Minnesota Licensed Dealer Exemptions
Held for Resale: Vehicles held for resale by a Minnesota licensed dealer are exempt from sales tax.
What you need to know:
- To qualify for the sales tax exemption, the dealer seeking to title the vehicle must be a Minnesota licensed dealer
- If the vehicle is being titled in joint ownership, the transfer is not exempt.
- If the dealer is titling a "new" vehicle, the dealer must be licensed as a new car dealer franchised to sell that make of vehicle. Used car dealers, or new car dealers not franchised to sell that make of vehicle will need to title the vehicle in their name and pay sales and registration tax.
- Dealers that sell small utility trailers (GVW 3,000 pounds or less) do not need a dealer license. However, they must supply their Minnesota sales and use tax number.
- Dealers that sell snowmobile and boat trailers are required to be licensed.
- This exemption only applies to vehicles a dealer is holding for resale. A vehicle that the dealer is purchasing for business use must be titled and registered in the name of the dealer. Sales tax and registration tax is due.
- A dealer may elect to pay general sales tax to the Department of Revenue. In the sales tax declaration on the title or PS2000, record the dealer license number, note "business use" and "tax paid under 297A" in the sales tax declaration.
- Record exemption code #8 and the dealer's Minnesota dealer license number (or Minnesota sales and tax number if small utility trailer dealer) in the sales tax declaration area of the title or PS2000.
Daily Rentalaily Rental
If a vehicle is a daily rental, the dealer must provide their dealer license # and note "daily rental" in the sales tax declaration area on the title or PS2000. The dealer submits tax on daily rental vehicles to the Minnesota Department of Revenue.