Sales Tax

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Lemon Law

A refund of sales tax may be issued when a new vehicle is returned to a dealer or manufacturer under the Minnesota Lemon Law. The refund is based on 6.5 percent of the buyback price, not the original purchase price.

Reference: Minnesota Statutes, 325F.665, 297B.031

  • The applicant must complete and sign section A of the Claim for Motor Vehicle Refund (PS2511).

  • The applicant must provide a written explanation in section D of the PS2511.

  • A copy of the title that was assigned to the dealership and a copy of the arbitration decision showing what the customer was awarded must be submitted with the PS2511.

  • If the dealer is the applicant, they must submit a copy of the check they issued to the customer as well as written authorization for the refund check to be issued to them.

    When directly involved with a refund, motor vehicle manufacturers and dealers must provide the consumer with itemized statements listing each of the amounts refunded.

    If a manufacturer or dealer fails to list the sales tax separately, or if they do not apply for a refund themselves within one year, the department may directly refund the sales tax to the consumer and/or lien holder.