
• Administration of pricing
  • The registrar uses information available to dealers and deputy registrars at the time of initial registration to calculate the tax.
  • The schedule and related rules apply to determine the appropriate tax amount for each vehicle.

Key Provisions on Vehicle Weight and Use

• Declared gross weight
  • For most vehicles, the applicant must declare the unloaded weight and the maximum load, forming the gross weight on which the license tax is based.
  • The gross weight declared must not be less than 1.14 times the unloaded weight (with some exceptions, such as farm-related or certain specialized vehicles).
• Overweight limits and penalties
  • If a vehicle’s gross weight or axle weight exceeds the allowed limit, penalties apply, including potential increases in the authorized gross weight, suspension or revocation of registration, and other sanctions.
  • The bill details a graduated set of penalties tied to how much the weight exceeds the limit and for how long.
• Definitions and exceptions
  • Tow trucks and certain other vehicle types have specific definitions for gross weight and axle weight.
  • Special exemptions exist for the first haul of unprocessed or raw farm products or unfinished forest products under defined distance limits (e.g., within 100 miles of production for farm products; within 200 miles for unfinished forest products).
• Seasonal and reciprocity considerations
  • The bill addresses reciprocity and seasonal load restrictions, and when penalties apply or when certain privileges may be suspended.
  • The registrar may investigate gross weight violations and require the operator to show cause why privileges in the state should not be revoked unless the additional tax is paid.

Special Permits and Excessive Gross Weight

• When a special permit is issued that allows weight greater than the registered weight, an additional tax is collected for excessive gross weight. The calculation uses the difference between the base registration tax and the tax that would be due at the permit weight, prorated by the permit duration.
• Proceeds from this surcharge are deposited into the state treasury and credited to the highway user tax distribution fund.

Repeals and Changes to Law

• Repeals Minnesota Statutes 2024 section 168.013 subdivision 23.
• Repeals Minnesota Statutes 2025 Supplement section 168.013 subdivisions 1m and 1n.
• The bill would replace the EV surcharge with weight- or price-based registration mechanisms and adjust related statutory references accordingly.

Enforcement, Administration, and Reregistration

• If registration is revoked for overweight or related violations, the vehicle may not operate on state highways until properly reregistered, plates issued, and the full annual tax paid for the current weight.
• For vehicles operating under reciprocity agreements, certain reregistration rules apply and may require full payment of the annual tax.
• The registrar has authority to cancel or revoke registration and reciprocity privileges for ongoing violations, subject to specified conditions and timelines.

Practical Implications

• Shifts tax revenue toward a system that charges based on vehicle weight or current value, rather than a flat fee or EV-focused surcharges.
• Potentially reduces charges for older vehicles after several years if the MSRP-based portion declines, while increasing charges for heavier or newer, high-value vehicles (depending on the vehicle’s price and GVWR).
• Introduces stricter enforcement on overweight transport and heavy loads, with penalties and potential loss of state operating privileges.
• Aims to fund highway and road infrastructure through the highway user tax distribution fund, including additional weight-based charges.

Relevant Dates and Format Notes - The bill amends and repeals several sections and would take effect as specified in the enacted version (not provided here). Some provisions refer to vehicles registered before a certain date (e.g., November 16, 2020) for destination charge rules.

Relevant Terms - MSRP (manufacturers’ suggested retail price) - Manufacturers suggested retail price - Destination charge - Passenger automobile - Hearse - Gross Vehicle Weight Rating (GVWR) - Gross weight - Axle weight - Registration tax - Weight-based tax schedule - First haul - Farm products - Unfinished forest products - Special permit - Excessive gross weight - Reciprocity privileges - Highway User Tax Distribution Fund - Registrar (county/state agent responsible for registration) - Vehicle license plate/registration - Collector/dealer information for price determination - Unloaded weight

Note: This summary focuses on the bill’s stated structure and provisions. It omits formal bill metadata (title, author list) as requested.