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S.F. No. 3497 - Vehicle Registration Modifications (First Engrossment)
Author: Senator Mary Kiffmeyer
Prepared By: Alexis C. Stangl, Senate Counsel (651/296-4397)
Date: March 9, 2020


Section 1 modifies the method for determining vehicle registration.

Paragraphs (a) and (b) propose that vehicle registration tax be determined on the manufacturer’s suggested retail price (MSRP) of the vehicle. Under current law, the tax is based on “base value,” which is MSRP plus the destination charge.  For vehicles registered prior to the effective date of this act, the tax will continue to be set on MSRP plus destination charge.  In both the bill and the current law, this amount is in addition to a base $10 tax.

Paragraph (c) allows an auto dealer to determine the registration tax amount based on MSRP.  This remains unchanged.  The registrar must use the value determined by a dealer as allowed by paragraph (d).

Paragraph (d) requires the registrar to determine MSRP using one of the following methods, in order of priority:  (1) from information published by the manufacturer or any nationally recognized association compiling such data; (2) the amount determined by the dealer as provided in paragraph (c); (3) from the “Monroney sticker” or “window sticker” that lists the information about a car for sale; or (4) the actual sales price of the vehicle.

Paragraph (e) specifies that the registration tax is determined at the initial registration.

Paragraphs (f) and (g) provide the depreciation schedule.  For registration purposes, the MSRP for a vehicle is depreciated by ten percent each year. It is this amount, plus $10, that is the registration tax paid. The portion of the registration tax based on MSRP must never be less than $25. The depreciation schedule remains unchanged in this bill.

Paragraph (h) is a “hold harmless” provision that says that the amount of registration tax due on a vehicle must not exceed the smallest amount previously paid on the vehicle. This is not changed by the bill.

Paragraph (i) creates two exceptions to the hold harmless provision in paragraph (h).  First, if the tax is determine based on actual sales price as provided in paragraph (d), the commissioner must adjust the tax amount based on one of the other three methods provided in paragraph (d) within two years of the initial registration.  Second, the commissioner must adjust the amount to correct an error or omission that was made in determining or entering the registration tax amount or the destination charge amount.  In either case, the adjusted amount is effective for the next registration period. The commissioner must notify the owner of a vehicle if the vehicle’s registration tax amount has been adjusted.

Several paragraphs in current law are stricken. Former paragraph (c) provides that if the manufacturer's list price contained a single VIN with various descriptions and suggested retail prices, the registrar must select the lowest price.  Former paragraph (d) allows a registrar to determine the base value of a specially constructed vehicle based on the cost price to the purchaser or owner.  Former paragraphs (e) and (f) sort base values into classes and set the base value at the middle point of each class.

The changes in paragraph (a) to (g) are effective January 1, 2021. Paragraphs (h) and (i) are effective July 1, 2020.


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