How Is Cost For Vehicle Tabs Calculated?
MINNEAPOLIS (WCCO) -- A report from the state auditor last week found Minnesota drivers may be over or undercharged for their car tabs.
In Minnesota, how much a driver pays each year to renew depends on the value of their car.
Flo from Roseville and Jerry from Rogers asked: How is the cost for car tabs determined? Good Question.
Each passenger vehicle starts with a $10 administrative fee in addition to a $6 filing fee for renewals.
In some counties, there's also a local wheelage tax that can be up to $20. In Hennepin County, it's $10 and in Ramsey County, it's $20. There is no wheelage tax in Anoka County.
The rest of the cost is based on the base value of the passenger vehicle. By state law, that base value is the manufacturer's suggested retail price (MSRP) when the car is brand new plus a shipping fee, also known as a destination fee.
State law stipulates the MSRP can come directly from the manufacturer, a nationally recognized association compiling automotive industry data or information from a source likely Kelley Blue Book or Edmunds. Once that initial base value is established, it stays with the car, even if the car changes ownership.
The legislative auditor's report found the different sources can offer different base values, which is problematic for some car owners.
"Minnesota's current vehicle registration process allows for variability in the base value amount, which can result in inconsistent taxation among owners with similar vehicles," the report states.
Each year, the value of the car drops by 10 percentage points. During the first year of the vehicle's life, the assessment is based on 100 percent of the base value. It's 90 percent for the second year, 80 percent for the third year, 70 percent for the fourth year and so on. In year 10, the state stops calculating the value and gives the flat rate sum of $25.
If car owners believe their valuations are off, they can request a refund. They need to provide data showing it's incorrect and fill out a form that's available on the DVS website or in DVS offices.