Sales Tax
Question:
I am a Minnesota resident and am wondering if I save money on sales tax by buying in North Dakota where the tax rate is 1.5% less?
Answer:
The amount you pay for sales tax has nothing to do with where you purchase it. The determining factor for sales tax is where you are going to register your newly purchased vehicle. In most cases, you will register the vehicle in the State you reside so the sales tax charge will be based on that sales tax rate.
Let’s say you bought your vehicle in Minnesota but live in Fargo, North Dakota, and are getting North Dakota license plates. You will pay the North Dakota sales tax rate, currently 5%, plus North Dakota license and registration fees. If you buy a car in North Dakota and live in Minnesota, where the sales tax rate is currently 6.5%, you will still pay the higher Minnesota rate.
In many cases, it is cheaper to buy your car, van, truck, or SUV in Minnesota. Minnesota regulates the amount a car dealer can charge for “Doc Fees”, North Dakota let’s it’s new and used dealers charge what they want. Many North Dakota dealers charge as much as $399.00 or more for these fees. Minnesota dealers are capped at a fair and reasonable rate of $75.00.
Hope this has been helpful.
Dan Anderson
CarManDan
Muscatell Kia Moorhead, MN
