['Fleet Taxes']
['Fleet taxes']
03/12/2025
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Sales & use taxes
Minnesota sales tax is charged by the seller and applied to retail sales of taxable services and tangible personal property sold in Minnesota. The sales tax is imposed at the state and local levels.
A 6.875% sales tax is due on most purchases or acquisitions of motor vehicles $20 excise tax applies to the sales of motor vehicles in applicable cities or counties. Any person in the retail business of selling new or used motor vehicles must collect and remit the $20 vehicle excise tax.
The State of Minnesota gives credit for sales and/or use tax paid to another jurisdiction. If the amount due in Minnesota is more than the tax already paid, only the difference is due.
A motor carrier that transports goods or passengers interstate may qualify for sales tax reductions on the equipment used in such transportation. The reduced sales tax applies to leases or purchases of vehicles or repair parts and accessories. When a motor carrier buys equipment, a prorated tax will be collected at the time the vehicle is registered.
To qualify for a sales tax reduction for vehicle leases and repair parts and accessories, a motor carrier must apply for a Motor Carrier Direct Pay (MCDP) authorization. To qualify, a carrier must:
- Have a certificate or permit from the USDOT (or in the case of an owner-operator, lease to a carrier that holds a certificate or permit from the USDOT);
- Transport its own goods in interstate commerce and have a Minnesota prorate account; or
- Transport exempt commodities (under Interstate Commerce Laws).
The Department of Revenue will issue carriers a letter authorizing the tax exemption. When an authorized carrier purchases items at a reduced sales tax, the carrier must include its Minnesota identification number of a fully completed exemption certificate (Form ST3). The carrier then pays a prorated tax directly to the Department of Revenue.
Equipment subject to the reduced tax includes:
- The leases of trucks, tractors, and trailers used in interstate transportation;
- Refrigeration equipment, tires, batteries, padlocks, repair parts, communication equipment; and
- Other items attached to the mobile transportation equipment.
The sales tax reduction does not apply to items such as antifreeze, oil, grease, pallets, oil, local pickup and delivery vehicles, or anything else not directly attached to or to be attached to interstate transport vehicles.
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['Fleet Taxes']
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Copyright 2025 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.