MOTOR VEHICLE: TAX: BASIS FOR COMPU'I`ING: Motor Vehicle registration tax must
be based upon base price as listed on window sticker. Minn. Stat. § 168.013.
632e-1
August 18. 1994
Iohn R. Wildes
Assistant Director
Departrnent of Public Safety
Driver and Vehicle Services Division
120 Department of Transportation
395 John Ireland Boulevard
St. Paul. MN 55155
ln your memorandum to Attorney General Hubert H. Humphrey, III, you present
substantially the following:
FACTS
The Department of Public Safety, Driver and Vehicle Services Division (DVS)
administers the motor vehicle registration tax provision in Minn. Stat. § 168.013, subd. la
(1992). The tax is predicated on the vehicle's base value. DVS determines motor vehicle base
values by referring to price lists provided by manufacturers for their vehicle models. 'l'hese
price lists include a category labeled “MSRP," or Manufacturer’s Suggested Retail Price.
assigned to each vehicle model. Each vehicle model is also described by a portion of the
Vehicle Identification Number (VIN), hereinafter referred to as "VIN identifier." which is also
included on the price lists. 'I`he VIN is a federally standardized motor vehicle identification
system, DVS uses the VIN identifiers to administer the registration tax provisions by
identifying vehicles according to their VIN identifiers and assigning the corresponding MSRP
as the base value.
For most vehicles, different MSRPs are accompanied by different VIN identifiers, so
using VIN identifiers to identify base values and administer the registration tax program is a
simple matter. However, some manufacturers cluster different vehicle configurations under
the same VIN identifier and assign each vehicle a different MSRP. 'I`he vehicles usually differ
in configurations of engine type, transmission type, body type variations, standard equipment
packages and/or available options. When multiple MSRPs are provided for vehicles with the
same VIN identifier. administration of the registration tax program becomes very difficult.
Moreover, under each of these VIN identifiers, DVS has considered all of the different
configurations with their different MSRPs to be tax exempt equipment separately added to the
same base vehicie. which base vehicle was intended to be the object of the taxable base value.
'l`herefore, DVS uses each VIN identifier's lowest MSRP for the base valu:..
lohn R. Wildes
Page 2
Auoust 18, 1994
You then ask substantially the following:
QUESTION
Does Minn. Stat. § 168.013. subd. la(b) permit DVS to assign the lowest
Manufacturer’s Suggested Retail Prlce (MSRP) for each Vehicle ldentification
Nurnber (VIN) identifier category as the motor vehicle’s "base value" for
purposes of the annual registration tax?
OPINION
We answer your question in the negative.
Minn. Stat. § 168.013. subd. la(a) sets the annual motor vehicle registration tax at "SlO
plus an additional tax equal to 1.25 percent of the base value." Section 168.013. subd. la(b)
defines "base value ":
‘base value’ means the manufacturers suggested retail price of the vehicle
including destination charge as reflected on the price listing affixed to the vehicle
in conformity with United States Code. title 15, sections 1231 to 1233 (Public
Law Number 85-506) or otherwise suggested by the manufacturer or determined
by the registrar if no suggested retail price exists. and shall not include the cost of
each accessory or item of optional equipment separately added to the vehicle and
the suggested retail price.
Thus. in order to determine whether DVS’ practice complies with this statute. two interrelated
questions must be answered:
(l) What is the "manufacturer’s suggested retail price" (MSRP); and
(2) What are "accessor[ies] or itemls] of optional equipment separately added
to the vehicle and the suggested retail price. "
Section 168.013, subd. la{b) is unambiguous in stating that the MSRP is found on the
price listing affixed to the vehicle in conformity with 15 U.S.C. §§ 1231-1233. which is
commonly referred to as the window sticker. The window sticker must be affixed to the new
vehicle by the manufacturer prior to the delivery of the vehicle to any dealer. 15 U.S.C.
,lohn R. Wildes
Page 3
.l`tucrust 18 , 1994
§ 1232. The price listing requirements for the window sticker are found in 15 U.S.C.
