SF3853

Purpose and intent

• The bill changes how certain electric vehicles are taxed at registration. It aims to modify surcharges for allelectric vehicles and plug-in hybrid electric vehicles and to establish a vehicle weight surcharge. The overall goal is to raise revenue for transportation purposes by adding fees tied to EV ownership and vehicle weight, with funds directed to the highway system.

Main provisions

• New EV surcharge (Subdivision 1m): The bill creates an electric vehicle surcharge for allelectric vehicles, defined somewhere else in statute (section 169.011). The surcharge is in addition to the existing tax on the vehicle.
• How the surcharge is calculated:
  • It is the greater of:
  • a specified minimum amount, or
  • a calculation based on the vehicle’s price and age, described as: 0.5% of the manufacturer's suggested retail price (MSRP) multiplied by 2, times an age-based percentage (the percentage comes from existing law for the vehicle’s year of life, clauses 1–10). If the vehicle is in its 11th year or later, the surcharge is 10%.
• Minimum amounts by registration period:
  • $150 for a registration period beginning on or after January 1, 2026 and on or before June 30, 2027.
  • $100 for a registration period beginning on or after July 1, 2027.
• Revenue destination:
  • The money collected under this EV surcharge goes to the Highway User Tax Distribution Fund (HUTDF), with a clause that supersedes related provisions to ensure this allocation.
• Vehicle weight surcharge:
  • The bill also intends to establish a vehicle weight surcharge, though the specific details of that surcharge aren’t provided in the excerpt.

Changes to existing law

• Adds a new subdivision (1m) to Minnesota Statutes 2025 Supplement section 168.013 describing the electric vehicle surcharge.
• References to adding subdivisions 1m and 1n to Minnesota Statutes 168.013, indicating broader changes to how vehicle-related surcharges are handled.
• Amends the statutes to include EV surcharges and the new funding mechanism, while continuing to apply the existing registration taxes and fees.

Effective dates and implementation

• The new surcharge structure and minimum amounts apply to specific future registration periods:
  • Periods starting on or after January 1, 2026 through June 30, 2027 (minimum $150).
  • Periods starting on or after July 1, 2027 (minimum $100).
• Revenue collected under this provision is earmarked for the Highway User Tax Distribution Fund.

Significant changes at a glance

• Creates an electric vehicle surcharge separate from the existing registration tax, with a complex calculation tied to MSRP and vehicle age.
• Establishes two-tier minimum surcharges based on registration period.
• Shifts EV surcharge revenue into the Highway User Tax Distribution Fund.
• Proposes a vehicle weight surcharge (details not included here).

Relevant terms - electric vehicle - allelectric vehicle - plug-in hybrid electric vehicle - surcharge - surcharge amount - minimum amount - MSRP (manufacturer’s suggested retail price) - year of life (vehicle age) - registration period - Highway User Tax Distribution Fund - Minnesota Statutes 168.013 - Minnesota Statutes 2025 Supplement - subdivision - Notwithstanding - revenue allocation - vehicle weight surcharge