Minnesota Sales Tax Guide 2025: Regulations, Rates, Compliance

This Minnesota sales tax guide offers a comprehensive look at the state’s tax laws, covering rates, exemptions, and filing processes. Rely on this guide to help your business stay compliant with Minnesota's tax regulations.

Minnesota Sales Tax

Minnesota introduced a state sales tax in 1967 to fund public services and programs. Under Minnesota sales tax regulations the Minnesota Department of Revenue oversees sales tax in Minnesota and enforces Minnesota sales and use tax rules to ensure compliance for businesses and remote sellers.

Minnesota Sales Tax Rate

Jurisdiction	Sales tax rate
State tax	6.875%
Local tax	0.0%-1.5%
Combined Tax	6.875%–8.37%

Learn more and check out the city-based tax rates in Minnesota.

Minnesota Sales Tax Calculator

A Minnesota sales tax calculator simplifies the process of determining the correct amount of sales tax to charge on taxable items. Retailers input the item’s price and the applicable tax rate to quickly calculate the total tax due. While clothing is generally tax-exempt in Minnesota, most other goods and services are subject to the state’s sales tax rate of 6.875%, with additional local taxes in certain areas.

Example: A retailer in Minneapolis sells a taxable electronic device for $200. To calculate the sales tax:

1. Determine the Sales Tax Rate: In Minneapolis, the total tax rate is 8.025% (state rate of 6.875% + local rate of 1.15%).
2. Multiply the Item Price by the Tax Rate: $200 × 0.08025 = $16.05 (sales tax).
3. Add the Sales Tax to the Item Price: $200 + $16.05 = $216.05.

The customer would pay $216.05, including $16.05 in sales tax.

Using a sales tax calculator ensures accuracy and compliance, helping retailers simplify tax collection and reporting. Tools like Kintsugi can further automate these calculations, saving time and reducing errors.

FAQs on Sales Tax

What is the tax rate in Minnesota?

The base sales tax rate in Minnesota is 6.875%, with additional local taxes in some areas that can raise the total rate.

What is the Minnesota state sales tax rate?

The Minnesota state sales tax rate is 6.875%, which applies statewide before any applicable local taxes.

How to calculate sales tax in Minnesota?

To calculate sales tax in Minnesota, multiply the item’s price by the combined state and local tax rate, then add the result to the original price.

Is sales tax calculated before or after discounts in Minnesota?

In Minnesota, sales tax is calculated on the price after discounts are applied, provided the discount is not reimbursed by the manufacture

Sales Tax Nexus in Minnesota​

Type of Nexus	Threshold
Physical presence	Any physical presence
Economic nexus	$100,000 in sales or 200 transactions
Marketplace nexus	$100,000 in sales or 200 transactions

FAQs on Sales Tax Nexus

What is the sales tax nexus in Minnesota?

Sales tax nexus in Minnesota is established through physical presence, such as a storefront or warehouse, or economic nexus for remote sellers.

What is the nexus threshold for sales tax in Minnesota?

The nexus threshold for sales tax in Minnesota is $100,000 in sales or 200 transactions annually.

Minnesota Sales Tax Exemptions​

Minnesota offers sales tax exemptions to certain businesses, organizations, and transactions to reduce costs and encourage economic growth. Common exemptions include clothing, prescription medications, and items purchased for resale.

Eligible entities, such as nonprofits, educational institutions, and government agencies, may also qualify for exemptions on specific goods or services. By understanding and utilizing these exemptions, businesses can minimize tax liabilities while complying with Minnesota’s tax laws.

FAQs on Sales Tax Exemptions

How to obtain a Minnesota sales tax exemption certificate?

To obtain a Minnesota sales tax exemption certificate, complete Form ST3 from the Minnesota Department of Revenue and provide it to vendors when making tax-exempt purchases.

What items or entities qualify for Minnesota sales tax exemption?

Items like clothing and prescription drugs, along with entities such as nonprofits, government agencies, and educational institutions, qualify for sales tax exemption in Minnesota under specific conditions. Learn more about Minnesota sales tax exemptions.

Is SaaS taxable in Minnesota?

Yes, SaaS (Software as a Service) is taxable in Minnesota as it is considered a sale of tangible personal property.

Is there sales tax on clothing in Minnesota?

No, most clothing items are exempt from sales tax in Minnesota, making it a tax-free category. Learn more about Minnesota clothing sales tax. 

How to apply for sales tax exemption in Minnesota?

Complete and submit Form ST3 to vendors when making qualifying tax-exempt purchases.

Is food exempt from sales tax in Minnesota?

Yes, most unprepared food items are exempt from sales tax in Minnesota.

What items are exempt from Minnesota sales tax?

Clothing, prescription medications, certain medical equipment, and items for resale are exempt from Minnesota sales tax.

Minnesota Sales Tax Filing

Filing sales tax in Minnesota involves reporting and remitting the tax collected on taxable sales to the Minnesota Department of Revenue. Businesses must first obtain a valid sales tax permit, collect the appropriate tax from customers, and maintain detailed sales records.

Filing is done through the state’s e-Services portal, with reporting schedules (monthly, quarterly, or annually) assigned based on a business’s sales volume. Accurate reporting of taxable and exempt sales ensures compliance with Minnesota tax laws and avoids penalties or interest charges.

What are the Minnesota sales filing requirements

Businesses in Minnesota must obtain a sales tax permit, collect sales tax on taxable transactions, and file accurate returns through the Minnesota Department of Revenue’s e-Services portal according to their assigned filing frequency.

How do I file sales tax in Minnesota?

To file sales tax in Minnesota, log in to the e-Services portal, report your taxable and exempt sales, calculate the total tax due, and submit the return along with payment by the deadline.

What is the deadline to file MN state taxes?

The deadline to file Minnesota sales tax depends on your assigned filing frequency.

Minnesota Sales Tax Due Date​

Filing Frequency	Due Date
Monthly	Every 20th day of the following month (Ex. Due date for January is February 20)
Quarterly	Every 20th of the month following the quarter’s end. (Ex. Due date for Q1 (January 1 – March 31) is April 20)
Annually	February 5 of the following year

What day is Minnesota sales tax due?

Minnesota sales tax is due on the 20th of the month following the reporting period.

What is the penalty for filing sales tax late in Minnesota?

The penalty for late filing is 5% of the unpaid tax, with additional interest accruing until the tax is paid.

Minnesota Sales Tax Revenue Service

For any concerns about Minnesota sales tax registration, filing or general inquiries, you can reach out to them through the following:

• Phone: 651-296-6181
• Phone: 800-657-3777
• Fax: 651-556-3102
• Email: salesuse.tax@state.mn.us
• Address: Minnesota Revenue 600 N. Robert St. St. Paul, MN 55146
• Business Hours: 8 a.m. - 4:30 p.m. Mon - Fri.
• Website: https://www.revenue.state.mn.us/

You’re now equipped with the essentials of Minnesota sales tax. Let Kintsugi make tax compliance easier—sign up or book a demo now.