Dear Neighbors,
I hope you have enjoyed your summer so far! I’ve enjoyed seeing so many of you out and about during the first month of summer at local events and parades. Please continue reaching out to me with questions or comments about ways we can work together to build stronger communities for everyone.
This legislative session was driven by a risky agenda of the majority party. We all know that every session includes things we like and others we don’t, but this session was very different in that as much as I worked to find compromise, there was an unwillingness to do so. This session and the current majority are committed to the idea that really big government is THE solution to every issue affecting society.
I fear this approach, and the massive spending is sustainable, but until we regain some balance in the Legislature, we’re forced to deal with the impact of what’s happening.
Tax Increases Coming
This year’s legislative session saw Democrats and Gov. Walz raise taxes on Minnesotans by nearly $10 billion despite a $17.5 billion budget surplus. While I advocated for returning the surplus to you through historic tax relief, we were unsuccessful in working with majorities in the House and Senate to provide you with the relief you deserve.
Today, I want to draw your attention to some of the transportation-related tax increases that will be going into effect soon. Some of these increases will take effect on July 1st, others will show up later this year or earlier next year. Here’s a rundown of some of what you can expect:
- Vehicle Tab Increases: The average driver will see a 36% increase in tab fee costs over the first 11 years of owning a new vehicle, but some will see a 50% increase. For example, the owner of a $40,000 vehicle previously would have paid $524 in tab fees in year one, $472.60 in year two, and so on. Now, the owner of this same car will pay $832.40 for tabs the first year and $524 in the second. This takes effect on January 1st, 2024.
- Filing Fee increases: Filing fees will increase to $8 on every vehicle registration renewal, excluding pro-rate transactions. These new fees begin on October 1st, 2023.
- Largest in the Nation tax on retail deliveries over $100: More than $189 million over four years is expected to be collected from Minnesotans who shop from home thanks to this new tax. The tax will be applied to deliveries over $100. There are some exemptions for groceries, prepared food, baby products, and feminine hygiene products. The tax begins 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 gas tax hike beginning January 1, 2024, is 5 cents to begin with and future increases are now tied to inflation. In total, drivers can expect to pay $423 million over four years.
- Auto Parts Sales tax changes: This 0.75% increase in the 7-county Metro Sales Tax for Transportation will see 83% of funds go toward Metro Transit funding and 17% will be sent to Metro Counties for local road projects. This takes effect on October 1st, 2023.
- Increase in Motor Vehicle Sales Tax from 6.5% to 6.875%: This change will give Minnesota the 5th highest Vehicle sales tax rate in the U.S. Someone buying a $40,000 car will hand over $150 more totaling $2,750.00 in sales taxes. This section is effective for sales and purchases made on or after July 1, 2023.
These increases apply to just transportation-related expenses. There are many more tax increases included throughout the budget that was approved in late May. I plan to provide additional updates on these in the coming weeks.
4th of July
Finally, I’d like to wish you and your family a safe and joyous Independence Day! I encourage you to attend local celebrations and to make plans to watch fireworks in the area. We are so blessed to live in an amazing community, and I hope you can take advantage of some of the local events happening over the weekend and into next week!
Staying in Touch
While the 2023 legislative session may be over, my work for you, your family, and our communities doesn’t stop. That’s why I encourage you to continue reaching out to my office if you need assistance in a matter related to state government. I can be reached at 651-296-4315 or rep.danny.nadeau@house.mn.gov.
Have a good day,
Danny