§ 1232(0. which states that the following information must be disclosed:
(l) the gtail price of such automobile suggested by the manufacturer;
(2) the retail delivered price suggested bv the manufacturer for each
accessory or item of optional equipment, physically attached to such automobile
at the time of its delivery to such dealer, which is not included within the price of
such automobile as stated pursuant to paragraph (1);
(3) the amount charged. if any, to such dealer for the transportation of
such automobile to the location at which it is delivered to such dealer:
(4) the total of the amounts specified pursuant to paragraphs (1). (2).
and (3).
15 U.S.C. § 1232('0. [Emphases added.]
Thus, several different prices are found on the window sticker. as reflected on the
attached window sticker for a 1994 Jeep Cherokee Country: a base price, prices for separately
listed options, a transportation or destination charge, and a total price. See Exhibit A.
In our opinion. the price listed pursuant to 15 U.S.C. § 1232 (f)(l) (the "base price" on
Exhibit A) is the MSRP referred to in Minn. Stat. § 168.013. subd. la(b). It is readily
apparent that neither section 1232(f)(2) nor section 1232(0(3) are MSRPs. That leaves a
choice between section 1232(0(1) and section 1232(f)(4). In our judgment. section lZBZ(f)(l)
is the MSRP for several reasons.
First, the parallel language and structure of the statutes suggests that section 1232(f)(1) is
the state’s definition of MSRP. Section 168.013, subd. la(b) refers to "manufacturer’s
suggested retail price.“ The identical words are simply reordered in section 1232(f)(l} as
"retail price . . . suggested bv the manufacturer.“ This language is not found in
section 1232(0(4). Also, neither the state definition of MSRP nor section 1232(5(1) include
the accessories and options. lndeed. the identical language is used to describe these separately
listed cost items in section 1232(f)(2) and their exemption from the MSRP in
John R. Wildes
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Auqust 13, 1994
subdivision la(b). i_£g, "each accessory or item of optional equipment." These items`
inclusion in the section 1232(f}(4) price but exclusion from both the state MSRP a;td
section 1232(1`)(1) suggests that the latter two refer to the same MSRP.
Second. the federal legislative history supports the above interpretation lt refers to
section 1232(_1")(1) as the "suggested price of the car." and to section 1232(1")(4) as the "LQLa_l
manufacturers suggested retail price" temphasis addedl. 1958 U.S. Code Cong. and Adm.
News. p. 2903.
Third. if the MSRP were section 1232('1`)(4). it would not have been necessary to
separately specify -'.he transp ‘rr'-'tir=-'\. or destination charges in subd. 1a(b). because they are
already included in section lZ.§'.».f,!{~i).
Fourth. a parsing of the statutory language leads to the conclusion that the separately
added items exempt from state tax arc tire section 1232(0(2) items. As noted before. the state
exemption language and section 1232(f)(2) are very similar, with each bracketed portion
having its counterpart in the other Statute: "Ieach accessory or item of optional equipment]
[separately added] [to that vehicle] [and the suggested retail price}" (subd. 1a(b)) almost
certainly refers to "[each accessory or item of optional equipment], [physically attached to
such automobile at the time of its delivery to such dealer. which is not included within the
price] lof such automobile] [as stated pursuant to paragraph (l)]" (section 1232(f)(2)). Note
that the counterpart to the "suggested retail price" in subd. la(b) is the price in "paragraph (l)"
i_._e_g, section l.232{f)(l), referenced in section 1232(f)(2). Importantly, the counterpart to the
"separately a.:lded" language is the portion referring to items attached to the vehicle at delivery
but not included in the base price. Also. even though the equipment categorized by the
manufacturers as optional came from the factory attached to the vehicle, they are nevertheless
separately listed by the manufactu.ers on the window sticker. As a result. they are separately
John R. Wildes
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ll.ucrtlst 18, 1994
added to the section 123?.(t)(l) base price. just as are the items listed pursuant to section
1232(f)(2) when computing the total pursuant to section 1232(0(4).
