Wheelage Tax and Local Option Sales Tax For Transportation
- MAP: Local Option Taxes for Transportation (includes Wheelage Tax, Local Option Sales Tax, and Aggregate Materials Tax)
- FAQs: Wheelage Tax and Local Option Sales Tax
The revenue from this wheelage tax must be used for “highway purposes” as outlined in the Minnesota Constitution and must be deposited in a county’s Road and Bridge fund. Counties have the option of collecting the tax themselves or having the state’s Department of Public Safety's Driver and Vehicle Services Division collect it and then distribute back to the county.
The state says that the fee must be uniform in all counties that enact the wheelage tax because the state’s computer system cannot accommodate variations in the tax from county to county.
Counties were only able to decide whether or not to levy the wheelage tax for next year, but the $10 amount may not vary. Beginning in 2017, the cap will be raised to $20 and counties will have the flexibility to set the amount of the tax anywhere up to the cap.
The wheelage tax is added to license tab renewal fees. Vehicles are taxed in the county that corresponds to the address on the tab statement. If the vehicle is kept outside the county (i.e. at the owner’s cabin), the owners can indicate a change in the location where the vehicle is kept at the time of tab renewal. Several categories of vehicle are not subject to the wheelage tax, including: motorcycles and mopeds, trailers and semitrailers, all-terrain vehicles, vehicles not subject to annual registration (i.e. collector vehicles), tax exempt, and state-owned vehicles.
Counties that did not implement a wheelage tax this year still have the option to do so in future years by letting the state know by August 1 of any year for enactment the following year.