Short answer
Minnesota taxes vehicle sales at 6.875%. Minnesota taxes the price after the trade-in is deducted. The credit applies when the seller takes a motor vehicle in trade. Minnesota exempts out-of-state buyers only under specific conditions: The buyer must state the vehicle will be registered in another state, and the dealer must verify the buyer's name and address on the buyer's driver's license against the signed contract. A local $20 vehicle excise tax can still be due even though the Motor Vehicle Sales Tax is not. Minnesota credits sales tax legally paid to another state, so the same dollars are not taxed twice. All of this describes a retail purchase from a dealer; leases and private-party sales run on different rules in most states.
Minnesota car sales tax quick facts
Last verified August 27, 2026| Sales tax rate on vehicles | 6.875%[1] |
| Trade-in credit | Minnesota taxes the price after the trade-in is deducted. The credit applies when the seller takes a motor vehicle in trade.[1] |
| Selling to an out-of-state buyer | Minnesota exempts out-of-state buyers only under specific conditions: The buyer must state the vehicle will be registered in another state, and the dealer must verify the buyer's name and address on the buyer's driver's license against the signed contract. A local $20 vehicle excise tax can still be due even though the Motor Vehicle Sales Tax is not.[2] |
| Credit for tax paid to another state | Minnesota credits sales tax legally paid to another state, so the same dollars are not taxed twice.[3] |
| Dealer doc fee | Capped at $350[4] · not taxable[1] |
| Temp tag for the drive home | Minnesota issues a dedicated nonresident temporary permit: a $1 permit (fee waived when the dealer or deputy registrar transmits the sale electronically) issued to a nonresident buying a vehicle in Minnesota for the sole purpose of removing it from the state. It is valid 60 days from the date of sale and must be affixed to the rear of the vehicle. (valid 60 days)[5] |
| Out-of-state buyer registration | New residents have 60 days to register a passenger vehicle, motorcycle, utility trailer, or house trailer with Minnesota DVS. Titling requires the current out-of-state vehicle title (or an accepted substitute ownership document such as the most recent out-of-state registration card with a marked copy of the title).[6] |
From the desk
Minnesota taxes vehicles under its own motor vehicle sales tax at a flat statewide rate, collected with title work. Simple math, but the exemption and transfer rules live in their own statute, not the general sales tax law.
Selling to an out-of-state buyer in Minnesota
Minnesota exempts out-of-state buyers only under specific conditions: The buyer must state the vehicle will be registered in another state, and the dealer must verify the buyer's name and address on the buyer's driver's license against the signed contract. A local $20 vehicle excise tax can still be due even though the Motor Vehicle Sales Tax is not.[2]
The tax answer is only half the job. The desk still has to move the title, issue the temp tag, and keep the deal from stalling while paperwork crosses state lines, and that chain is what Voltra's title tracking holds in one view.
Buying in Minnesota from out of state
If you live in another state and buy in Minnesota, the deciding rule is where the vehicle gets registered: your home state's tax applies at registration, and what happens at the Minnesota sale depends on the row above. Minnesota credits sales tax legally paid to another state, so the same dollars are not taxed twice.[3]
Registration and temp tags
New residents have 60 days to register a passenger vehicle, motorcycle, utility trailer, or house trailer with Minnesota DVS. Titling requires the current out-of-state vehicle title (or an accepted substitute ownership document such as the most recent out-of-state registration card with a marked copy of the title).[6] Minnesota issues a dedicated nonresident temporary permit: a $1 permit (fee waived when the dealer or deputy registrar transmits the sale electronically) issued to a nonresident buying a vehicle in Minnesota for the sole purpose of removing it from the state. It is valid 60 days from the date of sale and must be affixed to the rear of the vehicle. Validity: 60 days.[5]
Bordering states
Cross-border deals from Minnesota most often involve Iowa, North Dakota, South Dakota and Wisconsin. No two pairings behave the same; run the exact combination through the out-of-state checker.
Vehicle-type exceptions
Two flat in-lieu taxes replace the 6.875% rate. Passenger vehicles 10 model years or older sell for a flat $10 when both the purchase price and the average value of similar vehicles are under $3,000. Vehicles registered as Collector, Classic, Street Rod, or Pioneer, plus fire trucks, pay a flat $150. Motorcycles, motor homes, pickups, trailers, vans, and commercial trucks are all motor vehicles taxed at the standard rate.[7]
Sources
- www.revenue.state.mn.us/guide/motor-vehicle-sales · verified 2026-08-27
- www.revenue.state.mn.us/guide/miscellaneous-motor-vehicle-sales · verified 2026-08-27
- www.revenue.state.mn.us/guide/nontaxable-transactions-0 · verified 2026-08-27
- www.revisor.mn.gov/statutes/cite/168.27 · verified 2026-08-27
- www.revisor.mn.gov/statutes/cite/168.091 · verified 2026-08-27
- dps.mn.gov/divisions/dvs/vehicle/vehicle-title-and-registration-those-new-mn · verified 2026-08-27
- dps.mn.gov/divisions/dvs/vehicle/vehicle-fees/vehicle-sales-tax · verified 2026-08-27