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SF54 (Legislative Session 94 (2025-2026))

In lieu tax imposed on older passenger automobiles and collector vehicles expansion to motorcycles

AI Generated Summary

Purpose

  • The bill changes Minnesota tax law to expand the in lieu tax program. Specifically, it adds motorcycles to the vehicles that are subject to the in lieu tax, which previously applied to older passenger automobiles and collector vehicles. It establishes a 10% tax on the purchase price for qualifying vehicles described in section 297B025 subdivision 1, items 110, 111, and 112, to replace the tax that currently applies under subdivision 1.

Main Provisions

  • Tax change: Imposes a 10% in lieu tax on the purchase price of certain vehicles described in Minnesota Statutes 297B025 subdivision 1 (specifically items 110, 111, 112). This replaces the existing tax referenced in subdivision 1.
  • Expanded scope: Applies the in lieu tax to motorcycles in addition to the existing coverage for older passenger automobiles and collector vehicles.
  • Statutory amendments: Updates Minnesota Statutes 2024 as follows:
    • Section 297B02, subdivision 2 (the in lieu tax for older passenger automobiles or motorcycles) is amended to implement the 10% rate on the specified vehicles.
    • Section 297B02, subdivision 3 (and 297B025) are amended to reference and define the vehicles described in subdivision 1, items 110, 111, 112.

Significant Changes to Existing Law

  • Expansion of in lieu tax eligibility: The in lieu tax now covers motorcycles in addition to older passenger automobiles and collector vehicles.
  • Tax rate change: The in lieu tax rate is set at 10% of the purchase price for eligible vehicles.
  • Vehicle scope defined by statute: The vehicles subject to the tax are those described in 297B025 subdivision 1, items 110, 111, 112.

Potential Impact and Considerations

  • Buyers of eligible older passenger automobiles or motorcycles described in the specified statute may face higher upfront costs due to the 10% in lieu tax.
  • The change could influence the market for older or collector vehicles within the described categories.
  • Revenue implications for Minnesota state taxes may change due to the expanded base and new rate.

Definitions / Key Concepts

  • in lieu tax
  • older passenger automobile
  • motorcycle
  • collector vehicle
  • purchase price
  • Minnesota Statutes 2024
  • section 297B02
  • section 297B025
  • subdivision 1, items 110, 111, 112

Relevant Terms - in lieu tax - older passenger automobile - motorcycle - collector vehicle - purchase price - 10% rate - 297B02 - 297B025 - subdivision 1 - items 110, 111, 112

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
January 16, 2025SenateActionIntroduction and first reading
January 16, 2025SenateActionReferred toTransportation
February 03, 2025SenateActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Extends the in-lieu tax to motorcycles.",
        "Imposes a 10% tax on the purchase price of passenger automobiles or motorcycles described in 297B025 subdivision 1."
      ],
      "removed": [],
      "summary": "The bill amends Minnesota Statutes 2024 section 297B02, subdivision 2, to expand the in-lieu motor vehicle tax to motorcycles and set a 10% tax on the purchase price for vehicles described in section 297B025 subdivision 1.",
      "modified": [
        "Amends 297B02, subdivision 2, to implement the expanded scope and rate."
      ]
    },
    "citation": "297B02",
    "subdivision": "subd 2"
  },
  {
    "analysis": {
      "added": [
        "References the vehicle description for the in-lieu tax as described in 297B025 subdivision 1."
      ],
      "removed": [],
      "summary": "The bill references Minnesota Statutes 2024 section 297B025 subdivision 1 as the vehicle description that qualifies for the in-lieu tax under the expanded 297B02 subdivision 2.",
      "modified": []
    },
    "citation": "297B025",
    "subdivision": "subd 1"
  }
]

Progress through the legislative process

17%
In Committee

Sponsors

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