Pending Legislation
House Bill 3562: Motor Vehicle Tax Reduction
Introduced: Representative Patti Anderson (R-033A)
Summary: The bill decreases the percentage and amount of the state’s motor vehicle tax within the state. For vehicles registered before November 16, 2020, the tax will go from $10 plus 1.54 percent to 1.25 percent the percent of the manufacturer’s suggested retail price of the vehicle. For vehicles registered on or after November 16, 2020, $10 plus 1.575 percent to 1.285 percent the percent of the manufacturer’s suggested retail price of the vehicle. During the next ten years of the vehicle’s life, the percent of the manufacturer’s suggested retail price of the vehicle that is taxed will also decrease.
Design-Build Impact: The bill would drastically impact funding for the Highway distribution fund, town highway funds, and other transportation funds within the state. These funds would lose around $160 million in FY 2027 when this bill would take effect, and nearly $792 million for the next fiscal biennium. This would severely impact a number of current and future design-build projects that MnDOT and its highway funds were and are planning to engage in within the years to come.
Last Action: March 31, 2026: The bill has been introduced and is currently within the House Committee on Transportation Finance and Policy, the bill failed to advance to the Ways and Means Committee after a 7-7 tie vote.
Status: In Committee.
DBIA Position: Oppose
DBIA Priority Level: High