Minnesota: Sales Tax Handbook
Minnesota Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
|6.875%||0.00% - 1.50%||0.252%||7.127%||8.375%|
2016 Minnesota Sales Tax Handbook
Minnesota Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
Minnesota's Sales Tax By The Numbers:
Minnesota has a higher-than-average sales tax, including when local sales taxes from Minnesota's 48 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 17th highest by combined state + local sales tax
Ranked 24th highest by per capita revenue from state + local sales taxes ($944 per capita)
Rankings by State Sales Tax Only:
Ranked 3rd highest by state sales tax rate
Ranked 18th highest by per capita revenue from the statewide sales tax ($928 per capita)
Printable PDF Minnesota Sales Tax Datasheet
Minnesota has a statewide sales tax rate of 6.875%, which has been in place since 1967.
Municipal governments in Minnesota are also allowed to collect a local-option sales tax that ranges from 0.00% to 1.50% across the state, with an average local tax of 0.252% (for a total of 7.127% when combined with the state sales tax). The maximum local tax rate allowed by Minnesota law is 1.50%. You can lookup Minnesota city and county sales tax rates here.
This page provides an overview of the sales tax rates and laws in Minnesota. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Minnesota Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in Minnesota?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Minnesota taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the Minnesota sales tax see Minnesota sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Minnesota? Taxation of vehicle purchases in particular are discussed in the page about Minnesota's sales tax on cars.
Are services subject to sales tax in Minnesota?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Minnesota, specified services are taxable.
About the Minnesota Sales Tax
The state of Minnesota has a relatively simple sales tax rate, and utilizes a flat state tax rate. The tax rate is made up of two parts; a large part is given to the state's general funds, and the remainder is given to the arts and environmental projects. In addition to the state tax rate, there are county taxes or local city taxes, which will vary significantly depending on which jurisdiction you are in. These local tax rates would be in addition to the state rate.
Is the Minnesota Sales Tax Destination-Based or Origin-Based?
Minnesota is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Minnesota from a Minnesota vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
Is Minnesota a Streamlined Sales Tax State?
Minnesota is a member of the Streamlined Sales and Use Tax Agreement, which means that the Minnesota Department of Revenue has taken significant steps to simplify Minnesota's sales tax rules and administration process.
Contact the Minnesota Department of Revenue
The Minnesota Sales Tax is administered by the Minnesota Department of Revenue. You can learn more by visiting the sales tax information website at www.revenue.state.mn.us.
Phone numbers for the Sales Tax division of the Department of Revenue are as follows:
- Local Phone: (651) 296-6181
- Toll-Free Phone: (800) 657-3777
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Minnesota sales taxes, we recommend the following books:
Simplify Minnesota sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Minnesota Sales Tax Rates by Zip Code:
Need an updated list of Minnesota sales tax rates for your business? Download our Minnesota sales tax database!