Legislative Update from Rep. Ben Bakeberg

Dear Friends,

I have heard from many of you asking about the new tax increases that were passed last session, some of which are starting July 1. Remember: we started session with a $17.5 billion budget surplus, but instead of focusing on permanent, meaningful tax relief Democrats voted to give you nearly $10 billion in tax hikes. These tax increases include:

Vehicle Registration Tax/Tabs: This tax hike averages to be a 36% increase over the first 11 years of your new vehicle. The change will apply to taxes payable for a registration period starting on or after January 1, 2024.
Filing Fee increases: Filing fees will increase to $8 on every vehicle registration renewal, excluding pro rate transactions. This section is effective October 1, 2023.
50 Cent Delivery Fee on retail deliveries over $100: The fee will be implemented on deliveries over $100. Exemptions include deliveries for groceries, prepared food, baby products, and feminine hygiene products. The tax would begin on July 1, 2024, and is the largest delivery tax in the U.S.
$6 Fee Increase for Driver licenses: This is effective July 1, 2023, and applies to applications made on or after that date.
Gas Tax Automatic Increases for Inflation: The expected gas tax hike beginning January 1, 2024 is 5 cents/gallon over four years. Drivers will pay an additional $423 million over four years, which will hurt family budgets.
Metro Area Sales Tax Increase: A 0.75% increase in the 7-county (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington) Metro Sales Tax will be used to fund increased spending on transportation projects. The bulk of the money will go toward Metro Transit funding, and it is widely expected that much of this money will be used to pay for the enormous cost overruns on SW Light Rail project. An additional 0.25% increase in the Metro Sales tax will go to pay for rental housing programs in the same counties. This combined 1% increase in the Metro Sales Tax will make everyday purchases more expensive for families throughout the Metro.
Increase in Motor Vehicle Sales Tax from 6.5% to 6.875%: Will give Minnesota the 5th highest vehicle sales tax rate in the U.S. This section is effective for sales and purchases made on or after July 1, 2023.

It is disappointing to see Minnesotans taxed more when they should have received permanent, meaningful tax relief. You can learn more about these tax increases by clicking my photo below:

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