Minnesota tax policy: How can this be legal ?

[ownyourfuture]

I recently used a $3.00 rebate for Centrum Silver vitamins.
The price was $11.00, $8.00 after the rebate. The total came to $8.87
I thought that sounded a little high, but I was really tired and didn't think anything of it until the next day. Long story short, Minnesota charged sales tax on the full price of $11.00 ?

Another example is the taxes/fees Minnesota charges for your annual auto registration. (The stickers you buy and place on your license plates every year)
Through research, I found that Minnesota bases the amount you pay on the MSRP + destination charges. Sounds fair enough. But through research, I found that even if you buy the vehicle below that price, your annual registration fees/taxes are based on the 'full price'

I laughed when I found out the response from Bruce Gordon:
Director of communications for the Department of Public Safety when someone questioned him on this.

“The state statute says the fee is equal to $10 plus 1.25 percent of the value of the car. The value of the car is determined by the manufacturer’s suggested retail price (MSRP) & any destination charges”

“The reason it’s done that way is that if you get a better deal than I do in buying that vehicle, we want to still pay the same taxes, so that’s fair”

That's so MINNY-SODA
God I'm beginning to despise this state.

By the way, I just got my renewal notice for my 2012 Ford escape limited.
This will be the fifth year of licensing this vehicle and the stickers still cost $220.00

 

[Senator]

I recently used a $3.00 rebate for Centrum Silver vitamins.
The price was $11.00, $8.00 after the rebate. The total came to $8.87
I thought that sounded a little high, but I was really tired and didn't think anything of it until the next day. Long story short, Minnesota charged sales tax on the full price of $11.00 ?

It really all depends on how they log the coupon. If it is a discount coupon, like a grocery store, the tax is based on the amount you actually pay.

A rebate is a full price item, less the rebate.

MN is a high tax state, because we have a lot of expenses a lot of other states do not. Cold weather breaks up roads, and it costs more to plow snow, etc.

If you are low income, we also have a great healthcare system. Virtually free, if you make less than $24K a year. The DGF is going to use it for retirement healthcare, at 45 years of age.

 

[ownyourfuture]

It really all depends on how they log the coupon. If it is a discount coupon, like a grocery store, the tax is based on the amount you actually pay.

A rebate is a full price item, less the rebate.

Doesn't justify the practice of charging taxes on a dollar amount that doesn't exist.

MN is a high tax state, because we have a lot of expenses a lot of other states do not. Cold weather breaks up roads, and it costs more to plow snow, etc.

As a resident of the state of Minnesota for all my 54 years, I know Minnesota is a high tax state. I will have lived in my home 22 years this July, and I would need about 10 sets of hands to show you how many times I've seen & been awoken by the snowplows going past when we've literally had a dusting of snow, & nothing but sparks flying up from the plow.


If you are low income, we also have a great healthcare system. Virtually free, if you make less than $24K a year. The DGF is going to use it for retirement healthcare, at 45 years of age.

That statement shows why Minnesota is such a high tax state, & why certain types of people find it so attractive. My prediction is that it will implode someday. Dayton & the DFL never met a new tax they didn't love. Eventually they'll drive enough people out, that they'll be no one left to pay the tab.

Do you post in the comments section at one of the two Minneapolis-St. Paul papers ? Your avatar looks really familiar.

 

[bingybear]

actually I think this is true in many states. I believe it has more to do with how the offer is made. If this is a sale price... thus the price was changed verse a cents off where the price is the same and the reduction occurs after the tax is calculated. Watch out when you buy cars with a rebate verse a negotiated price.

 

[Hamlet]

I'm pretty happy to pay Minnesota taxes. I compare the educational system and state services here compared to my home state of Wisconsin and feel glad to be here. Businesses appear to agree, since we have very low unemployment, and pretty strong wages. Comparing the economic performance between the two states makes me think we are doing something right.

It's funny how much the tabs bug people though.

 

[Lurking]

It doesn't help you at all, but maybe it will feel better to know it isn't just Minnesota that has tax policies that are in the interest of maximizing revenue.

A close friend of mine spent about $60k on an airplane on the east coast and flew it home to California. He knew he would need to pay use tax (similar to sales tax, if you aren't familiar) so he correctly budgeted for that. He was surprised when the personal property tax bill came because the assessed value was for ~$66k.

When he called to ask, they responded that the plane was clearly worth $66k, as that was his total out-of-pocket cost, not the $60k price. It seems that it is standard for this office to mark up reported sales prices by the use tax automatically. I'll grant that the argument has some merit (on both sides), but to him it feels that he is paying property taxes on his plane and on the sales tax of his plane, every year.


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[Winter]

We solve the tabs issue on our vehicles by simply staying with older vehicles. Problem solved.

 

[ownyourfuture]

I'm pretty happy to pay Minnesota taxes. I compare the educational system and state services here compared to my home state of Wisconsin and feel glad to be here. Businesses appear to agree, since we have very low unemployment, and pretty strong wages. Comparing the economic performance between the two states makes me think we are doing something right.

It's funny how much the tabs bug people though.

It bugs me because they're already obscenely high versus most states, & they would've been raised even more if the DFL had been able to push through their $.16 per gallon gas tax, which also included hiking tab's/stickers.

I am not anti-tax. I fully realize there's a need for firemen, police, schools, transportation, etc, & these must be funded with tax revenue. I simply believe that Minnesota goes too far at times & eventually it could backfire.

And I'll repeat my original question, how can it be legal for a state to base a tax (be it a sales tax, a usage tax, or something else) on a price that wasn't realized ?

By that line of thinking, the state and/or the federal government could say to you, "you bought 200 shares of XYZ corp @ $20.00 per share and later sold @ $30.00. Since we really need tax revenue, we're going to 'pretend' you sold them @ $32.00 so we can collect 'additional' capital gains revenue/tax.

 

[mn54]

Where's Jesse V when you need him. He brought down the cost of lic tabs when he was in office.

 

[Zathras]

It cuts both ways.
If you got the nav, stereo, sunroof, power seat, or other options, the tab fee doesn't account for those.
It is the Base MSRP of your model.

Frankly, we need to dedicate the license fees and state gas tax for infrastructure. No more of this general funds garbage. Then, if that isn't enough, increase user fees.

Perhaps that way we won't have interstates falling into our rivers?

 

[ownyourfuture]

Where's Jesse V when you need him. He brought down the cost of lic tabs when he was in office.

Indeed he did. But as soon as he was gone, they raised them.

 

[rodi]

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