State of Minnesota Sales Tax The 2016 Minnesota State Sales Tax

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What is the 2016 Minnesota Sales Tax Rate?

Minnesota Sales Tax Rate

6.88%

2016 Minnesota state sales tax
Exact tax amount may vary for different items

The Minnesota state sales tax rate is 6.88%, and the average MN sales tax after local surtaxes is 7.2%.

  • Groceries, clothing and prescription drugs are exempt from the Minnesota sales tax
  • Counties and cities can charge an additional local sales tax of up to 1%, for a maximum possible combined sales tax of 7.88%
  • Minnesota has 231 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
  • Minnesota has a lower state sales tax than 67.3% of states

Counties and cities in Minnesota are allowed to charge an additional local sales tax on top of the Minnesota state sales tax (as well as tax specific items) with special government permission. The state sales tax is allocated as follows:

  1. 3.5% - Minnesota General Fund
  2. 3/8% - Arts and environmental projects
Raw groceries and clothing as well as prescription drugs are all exempt from taxation, but alcoholic beverages are taxed an additional 2.5% over the general state sales tax rate for a total tax of 9.375%.

If you are a Minnesota business owner, you can learn more about how to collect and file your Minnesota sales tax return at the 2016 Minnesota Sales Tax Handbook .

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Minnesota Sales Tax Exemptions

Minnesota doesn't collect sales tax on purchases of most prescription drugs, clothing and groceries. Prepared Food is subject to special sales tax rates under Minnesota law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.

Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Minnesota does not treat candy or soda as groceries, which means they are not subject to reduced grocery sales tax rates. Other items including gasoline, alcohol, and cigarettes are subject to various Minnesota excise taxes in addition to the sales tax.

In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The MN sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Minnesota's sales tax rates for commonly exempted items are as follows:

Groceries: EXEMPT Clothing: EXEMPT Prepared Food: 10.775% Prescription Drugs: EXEMPT Non-Prescription Drugs: 6.88%
Minnesota sales tax for a restaurant meal
$100 Restaurant Dinner
Minnesota sales tax for groceries
$100 of groceries
Minnesota sales tax for clothing
$100 in clothes
Minnesota sales tax for general consumer products
$100 of consumer products
$10.78 sales tax
$110.78 total
$0.00 sales tax
$100.00 total
$0.00 sales tax
$100.00 total
$6.88 sales tax
$106.88 total

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Minnesota Sales Tax Exemption Certificate

Unlike a Value Added Tax (VAT), the Minnesota sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Minnesota Sales Tax Exemption Form to buy these goods tax-free.

Companies or individuals who wish to make a qualifying purchase tax-free must have a Minnesota state sales tax exemption certificate, which can be obtained from the Minnesota Department of Revenue . On making an exempt purchase, Exemption Certificate holders may submit a completed Minnesota Sales Tax Exemption Form to the vendor instead of paying sales tax.

Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Minnesota sales tax code) can be downloaded from the Minnesota Department of Revenue here .

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Minnesota Sales Tax Calculator

 Sales Tax Calculator
Purchase Details:
$ in zip code Enter the zip code where the purchase was made for local sales tax

Whenever you make a purchase at a licensed Minnesota retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Minnesota sales tax calculator.

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Minnesota Use Tax [View Main Article]

If you buy goods and are not charged the Minnesota Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 6.88% sales tax (less any foreign sales tax paid) for these items yourself as the Minnesota Use Tax.

Your are expected to voluntarily list your liable purchases on a Minnesota Use Tax Return, which should be attached with payment to your Minnesota Income Tax Return. Historically, compliance rates with with the Minnesota Use Tax have been low.

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Minnesota Local Sales Taxes

Minnesota does not allow local jurisdictions like cities or counties to collect a local sales tax. The Minnesota state sales tax of 6.88% is applicable statewide. You can view the sales tax rates for various cities in Minnesota here.


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