Minnesota Used Car Sales Tax (2026): 6.875% Rate, the $10 Old-Car Tax and Gift Rules

Minnesota charges a 6.875% motor vehicle sales tax on the purchase price of a used car, after subtracting any trade-in and rebate. No county or city percentage goes on top, though some cities and counties add a flat $20 local vehicle excise tax. Older, cheap cars get a big break: a passenger car in its tenth year or later that's worth under $3,000 pays a flat $10 instead. You pay the tax when the title transfers, and that has to happen within ten days of the sale. Everything here is as of Oct 19, 2026.

If you looked this up a few years ago you may remember 6.5%. The rate went to 6.875% on July 1, 2023, and plenty of older calculators and forum posts still show the old number. I checked the current statutes, the Department of Revenue's motor vehicle sales tax page (last updated Sept. 23, 2026) and Driver and Vehicle Services' buying-and-selling fact sheet on Oct 19, 2026. The Revenue site blocks automated readers, so it's cited without a link below.

How the tax is figured

Under Minnesota Statutes 297B.02, the 6.875% applies to any vehicle you buy, in Minnesota or elsewhere, that has to be registered here. Revenue says the taxable price is the sale price minus rebates and the trade-in allowance. Dealer prep and add-on accessories are taxed, while extended warranties and registration and document fees aren't. One oddity: trading in an ATV or snowmobile doesn't lower the tax, because only a motor vehicle trade comes off the price.

• $8,000 sale, no trade: $550.
• $15,000 sale with a $5,000 trade-in: tax on $10,000, so $687.50.
• A 12-year-old car that value guides put under $3,000: the flat $10, whatever you paid.

Since it's one statewide rate, you won't have to look up your county the way you do in Colorado or Wisconsin. That's a relief, honestly.

The $10 and $150 flat taxes

Section 297B.025 sets out who qualifies for the $10 in-lieu tax: a passenger car in its tenth or later year of vehicle life whose resale value is under $3,000, using value guides the registrar picks. So the seller's asking price doesn't decide it alone. A car registered in one of the state's collector plate classes pays a flat $150 instead, but if it moves to regular plates within a year, the full 6.875% comes due.

Fair warning, a cheap old car also tends to have the messiest history. Saving a couple hundred dollars in tax doesn't mean much if the frame is rotted.

Gifts, family and new residents

Minnesota is tougher on gifts than Wisconsin, for example. Section 297B.01 says a car acquired as a gift, or for a nominal price, is taxed on the average value of similar vehicles. So "selling" your car to a friend for $1 gets taxed like a normal sale. The same section carves out a short list of transfers that aren't treated as sales:

• Gifts between spouses, between parents and a child, and between grandparents and a grandchild.
• Inheritance, bequest or transfer-on-death from someone who owned the car.
• Transfers between spouses in a divorce proceeding.
• A car titled to joint owners that passes to one of them with no money involved.

Siblings, aunts and cousins aren't on that list. Section 297B.03 adds a few more exemptions, including new residents who bought the car more than 60 days before moving here and had it registered in their name elsewhere, and veterans with a total service-connected disability.

Private sales and the title

The DVS fact sheet says ownership has to transfer on the title within ten days of the sale, and you can do it at any of the nearly 200 deputy registrar offices. The seller writes the sale price in the sales tax declaration area on the back of the title, and a damage disclosure is required on every vehicle. Section 168A.10 also has the seller report the sale within ten days. The fact sheet, dated March 2025, lists typical fees at the counter:

• Title fee $8.25, plus $2 for each lien.
• Transfer tax $10 and filing fee $12.
• Public safety vehicle fee $3.50 and tech surcharge $2.25.

Our Minnesota private-sale title transfer guide covers the rest of the forms, and our used car sales tax guide compares other states.

Check the history first

DVS itself "highly recommends" checking a vehicle's history before you buy and points to NMVTIS. Do that, then pull a full report for accident and service records. Minnesota has its own salvage and prior-salvage brands, which our Minnesota salvage and rebuilt title post breaks down.

CarVins sells CARFAX and AutoCheck reports as a licensed reseller. We aren't affiliated with either brand. As of mid October 2026, it's about $5.50 for a guest report, around $4.50 for members, or about $6.75 for both reports, where the same reports usually run $39.99 to $44.99 retail. The final price shows at checkout, so check it there.

Sources

• Minnesota Statutes 297B.02 (tax rate and in-lieu taxes)
• Minnesota Statutes 297B.01 (purchase price and gifts)
• Minnesota Statutes 297B.025 (older and collector vehicles)
• Minnesota Statutes 297B.03 (exemptions)
• Minnesota Department of Revenue: Motor Vehicle Sales Tax (revenue.state.mn.us/guide/motor-vehicle-sales, last updated Sept. 23, 2026)
• Minnesota DVS: Buying or Selling a Motor Vehicle (March 2025)
• Tax Foundation: 2026 State and Local Sales Tax Rates