Total Range for 2025
| Base state sales tax rate | 6.88% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | 0%-1.5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 6.875%-8.375% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in Minnesota is 6.875%, but since the local rates range from 0-1.5% the total sales tax range is 6.875-8.375%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
Let’s say you’re running a small clothing store in Minneapolis, Minnesota. A customer wants to buy a t-shirt for $20.00 (before tax).
Sales Tax:
- Sales Tax = Item Price x Sales Tax Rate
- Sales Tax = $20.00 x 6.875%
- Sales Tax = $1.38 (rounded to two decimal places)
Final Price:
- Final Price = Item Price + Sales Tax
- Final Price = $20.00 + $1.38
- Final Price = $21.38
Nexus: Why do you need to collect sales tax in Minnesota?
If you’re selling goods and services in Minnesota then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.
Two types of nexus exist:
- Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Minnesota, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within Minnesota exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
In Minnesota, there is also a transaction threshold of 200, which means that even if your sales aren’t over $100,000 if you’ve sold more than 200 items then you still need to pay sales tax.
Services
- Generally, services are not taxable in Minnesota.
- However, there are exceptions. Sales tax applies to services if they directly result in the creation or manufacturing of a tangible good.
Goods
- Retail sales of tangible personal property are taxable in Minnesota. This includes most physical items you sell. There are some exceptions though.
Freight/Shipping
- Shipping and freight charges are generally taxable if they are part of the sale of a taxable good.
- If you separately charge for shipping and freight of a nontaxable good, they may not be taxable.
Clothing
- In Minnesota, clothing suitable for general use is exempt from sales and use tax, but certain categories of clothing are taxable.
- Sales tax applies to clothing accessories, fur clothing, pet clothing, protective clothing, and sports or recreational equipment.
Electronics
- All electronics are subject to sales tax in Minnesota
SaaS
- SaaS is not taxable in Minnesota
Digital Products
- Specified digital products (such as online video and computer games), and digital codes are taxable. However, digital photographs, drawings, charts, graphs, data or financial reports, and access to digital news articles are exempt.
Software
- Generally, pre-written software is considered tangible personal property and therefore taxable.
- Custom software development services may be exempt.
How to register for sales tax in Minnesota
Before you make any taxable sales in Minnesota, you must register for a Minnesota Tax ID Number and a Sales and Use Tax account.
Here’s how to register:
- Online: Go to the Minnesota Department of Revenue’s Business Tax Registration https://www.mndor.state.mn.us/tp/eservices/_/. This is the recommended method for faster processing and confirmation.
- By phone: Call the department at 651-282-5225 or 1-800-657-3605 (toll-free).
Additional Information:
- You’ll need your North American Industry Classification System (NAICS) code when registering. You can find your NAICS code using a search tool on the U.S. Census Bureau website https://www.census.gov/naics.
- After registering, you’ll receive a confirmation with a temporary password to access the e-File Minnesota system for filing and paying taxes electronically.
How to collect sales tax in Minnesota
To collect sales tax in Minnesota:
- Register: Get a Sales and Use Tax account.
- Know the Rate: Use a state tax calculator to find the combined sales tax rate for your area.
- Collect at Sale: Add the sales tax to the sales price at checkout. Most systems do this automatically.
- Keep Records: Track your sales and sales tax collected.
- Remember: File and pay sales tax electronically (details on filing frequency can be found on the state’s website).
How to get a sales tax permit/license in Minnesota?
In Minnesota, you don’t obtain a traditional “sales tax permit” or license. Instead, you need to register for a Minnesota Tax ID Number and a Sales and Use Tax account. This accomplishes the same purpose of authorizing you to collect and remit sales tax on taxable sales within the state.
Here’s how to register:
- Online: This is the recommended method for faster processing. Head to the Minnesota Department of Revenue’s webpage.
- Phone: Call the department.
When are Minnesota’s sales tax returns due?
The due date for your Minnesota sales tax return depends on your filing frequency, which is determined by your total sales volume. Here’s a breakdown:
- Monthly Filers: If your total sales tax liability is expected to be $1,000 or more in a quarter, you’re considered a monthly filer. The return and payment for monthly filers are due by the 20th day of the following month.
- Quarterly Filers: Businesses with a projected sales tax liability of less than $1,000 per quarter but at least $1,000 annually fall under quarterly filing. The return and payment for quarterly filers are due on the last day of the month following the end of the quarter.
- Annual Filers: Businesses with a projected annual sales tax liability of less than $1,000 are considered annual filers. The annual return, however, is due on a different date: February 5th of the following year
Is anyone exempt from sales tax in Minnesota?
Exempt Items: Certain goods and services are not subject to sales tax regardless of who purchases them. Here are some common examples:
- Clothing and apparel for general use (with some exceptions like fur clothing, sports equipment, and protective gear)
- Food (grocery items)
- Prescription and over-the-counter drugs for humans
- Services (except for a few specific situations where the service directly creates a tangible good)
Exempt Organizations: Certain non-profit organizations may qualify for an exemption from paying sales tax on purchases they make. However, this exemption is not automatic and requires approval from the Minnesota Department of Revenue. Here are some organizations that might qualify:
- Charitable organizations
- Religious organizations
- Educational organizations
- Senior citizen groups (meeting specific requirements)
- Cemeteries owned by religious organizations
Do I Have to Collect Sales Tax from Minnesota Customers if I Sell on Amazon, Walmart, eBay, or Etsy?
No.
Minnesota has a marketplace facilitator law requiring platforms like Etsy and Amazon to collect sales tax for third-party sellers on their platforms. However, if a marketplace facilitator’s sales are under $100,000, they don’t need to register, collect, or remit Minnesota sales tax.
