If you‘re planning to buy a used car in Minnesota, sales tax and other fees can add to your total cost. Forewarned is forearmed; let’s see what you’ll owe in taxes and fees.

Minnesota’s vehicle sales tax is called the Motor Vehicle Sales Tax (MVST), and it is 6.5% of the vehicle’s purchase price. In addition to the MVST, you will also owe registration, title transfer, and license plate fees.

When buying a car from a private seller in Minnesota, you owe 6.5% of the vehicle's purchase price in MVST. The MVST is collected by deputy registrars when you register your vehicle with the Minnesota Driver and Vehicle Services (DVS).

In many states, cities or counties (or both) can levy local sales taxes on top of the state’s flat car sales tax rate. Minnesota is no different: many counties add an “excise tax” to vehicle purchases. Confusingly, the state goes so far as to declare that there are no local Minnesota sales taxes on vehicle purchases—but there are excise taxes. Same thing, different name. A tax is a tax.

To make the Minnesota tax system even more, ahem, interesting, DVS collects local tax on behalf of some counties, while other counties collect their own tax. If you live in one of the following counties, you’ll pay all your taxes to DVS when you register your vehicle. If you’re not in one of the following counties, you’ll pay the state’s 6.5% to DVS and your county’s portion to—your county. We recommend making an inquiry at your county clerk or local DVS office to find out more.

Most low-value cars are subject to different tax rules. The 6.5% sales tax does not apply to passenger vehicles that are at least ten years old, or to collector vehicles.

Beyond the purchase price and sales tax, there are other fees involved with purchasing a car in Minnesota. Unless you meet an exemption, tax is due every time you transfer a vehicle’s title in Minnesota.

Here’s what that will cost you:

1. Vehicle title transfer: $8.25 (duplicate title is $7.25)
2. Public safety vehicle fee: $3.50
3. New license plates: $15.50 ($13.50 for a single plate; single plates are available only for 1972 and older, and collector vehicles)
4. Technology surcharge: $2.25 (due with every change to the title, unless the only change is adding or removing a lien holder)

If you fail to title your newly purchased vehicle within 10 business days of the sale, you’re subject to a $2 late transfer penalty.

For more fees involved with vehicle titles and license plates, refer to the official Minnesota Driver and Vehicle Services fee chart.

In a private party sale, you pay the car tax when you register the vehicle, at which time you’ll also pay for Minnesota registration. The registration fee is determined by the vehicle’s base value and age.

To register a vehicle, go to your local DVS office with the following documentation:

In Minnesota, sales tax on used cars is calculated based on the vehicle's purchase price. If you’re buying the car from a private party, you owe sales tax, the same as if you went to a dealership. The Minnesota tax code makes no distinction between private-party and dealer transactions.

Some people get the brilliant idea to negotiate a low “official” purchase price and pay the remainder in a side transaction, thinking they’ll get out of paying a chunk of taxes. That won’t work, as the DVS is way ahead of you.

If the DVS suspects that the purchase price of the vehicle was artificially decreased, they will calculate sales tax based on the car’s fair market value. The DVS establishes what the car is worth on the open market by referring to the Kelley Blue Book, Edmunds, or other reliable sources of information about used car prices. If the DVS concludes that the car's fair market value is greater than the selling price, the sales tax can be assessed based on the fair market value.

Here's how to pay car sales tax in Minnesota after buying a used car from a private seller:

