Sales Tax in Minnesota: Complete Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Sales Tax in Minnesota: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Minnesota’s state sales tax rate is ~6.875%, which is among the higher state rates in the nation. Local jurisdictions can add their own taxes, pushing combined rates as high as ~8.875% in parts of the Twin Cities metro area. Minnesota stands out for its generous exemptions on clothing and unprepared food, which significantly reduces the effective sales tax burden for everyday consumers. However, the state applies sales tax broadly to many services and digital goods that other states exempt.
Minnesota Sales Tax Rates (2026)
| Component | Rate |
|---|---|
| State sales tax | ~6.875% |
| Minneapolis local rate | ~0.50% |
| St. Paul local rate | ~0.50% |
| Hennepin County (transit) | ~0.50% |
| Ramsey County (transit) | ~0.50% |
| Highest combined rate (Minneapolis) | ~8.875% |
Combined Rates by Major City
| City | Combined Rate |
|---|---|
| Minneapolis | ~8.875% |
| St. Paul | ~8.875% |
| Duluth | ~7.875% |
| Rochester | ~7.375% |
| Bloomington | ~7.375% |
| St. Cloud | ~7.375% |
| Mankato | ~7.375% |
What Is Taxable in Minnesota
Taxable Items
Minnesota applies sales tax to a broad range of goods and services:
- General merchandise (electronics, furniture, appliances)
- Prepared food and restaurant meals
- Soft drinks and candy
- Digital goods (downloaded music, movies, software, streaming services)
- Motor vehicles (subject to ~6.50% Motor Vehicle Sales Tax)
- Utilities (residential electricity at a reduced rate)
- Parking services
- Laundry and dry cleaning
- Telecommunications services
- Pet grooming and boarding
Exempt Items
Minnesota provides important exemptions:
- Clothing: Most clothing items are fully exempt from sales tax (one of only a handful of states with this exemption)
- Unprepared grocery food: Food for home preparation is exempt
- Prescription medications: Fully exempt
- Medical devices: Exempt when prescribed
- Agricultural inputs: Feed, seed, and farm machinery
- Manufacturing equipment: Exempt for qualifying production uses
- School supplies: Exempt during certain periods
How Minnesota Sales Tax Works
Registration and Collection
Businesses selling taxable goods or services in Minnesota must register with the Minnesota Department of Revenue for a Sales and Use Tax ID. Registration can be completed online through the department’s e-Services portal.
Filing Frequency
| Annual Tax Collected | Filing Frequency |
|---|---|
| Under ~$500 | Annual |
| ~$500 — ~$10,000 | Quarterly |
| ~$10,001 — ~$120,000 | Monthly |
| Over ~$120,000 | Monthly (accelerated deposits may be required) |
Use Tax
Minnesota imposes a use tax at the same rate as the sales tax on purchases made out of state where no tax was collected. Consumers can report use tax on their Minnesota income tax return (Form M1) or file a separate use tax return.
Economic Nexus
Minnesota requires remote sellers to collect sales tax if they exceed:
- ~$100,000 in retail sales to Minnesota customers, or
- ~200 or more retail transactions with Minnesota customers
in the current or previous 12-month period. Marketplace facilitators have the same obligations.
Special Sales Tax Situations
Motor Vehicle Sales Tax
Minnesota imposes a separate Motor Vehicle Sales Tax (MVST) of ~6.50% on vehicle purchases rather than the general ~6.875% rate. Trade-in values are subtracted from the purchase price before the tax is calculated:
| Component | Amount |
|---|---|
| Vehicle price | ~$40,000 |
| Trade-in credit | ~$12,000 |
| Taxable amount | ~$28,000 |
| MVST (~6.50%) | ~$1,820 |
Food and Beverages
| Item Type | Taxable? |
|---|---|
| Unprepared grocery food | Exempt |
| Prepared food (restaurants, heated, served) | Taxable (~6.875% + local) |
| Candy | Taxable |
| Soft drinks | Taxable |
| Alcohol | Taxable (plus excise taxes) |
| Dietary supplements | Taxable |
Clothing Exemption Details
Minnesota’s clothing exemption covers most items worn on the body, including:
- Shirts, pants, dresses, coats, and jackets
- Shoes and boots (including athletic shoes)
- Undergarments and hosiery
- Baby clothing and diapers
Items NOT exempt include:
- Fur clothing (subject to tax)
- Sports equipment and protective gear (helmets, pads)
- Accessories (jewelry, watches, handbags) — these ARE exempt as clothing in Minnesota
- Costumes (taxable if primarily ornamental)
Comparison to National Average
| Metric | Minnesota | National Average |
|---|---|---|
| State rate | ~6.875% | ~5.09% |
| Average combined rate | ~7.49% | ~7.12% |
| Groceries exempt | Yes | Varies |
| Clothing exempt | Yes | Varies (most states tax clothing) |
| Digital goods taxed | Yes | Varies |
Minnesota’s rate is above average, but the clothing and grocery exemptions make the effective burden lower for everyday spending.
Tips for Managing Minnesota Sales Tax
-
Take advantage of the clothing exemption. Minnesota is one of only ~4 states that fully exempt clothing from sales tax, making it a smart place for wardrobe purchases.
-
Understand the food distinctions. Unprepared food is exempt, but anything heated, served with utensils, or sold for immediate consumption is taxable.
-
File and pay on time. Late payments incur a ~5% penalty plus interest. Use the department’s e-Services portal for electronic filing.
-
Claim the vehicle trade-in credit. The MVST applies to the net purchase price after subtracting your trade-in value.
-
Track use tax. Report out-of-state purchases on your Minnesota income tax return to stay compliant.
-
Verify local rates. Twin Cities metro area transactions may carry additional transit and local taxes that push the combined rate above ~8.00%.
-
Leverage manufacturing exemptions. Qualifying production equipment and industrial materials are exempt from sales tax in Minnesota.
Key Takeaways
- Minnesota’s state sales tax is ~6.875%, with combined rates reaching ~8.875% in Minneapolis and St. Paul.
- Clothing and unprepared grocery food are exempt from sales tax, a significant benefit for consumers.
- Digital goods and many services are taxable, broader than many other states.
- Motor vehicles are taxed at a separate ~6.50% MVST rate with trade-in credits.
- Remote sellers must collect if they exceed ~$100,000 in revenue or ~200 transactions.
- The clothing exemption covers most worn items, including shoes and outerwear.
Next Steps
- Federal Income Tax Guide 2026 — Sales tax deductions on your federal return.
- State Income Tax Rates Comparison 2026 — Minnesota’s overall tax burden.
- Tax Bracket Calculator — Estimate your combined tax liability.
- Self-Employment Tax Guide — Sales tax compliance for Minnesota businesses.
- Find a CPA Near You — Get help with Minnesota sales tax compliance.