Decrease the sales tax to 3.4375% on the purchase of used cars and increase the sales tax to 13.875% on new cars.

 

To encourage the sale of used cars over new cars to lessen Carbon Dioxide emissions from vehicle manufacturing.

 

 

Car manufacturing significantly impacts our environment. A typical passenger vehicle emits about 4.6 metric tons of

carbon dioxide per year (United States Environmental Protection Agency). To manufacture a car, an estimated average of

5.85 metric tons of CO2 is produced. (Save the sound). This bill would decrease the number of cars manufactured,

therefore lowering Carbon Dioxide emissions. The sales tax is collected when and where the car is registered. This Bill

is under Minnesota Statute 297B.02 subd. 2 and subd. 3, but adds onto subd. 1.

 

Used car: A car previously owned for at least two years, having been manufactured in 1994 or later

Car: Runs primarily on roads, seats one to eight people, has four wheels, and mainly transports people rather than

cargo. (Oxford Dictionary)

Carbon Dioxide emissions: Emissions stemming from the burning of fossil fuels and the manufacture of cement (European

Commission)

Sales Tax: A tax on sales or on the receipts from sales. (Oxford Dictionary)

In Minnesota, the tax is 6.875%. (Minnesota Department of Revenue)

Car Manufacturing: The production of passenger cars. (Statista)

 

Minnesota makes 1.13 billion dollars yearly on the sales tax on all cars. Because 67.64% of the total sales tax from

cars is from the purchase of used cars, when halving the sales tax on used cars, the sales tax on new cars must be

increased to recover the lost funds due to the lowering of the used car tax. The new sales tax is calculated by

averaging out the loss from lowering the sales tax on used cars. The average sales tax is still 6.875%.

 

This bill does not need to be enforced. It is not possible to waive sales tax when purchasing a car.

 

January 1st, 2027