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Transportation Funding & Financing

State Motor Vehicle Sales Taxes

State sales taxes imposed on motor vehicle sales typically are not considered transportation-specific revenues, because they are directed to general funds with sales taxes collected on other transactions. However in some states, the sales tax on motor vehicles is dedicated to transportation purposes.

One notable example is in Minnesota where the dedication of the Motor Vehicle Sales Tax (MVST) to transportation was enacted by 1981 legislation, to be phased in from 1984 to 1990. However, because of poor economic conditions in the 1980s, the money was delayed and the legislation eventually repealed. In 2001, new legislation brought a partial return of the MVST to transportation, with a full phase-in guaranteed by 2012 following a constitutional amendment passed in 2006.