Bill simplifying vehicle title transfer fees wins committee approval

Buying a vehicle? That new car smell isn’t all that that’s coming with it.

Motor vehicle purchases in Minnesota are accompanied by a flurry of fees that often include a 6.5 percent sales tax and fees for title filing, registration, license plates and expedited or late title transfers.

Rep. Tim Mahoney (DFL-St. Paul) wants to remove what a group of Minnesota auto dealers say is the most confusing of those, and his proposed changes to vehicle titling fees aimed at simplifying the process for both buyers and sellers advanced Wednesday out of the House Transportation Finance Committee.

HF316, sponsored by Mahoney, would eliminate a $6.50 title transfer fee that Alyssa Schlander, vice president of external affairs for the Minnesota Automobile Dealers Association, told lawmakers is tacked on each time a new or used motor vehicle changes hands along its route to sale. The bill would do that by combining an existing $7.25 title fee and technology surcharge with the transfer fee into a single $8.25 fee.

The changes would be revenue-neutral.

“This is getting rid of a confusing and unfair fee,” Mahoney said.

The problem, Schlander told lawmakers, is that as a vehicle and its transfer title move along the wholesale route to purchase, the paperwork often doesn’t keep up. That often leaves dealers – who she said don’t have access to the title transfer count – guessing. She said it can lead to subsequent rebates to buyers for over-charging title transfer fees or paying the difference to the state if under-charged.

The bill was referred to the House Ways and Means Committee. A companion, SF300, sponsored by Sen. David Tomassoni (DFL-Chisholm), awaits action by the Senate Finance Committee.