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September 01, 2026

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Use Tax for Individuals

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Individuals who purchase taxable items without paying sales tax may owe use tax. The information in this publication does not apply to businesses. See Use Tax for Businesses.

Use tax is the counterpart to sales tax. The Minnesota Use Tax rate is the same as the state general tax rate (6.875%) and includes all applicable local tax rates (local taxes, special local taxes, and special taxes). The same exemptions generally apply.

Many cities and counties in Minnesota have local sales and use taxes. You owe local use tax if you buy taxable items for use in these areas and did not pay the applicable local sales tax. See Local Sales and Use Taxes.

Some common situations where you may owe use tax include:

You buy taxable items or services online without paying Minnesota sales tax
You buy taxable items outside of Minnesota
You buy taxable items or services and the Minnesota seller does not charge you sales tax

Exemption Amount for Individuals

Individuals may buy up to $770 worth of taxable goods during the calendar year without paying use tax.

If you buy more than $770 of taxable items in a calendar year, all of your purchases are taxable.

If the items you’re buying are for use in a business, the $770 exemption does not apply. See Use Tax for Businesses.

Credit for Taxes Paid to Another State

You are allowed a credit for taxes on purchases that you were legally required to pay to another state or locality of another state. This includes:

State and local sales taxes
Cannabis taxes
Liquor taxes

Note: You are not allowed credit for customs duty charges or tax paid to other countries.

The credit is limited to the amount of tax imposed in Minnesota. You cannot claim a credit for more than the amount of sales and local taxes you would have paid had you made the purchases in the city or county in which you live.

If you paid the correct amount of Minnesota sales tax, but not the correct local sales tax, you may deduct the Minnesota sales tax paid when determining the use tax due on your purchases.

You still owe use tax to Minnesota if you paid a lower rate than Minnesota’s general sales tax.

How to Report and Pay Use Tax

If you owe use tax, you must file a use tax return by April 15 of the following year. You can file a use tax return two ways:

Electronically using our Individual Use Tax Return Online Filing System:
- Click Start a New Return at the bottom
- Follow the prompts to complete your return
On paper using Form UT1, Individual Use Tax Return

You must report some types of purchases separately on your return. These are explained in the sections below.

Aircraft

Sales of aircraft by dealers or individuals are taxable unless an exemption applies. See Aircraft.

Off-Road Vehicles and Watercraft

Purchases off-road vehicles (ATVs, snowmobiles, etc.) or watercraft from a dealer, are subject to state and local taxes, unless an exemption applies. If tax was not paid at the time of purchase or when the item was registered, you must report use tax.

If you purchase an off-road vehicle or watercraft from an individual (a person not engaged in a trade or business) it may be exempt as an isolated or occasional sale. See Isolated and Occasional Sales.

Alcoholic Beverages

Purchases of alcoholic beverages are subject to the liquor gross receipts tax in addition to the general rate and local sales tax. See Sales - Beverages.

You may also be required to file and pay Alcohol Beverage Use Tax.

Cannabis

Cannabis use tax is the counterpart of cannabis tax. The cannabis use tax rate is the same as the cannabis tax rate and the same exemptions generally apply.

You owe cannabis use tax when you receive taxable cannabis products in Minnesota, other than from a retailer that paid the tax. This may occur when:

While visiting another state, you purchase taxable cannabis products and carry them into Minnesota.
You purchase taxable cannabis products online, and the seller ships the product into Minnesota.
You purchase taxable cannabis products from a Minnesota seller and the cannabis tax was not paid.

Complete Form UT1 to report and pay the Cannabis Use Tax. You may also owe Minnesota Use Tax on these purchases if no general rate sales tax was charged.

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Cannabis Tax Rate Chart [+]

date	cannabis tax rate
On or after July 1, 2025	15%
July 1, 2023 to June 30, 2025	10%

Cannabis Tax Exemptions [+]

Cannabis use tax does not apply to items exempt in Minnesota, such as:

Medical cannabis flower and medical cannabinoid products purchased by or for a patient enrolled in the Minnesota registry program
Taxable cannabis products purchased on Tribally regulated land from a cannabis business licensed by a Minnesota Tribal government
Taxable cannabis products purchased outside of Minnesota that are carried into the state, if the total monthly purchases are $100 or less

Note: Off-reservation sales of taxable cannabis product by a Tribal enterprise are not exempt. These sales are subject to the Cannabis Tax in addition to state and local sales tax.

Cannabis Examples [+]

For the examples below, “shipped to” refers to the seller shipping the product to the customer’s location within Minnesota and “carried into” refers to the customer purchasing the product outside of Minnesota and physically bringing the product brought back into the state.

Example 1 – Carried into Minnesota, Cannabis Use Tax is Owed

You purchase $101 worth of taxable cannabis products from another state in April and carry the product back into Minnesota. You are not charged any tax on your purchase.

Minnesota Cannabis use tax is due on the entire $101 purchase price of the transaction because the product was both over $100 in a monthly period and no tax was paid to the other state.

Example 2 – Carried into Minnesota, Cannabis Use Tax is Owed

You purchase $101 worth of taxable cannabis products from another state in April and carry the product back into Minnesota. You are charged 6% Cannabis tax on your purchase.

Minnesota Cannabis use tax is due because the product was both over $100 in a monthly period and the Cannabis tax paid to the other state on the product was less than the Minnesota Cannabis use tax due on the product. You would only owe the difference between the Minnesota Cannabis Tax rate and the other states Cannabis tax rate charged.

Example 3 – Shipped into Minnesota, Cannabis Use Tax is Owed

You purchase $10 worth of taxable cannabis products from an online retailer and have the product shipped to your address in Minnesota. The retailer did not charge any Minnesota Cannabis Tax.

Minnesota Cannabis use tax is due because the product was shipped into Minnesota and the retailer did not charge Minnesota Cannabis Tax.

Example 4 – Purchased in Minnesota, Cannabis Use Tax is Owed

You purchase $10 worth of taxable cannabis products from a Minnesota retailer. No Minnesota Cannabis Tax was paid on the transaction.

Minnesota Cannabis use tax is due because the Minnesota Cannabis Tax was not paid.

Example 5 – Carried into Minnesota, Cannabis Use Tax is not Owed

You purchase $100 worth of taxable cannabis products from another state in April and carry the product back into Minnesota. You are not charged any tax on your purchase.

Minnesota Cannabis use tax is not due because the total monthly purchase was $100 or less, and the product was carried into Minnesota.

Example 6 – Carried into Minnesota, Cannabis Use Tax is not Owed

You purchase $101 worth of taxable cannabis products from another state in April and carry the product back into Minnesota. You are charged 25% Cannabis tax on your purchase.

Minnesota Cannabis use tax is not due because the Cannabis tax rate paid to the other state was more than the Minnesota Cannabis Tax rate.

Example 7 – Purchased in Minnesota, Cannabis Use Tax is not Owed

You purchase $10 worth of taxable cannabis products from a Minnesota retailer. You are charged 15% Cannabis tax on your purchase.

Minnesota Cannabis use tax is not due because the Cannabis tax was already paid.

Other Use Taxes

The following use taxes are not filed on Form UT1.