1. You and the seller must complete the necessary paperwork to transfer ownership of the vehicle, including the vehicle bill of sale (when you buy a car on PrivateAuto, we provide an official Minnesota bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). To transfer vehicle ownership in a private transaction, you’ll need the following documents:
2. The original car title with an odometer reading and the seller’s signature
3. The buyer’s valid driver’s license or IDs
4. Calculate the amount of sales tax you owe. In Minnesota, the sales tax amount for a car is determined by multiplying the price of the car by the current state sales tax rate. For example, if you buy a $10,000 car, the sales tax would be $650 ($10,000 times 0.065), plus any local tax due depending on the county you live in.
5. Sign the Application to Title or Register a Vehicle. You will need to show proof of insurance and to fill out the Odometer Disclosure Statement on the application.
6. Submit payment for all taxes and fees.
7. Once you've paid the sales tax and turned in the necessary paperwork, you'll get your new registration and title. The title and registration will show that you bought the car and that the sales tax has been paid. You will also get new license plates. If you buy a car in a state that levies no sales tax and register it in that same state, you won’t pay Minnesota sales tax if you later register it in Minnesota—so long as the car was used in the original state for at least 60 days. If you immediately register your new-to-you car in Minnesota after purchasing it in another state, you’ll pay the Minnesota sales tax.

To pay your sales tax online, refer to the official Minnesota state guide.

If you’re in the market for a used car, you need to figure out how much sales tax you owe. While you don’t have to be a rocket scientist to calculate taxes, it can be a hassle to get to the bottom of your total sales tax amount.

With PrivateAuto’s used car sales tax calculator, figuring out sales tax has never been easier. This free online tool makes it hassle-free to calculate how much tax you have to pay on a used car purchase based on the purchase price of the car.

There’s no way around it: property taxes, income taxes, sales taxes, and other taxes are part of life. You must pay sales tax when you buy a private-party vehicle in Minnesota unless you meet an exemption.

Certain individuals and organizations are exempt from paying the MVST. These tax exemptions apply only to sales taxes and not to other fees related to buying a used car, such as registration or title costs.

Here are some sales tax exemptions for used vehicle purchases in Minnesota:

Many people think buying from car dealers is a great way to avoid hassle (and perhaps a fee here and there). In fact, when you go to a dealer, you end up paying more.

When you buy a car from a dealer, you pay all the same taxes and fees that you’d pay if you bought it from a private party. Dealers have a way of rolling it all up in the fine print, but the charges are still there.

Perhaps more significantly, nine times out of ten, you’ll pay more for a used vehicle when you buy it from a dealer compared to buying the same vehicle from a private seller. Cut out the middleman and get the best price possible by transacting peer-to-peer on PrivateAuto.

Additionally, dealerships charge a "documentation fee" above and beyond all the other taxes and fees you have to pay. The documentation fee in Minnesota is a maximum of $275 for 2023, effective July 1.

We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. In fact, that’s why PrivateAuto exists. We give you dealer-like convenience while enabling peer-to-peer transactions with regular folks like yourself.

Avoid documentation fees and get lower prices when you shop used cars from private sellers right here on PrivateAuto.

Conduct private car transactions easily and safely with PrivateAuto. Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app financing to secure messaging to integrated payments.

PrivateAuto allows you to negotiate the price you want, schedule the test drive meetup, and pay for the car—all within our app without compromising your personal information.

Whether you want to buy a vehicle or are trying to sell your used vehicle for top dollar, PrivateAuto will help you get the deal done.

Get started with PrivateAuto today.

Here’s how you can sell your car in Minnesota with a few simple steps:

1. Gather necessary documentation
You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately, so you’re not scrambling to find it at the moment of completing a sale.

2. Register on PrivateAuto and get verified

To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.

3. List your car

Easily create your PrivateAuto listing with our step-by-step guide. Bonus: we include a window brochure with a QR code scannable to your listing.

4. Set your terms

It’s your car, so you drive the deal! You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified according to your preferences.

5. Vet incoming offers

Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal info is protected: no more giving out your phone number or email address. All communication happens in our app.

6. Choose a buyer

When you find an offer you like, accept it and proceed to the next step with that buyer.

7. Schedule a meeting

The buyer will want to look at your car. No more back-and-forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test drives and coordinate a time and place for meetings. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)

8. E-sign documents

After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.

9. Get paid, instantly

Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.

10. Transfer title

When you sell your vehicle, fill out the necessary information on the back of the Certificate of Title and sign in order to transfer ownership of the vehicle to the new owner.