Minnesota vs South Dakota
Registering a new $35,000 vehicle costs about $1,494 in South Dakota versus $3,013 in Minnesota — a $1,519 first-year advantage for South Dakota.
Cost comparison
| Minnesota | South Dakota | Difference | |
|---|---|---|---|
| First-year total All-in cost to register a new $35,000 gas vehicle for the first time, including sales tax, title, and registration. | $3,013 | $1,494 | +$1,519 |
| Annual renewal (year 2+) Recurring annual cost after the first year — what you actually pay every year you own the car. | $518 | $76 | +$442 |
| Sales tax (one-time) Sales/use/excise tax owed at purchase on a $35,000 vehicle, using typical local rates. | $2,406 | $1,400 | +$1,006 |
| Combined sales tax rate State rate plus typical local rate (where applicable). | 6.88% | 4.00% | +2.88 pp |
| EV first-year total Same $35K scenario but as a battery electric vehicle, capturing EV-specific surcharges. | $3,088 | $1,544 | +$1,544 |
| EV annual renewal Recurring EV-ownership cost in year 2+. | $593 | $126 | +$467 |
| EV surcharge Annual EV-specific registration fee (zero in states without one). | $75 | $50 | +$25 |
How each state structures it
Minnesota
Minnesota uses a value-based registration tax that's rare in its structure: $10 base fee plus 1.575% of the vehicle's original MSRP times an age depreciation factor that starts at 100% and decreases by ~10 percentage points per year, eventually flattening at a $20 minimum from year 11 onward. Combined with a 6.875% Motor Vehicle Sales Tax (MVST), full trade-in credit, and modest title/filing fees ($8.25 + $11), Minnesota is mid-cost overall. The Twin Cities metro counties all charge a $20/year county wheelage tax; rural counties may charge $10 or nothing. EVs pay an extra $75/year. A new $35,000 vehicle in Hennepin County (Minneapolis) runs about $3,050 in first-year costs, with annual renewals around $585 in year 1 dropping to about $115/year by year 10.
South Dakota
South Dakota has one of the lower vehicle tax burdens in the US: a 4% Motor Vehicle Excise Tax replaces sales tax (no local additions), full trade-in credit, no annual ad valorem, no state income tax, and no required inspections or emissions testing. Registration is weight + age tiered ($72/year for typical passenger; 30% discount for vehicles 10+ years old). Title fee is just $10. County wheel tax can add up to $60/vehicle in participating counties. EV surcharge is $50/year (low by US standards). A new $35,000 vehicle in South Dakota runs about $1,503 in first-year costs (mostly the $1,400 excise tax + $76 registration + small fees), with annual renewals around $76.
What this means for you
- Buying a new car: South Dakota is roughly $1,519 cheaper than Minnesota in the first year on a $35K vehicle, driven mostly by sales tax and one-time fees.
- Annual renewal: South Dakota is cheaper to renew annually by about $442/year. Over a 5-year ownership period that's roughly $2,212 in renewal-fee savings alone.
- If you drive an EV: South Dakota's EV surcharge ($50/year) is meaningfully lower than Minnesota's ($75/year) — a 33% savings on the EV fee alone.
- Structural differences: Neither state imposes an annual ad valorem vehicle property tax, so renewal costs stay relatively flat after the first year for both.
Frequently asked questions
Is it cheaper to register a car in Minnesota or South Dakota?
South Dakota is cheaper to register a new $35,000 vehicle: $1,494 first year vs $3,013 in Minnesota, and the gap continues into annual renewals.
What is the sales tax difference between Minnesota and South Dakota?
Minnesota charges 6.88% combined sales tax on vehicles; South Dakota charges 4.00%. On a $35,000 purchase that's $2,406 in Minnesota vs $1,400 in South Dakota.
Do Minnesota and South Dakota both charge EV registration fees?
Minnesota: $75/year EV surcharge. South Dakota: $50/year EV surcharge. EV fees are added on top of standard registration costs.
Official sources: Minnesota DVS • South Dakota DOR Motor Vehicle Division
Data last updated: 2026-05-23