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MinnesotaSales Tax

A Complete Guide For Businesses

State Rate
6.875%

Local Tax
yes

State Portal
Department of Revenue

Phone
(651) 296-6181

General requirements

Minnesota is a destination-based state (sales are taxed where the buyer is located).

  • Sales tax is charged on the retail sale of tangible personal property (TPP) and taxable services
  • For distributors, items purchased for resale aren’t taxed

To file your return and pay sales tax:

Rates

The general sales tax rate is 6.875%. Additional local taxes apply. Local taxes imposed generally range from .05% to 6%. Restaurant sales are subject to specialized food and beverage local taxes in some jurisdictions.

How food is taxed

Groceries for home consumption are exempt from sales tax, while candy, soft drinks, and prepared foods are taxable.

Nexus in Minnesota

Business activities that establish a minimum tax connection to the state include:

  • Maintaining a physical place of business including a warehouse or distribution center
  • Having employees, independent contractors, or representatives working in the state
  • Delivering goods in business owned vehicles
  • Providing taxable services in the state

Online activities that establish nexus in Minnesota include:

  • Having an affiliate or referral relationship with a contractor or representative in the state
  • Sales from these referrals exceed $10,000 over 12 months

Find more information about nexus in Minnesota.

Filing schedule

Due dates are as follows:

  • Annual filers: February 5 of the year following the end of the tax period
  • Quarterly filers: 20th day of the month following the end of the tax period
  • Monthly filers: 20th day of the month following the end of the tax period

Registering to collect sales tax in Minnesota

To collect taxes in Minnesota a business must register with the Department of Revenue and apply for a MN tax ID.

You can apply online or register by phone.

After applying you'll receive a confirmation email with your MN tax ID.

Penalties

Failure to pay - If you don't pay your tax on time, the following penalties apply:

  • 5% of the tax due if the payment is 1-30 days late
  • 10% if it is 31-60 days late
  • 15% if it is more than 60 days late

Failure to file - Add an additional 5% to the above penalty if you also don’t file your return on time.

Interest is figured on the total tax plus penalty at 4% (adjusted annually) from the due date until the date the total is paid.