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Taxes and Rates

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Sales tax is charged by the seller and applied to retail sales of taxable services and tangible personal property sold in Minnesota.

Sales tax is a transaction tax. The seller must look at each transaction to determine its taxability.

Sales tax is imposed at the state and local levels.

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Calculating Sales Tax [+]

To figure the sales tax rate, combine the state general tax rate (6.875 percent) and all applicable local tax rates (local taxes, special local taxes, and special taxes). Apply the total rate to the taxable sales price. Rate charts are available at various percentages. See Rate Charts.

You may either:

Add sales tax to the selling price. Show the tax separately on the receipt or invoice
Include sales tax in the selling price. Mark the item “tax included” on the receipt or invoice, or post a sign posted indicating that tax is included.

You must subtract the sales tax from your total receipts before filing your sales tax return. For more information, see Subtracting Sales Tax from Receipts.

Sales Price [+]

The sales price is the total of all charges that are part of the sale. If the item or service is taxable, these items are also taxable. Examples include:

retail price of a good or service
fabrication labor
delivery charges
installation labor
taxes that are the obligation of the seller
tips added to the bill by the seller
service charges
all other charges that are a condition of the sale

The sales price does not include:

credit allowed for trade-in
term discounts
cash discounts
taxes legally imposed on the customer
interest charges
finance charges from an extension of credit
coupons unless reimbursed by a third party

Local Sales Taxes [+]

Some cities and counties have local sales and use taxes. All sellers, regardless of location,– must collect local based on where the customer receives the taxable product or service.

To determine the sales tax rate, use the location where the customer receives the product,– typically a business or delivery address. We offer resources to help you determine the total tax rate (state and local) on our website. You can:

Use our Sales Tax Rate Calculator. If you have a street address, it will identify the nine-digit ZIP Code for you. Best to use when you have one or two addresses at a time.
Use our Sales Tax Rate Map. You can visually confirm your location of interest by entering an address.
Download our Sales Tax Rate Spreadsheet to use at your desk. You must know the nine-digit ZIP Code. Best for use when you have multiple nine-digit ZIP Codes to look up at one time.
Download our Sales Tax Rates and Boundaries Table to program into your point of sale system.

For more information, see:

Note: These options do not provide information on most special local taxes (see below) You must add any special local taxes to the total sales tax rate.

Special Local Taxes [+]

Special local taxes apply to specific types of sales, including:

Admissions
Entertainment
Food and beverages, including restaurants
Liquor
Lodging accommodations

Note: Some special local taxes are administered by a local government and not the Minnesota Department of Revenue. For questions, contact the city or county that administers the tax.

For more information on special local taxes administered by the department, see:

Special Tax Rates [+]

Some items have additional taxes in addition to the state general rate sales tax. These items include:

Motor vehicle short-term rentals, see the Motor Vehicle Industry Guide
Motor vehicle sales, see the Motor Vehicle Industry Guide
Liquor sales, beer, wine, and other alcoholic beverages, see the Food and Bar Establishments Industry Guide
Manufactured homes and park trailers, see Fact Sheet 150, Manufactured Homes, Park Trailers and Modular Homes
Waste management services, see Fact Sheet 1, Solid Waste Management Tax

Use Tax [+]

If you buy equipment, supplies, or other taxable items for your business and the seller does not charge Minnesota sales tax, you owe use tax on the cost of the items. If your business is located in an area with a local tax, you may also owe local use tax.

Some common situations where you may owe use tax include:

You buy taxable items or services online without paying sales tax
You withdraw an item from inventory to use (instead of selling it), donate, or give away
You buy taxable items outside of Minnesota
You buy taxable items in another Minnesota city or county with a lower or no local sales tax

For more information, see Fact Sheet 146, Use Tax for Businesses

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Taxes and Rates