Minnesota House Bill HF2365

Minnesota 2023-2024 Regular Session

• Introduced: 3/2/23
• Refer: 3/2/23

Caption

Motor vehicle sales tax provisions modified, and in lieu tax imposed on older passenger automobiles and collector vehicles expanded to motorcycles.

Impact

The bill is expected to impact state revenue generated from vehicle sales taxes. By instituting a lower tax rate of $10 for older passenger automobiles and motorcycles, and a $150 tax for collector vehicles, the legislation endeavors to encourage vehicle retention. This could potentially reduce the state’s tax intake from vehicle sales, as it lowers the barriers to ownership for specific classes of vehicles. The effective date being set for sales and purchases made after June 30, 2023, gives vehicle owners time to prepare for the upcoming tax changes.

Summary

HF2365 proposes modifications to existing motor vehicle sales tax provisions in Minnesota, specifically expanding the in lieu tax to include not only older passenger automobiles but also motorcycles and collector vehicles. The bill amends Minnesota Statutes to establish lower tax rates for older vehicles, targeting those that have been in service for ten years or longer and have a resale value under $3,000. This legislative change is aimed at providing relief to owners of older vehicles and collectors, making it financially easier for them to maintain ownership of these vehicles.

Contention

While supporters of HF2365 argue that the bill will benefit collectors and reduce financial burdens on owners of older vehicles, critics may express concerns regarding the long-term effects on state revenue and whether such tax breaks disproportionately benefit a small segment of vehicle owners. Additionally, discussions may arise surrounding fairness in taxation and the implications of potentially lower revenues for state services-funded through these taxes.