Is it a fee or a tax?

When Gov. Tim Pawlenty created the “health impact fee” on a pack of cigarettes years ago, there was plenty of wailing that the “no new taxes” governor had raised taxes by couching it as a “fee.”

There’s been — at least so far — very little similar kvetching about the fees for renewing your license tabs in Minnesota. And, today, the Minnesota House of Representatives’ Finance Committee passed along a bill that raises one of the fees — the “administrative fee” from $4.50 to $6.

It’s either that or raise the actual registration tax, which is at least deductible on federal income taxes for filers who itemize their deductions. Fees are not deductible.

Rep. Rick Hansen said the bump is needed to keep locally based deputy registrars afloat, according to the Associated Press.

Where does the fee money go? Into the “vehicle services operating account,” which — according to the state statute is used for:

(1) designing, producing, issuing, and mailing vehicle registrations, plates, emblems, and


(2) collecting title and registration taxes and fees;

(3) transferring vehicle registration plates and titles;

(4) maintaining vehicle records;

(5) issuing disability certificates and plates;

(6) licensing vehicle dealers;

(7) appointing, monitoring, and auditing deputy registrars; and

(8) inspecting vehicles when required by law.

Is it a fee or a tax?survey software


  • TJ

    The mere fact that anyone of adult age can possibly take this sort of childish sophistry seriously explains so much about the state of our nation and public discourse.

    Main Entry: tax

    Function: noun

    Usage: often attributive

    Date: 14th century

    1 a : a charge usually of money imposed by authority on persons or property for public purposes.

  • John O.

    If my memory is correct, Tim from Eagan ran afoul of Grover Norquist with the “Health Impact Fee” on tobacco. Even Grover knows when a duck by any other name is still a duck.

  • JackU

    I couldn’t respond to the poll because you didn’t have the option to answer “yes”.

    Personally I consider any money the government collects for the purpose of running government operations a tax. That said some taxes are also fees because the are levied as part of the process of gaining something directly from the state. (e.g. licenses tabs or an ID card) These are targeted taxes as opposed to the Sales Tax or Income Tax that you pay and don’t receive a direct benefit from the State. In these cases the benefit is indirect. For example: it is impractical to charge a “fee” (tuition?) for K-12 education. We consider it a “public good” that children should get an education. As a result we pool the resources of the state to help pay for it.

    So your example of the administrative fee is a tax that is also a fee.

  • JT

    Its still extra money coming out of the little guys pocket because someone cant do their job and they have to find the extra money somewhere. Its a joke.

  • BJ

    JackU (are you the Jack I know????)

    Why is it impractical to charge a “fee” (tuition?) for K-12 education.

    Not that I would want to but

  • JackU

    @BJ (I don’t know if I’m the Jack you know.)

    I would contend that it is impractical to charge a fee for K-12 because as a society we want to make sure that access to education at this level is not contingent on the child’s (by way of parents or other sources) being able to pay. Sure we could develop some mechanism to provide assistance for those who need it, but that would require a bureaucracy to manage it that would most likely use up any additional revenue provided by the tuition.

    I guess my original point was that we, as a society, tag certain services as wholly communal enterprises and don’t expect people to pay directly for the benefit they receive. We as members of the society pay into the state’s general fund and that money pays for these services. Why? Again its because of the value you put on the services to the whole of the society and the realization that the cost may be beyond what the individual receiving the services can afford.