'l`he options are also not included in the manufacturers own price list MSRPs. Although
the different price list MSRPS reflect the different vehicle configurations of engine type.
transmission type, body type variations and/or available options. analysis of the price lists
indicates that their MSRPs do gpt include equipment categorized by the manufacturer as
options but which are i_n f_a_tg added to the vehicle at the factory. 'l`hus. they appear to be
"separately added" to the vehicle. Since the options are separately added to both the vehicle
and to the section 1232(f)(1) price. the section 123?.(1`)(11 price is the "suggested retail price"
referenced at the end of section 168.013. subd. la(b). lt should also therefore be the
"manufacturer‘s suggested retail price" referenced at the beginning of section 168.013,
subd. la(b), which is the base value when combined with the destination charge.
The fifth reason why the MSRP in section 168.013, subd. la(b) is the section 1232(f)(l)
price is that the different model configurations of standard equipment are included in the
section 1232(f;(1) price listed on the window sticker. The standard features are also included
in the MSRPs on the manufacturers price list which become the window sticker MSRPs.
They are not "separately added" to a base vehicle and to the suggested retail price as required
under section 168.013. subd. la(b) for exemption from tax.
Because the exempt equipment must be "separately added" to the vehicle and the
suggested retail price, and the suggested retail price refers to the section 1232(0(1) price
reflected on the window sticker, all equipment included in the section 1232(f)(l) price is
included in the base value and subject to the tax. The standard equipment in their various
configurations are included in the section 1232(9(1) price and are thereby part of the base
value and subject to the tax.
John R. Wildes
Page o
Auc_iust 13 , 1994
Finally, the manufacturers price list MSRP. which DVS has used as the MSRP under
subd. la(b), appears to be the same actual dollar amount as the section 1232(f)(l) price on the
window sticker. For the Jeep. the section 1232(f`)(l) or base price of $19.366 is nearly
identical to the MSRP of 319.266 on the manufacturer’s price list for the model code
corresponding with the VIN identifier tJ?S). See Exhibits A and B. The 5100 difference is
probably due to a mid-year price hike (the price list is dated August. 1993 and the window
sticker was provided in March. 1994).
All of these foregoing factors lead to the conclusion that the MSRP in section 168.013.
subd. la(b) refers to the price listed on the window sticker pursuant to section 1232(1`)(1), or
the "base price." The "base value" under Minn. Stat. § 168.013. subd. la(b) is. therefore, the
15 U.S.C.§ 1232(1)(1) price plus the destination charge. lt does not include accessories or
options listed pursuant to section 1232(0(2) or added at the dealer.
Also for these reasons. DVS’ practice of using the lowest MSRP for each VIN identifier
on the manufacturer’s price list conflicts with section 168.013. subd. la(b). The MSRP must
be listed on the window sticker. lt appears from the available information and from the
foregoing analysis that each of the several MSRPs under the same VIN identifier are l.sted as
their own section 1232(0(1) base prices on the window stickers for the respective vehicles.
Therefore, each of these several MSRPS represent different base values for registration tax
purposes.
DVS has suggested that the Legislature intended only to tax the n.t:e basic.
pre-multiple~standard configuration vehicle. and. to capture some of the value of various
combinations of extra equipment, added 510 and 114% to the original proposal of 1% of base
value. 'l` his may be the case; the legislative history is bare. llowever. the statutory scheme
set in place does not leave room to accommodate DVS` proposed definitions of extra or added
equipment, tied as it is to the federal law. Nor does the state statute permit adjustments to
John R. Wildes
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Auoust 13, 1994
accommodate the administrative problems now apparent in using VIN identifiers to identify the
base value and tax. To the extent that the VIN identifiers do not capture the information
necessary to administer the registration tax. the administration system must be modified to
comply with the statute.
Very truly yours,
HUBERT H. HUMPHREY III
Attorney General
RONALD S. LATZ
Assistant Attorney General
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