Minnesota's Sales Tax Rate

Minnesota's statewide sales tax is 6.875 percent. This rate applies to most goods you buy at a store, but not all purchases are taxed the same way, and some cities and counties add their own local tax on top of the state rate.

The 6.875 percent breaks down into a 5.5 percent state tax plus a 1.375 percent local tax that goes to your city or county. When you see a price tag, the tax shown at checkout includes both layers. Some Minnesota cities have added extra local sales tax for specific purposes like transit or stadium funding, which can push your total rate higher.

Key Takeaways

  • Minnesota's base sales tax is 6.875 percent statewide, made up of 5.5 percent state tax and 1.375 percent local tax.
  • Groceries, prescription medications, and medical devices are not subject to sales tax in Minnesota.
  • Some cities and counties have added local sales taxes for specific projects, so your total rate may be higher than 6.875 percent depending on where you shop.
  • Restaurant meals, prepared foods, and alcohol are taxed at the full rate, unlike unprepared groceries.
  • Online purchases from out-of-state sellers may not include Minnesota tax at checkout, but you may owe it when you file your state return.

What Is and Isn't Taxed in Minnesota

Not everything you buy in Minnesota is subject to sales tax. Groceries—unprepared food you cook at home—are tax-free. This includes bread, milk, vegetables, meat, and frozen dinners you heat up yourself. However, prepared foods are taxed: restaurant meals, deli sandwiches, hot pizza, and food from a grocery store hot bar all include sales tax.

Prescription medications and medical devices like insulin pumps, hearing aids, and diabetic test strips are not taxed. Over-the-counter medications like cold medicine and pain relievers are also exempt. Clothing and shoes are tax-free in Minnesota, which is unusual—many states tax apparel.

Services are generally not taxed in Minnesota. Haircuts, car repairs, plumbing work, and dental visits do not have sales tax added. However, some services bundled with products—like installation of a new appliance—may be taxed depending on how the seller structures the charge.

Local Sales Tax Additions by City and County

On top of the 6.875 percent base rate, some Minnesota cities and counties have added their own local sales tax for specific purposes. These additions are typically 0.25 percent to 1 percent and fund projects like public transit, stadiums, or county services. Your exact rate depends on where the store is located, not where you live.

For example, Hennepin County (which includes Minneapolis) has a higher combined rate than some rural counties. The best way to find your exact local rate is to check with your city or county assessor's office, or look up the address where you are shopping on the Minnesota Department of Revenue website. When you buy something online and have it shipped to a Minnesota address, the tax is based on the delivery location's rate.

How Sales Tax Works on Online Purchases

If you order from an online retailer and have it shipped to Minnesota, you should see Minnesota sales tax added at checkout—but not always. Large retailers like Amazon and Walmart collect Minnesota tax on most orders. Smaller sellers or out-of-state companies may not, especially if they do not have a physical location in Minnesota.

When a seller does not collect tax at checkout, you are technically responsible for paying it yourself when you file your Minnesota state income tax return. In practice, few people report these purchases. The state has been working to require more online sellers to collect tax, so the rules continue to change. If you are unsure whether tax was included on an order, check your receipt or contact the seller.

Sales Tax on Specific Items

Some purchases have their own rules. Alcohol—beer, wine, and liquor—is taxed at the full sales tax rate, plus Minnesota also charges a separate excise tax on alcohol that varies by type. Gasoline is not subject to sales tax, but Minnesota charges a separate fuel tax per gallon instead. Cigarettes and tobacco are taxed at the full rate plus an additional state tobacco tax.

Motor vehicles are subject to sales tax, but the rate and rules are different from regular purchases. You pay tax based on the vehicle's value, and the tax is collected when you register the vehicle with the state, not at the dealership. Rental cars are taxed at the full rate for each day of the rental.

Digital products like e-books, music downloads, and software are taxed in Minnesota. Streaming services like Netflix and Spotify are also subject to sales tax. Physical books and newspapers are not taxed.

Understanding Your Receipt and Tax Calculation

When you check out at a store, the sales tax is calculated on the subtotal before any discounts are applied. If you have a coupon, the store subtracts it first, then calculates tax on the lower amount. Some stores show the tax separately on your receipt; others include it in the total price.

To calculate what you will pay, multiply the subtotal by your local sales tax rate. For example, if you buy $50 worth of items in a city with a 7.375 percent rate, the tax is $3.69, and your total is $53.69. Tax is always rounded to the nearest cent. If you are buying multiple items with different tax treatments—like groceries plus a magazine—the store's register handles this automatically, taxing only the items that are subject to tax.

Frequently Asked Questions

Is clothing taxed in Minnesota?

No. Clothing and shoes are exempt from sales tax in Minnesota. This applies to regular apparel like shirts, pants, and jackets. Accessories like hats, belts, and scarves are also tax-free. However, items like sports equipment or protective gear may be taxed depending on how they are classified.

Do I pay sales tax on groceries?

Unprepared groceries are not taxed. Bread, milk, vegetables, meat, and frozen dinners you cook at home are tax-free. Prepared foods—restaurant meals, deli sandwiches, hot pizza, and items from a grocery store hot bar—are taxed at the full rate.

What is the sales tax rate in Minneapolis?

Minneapolis is in Hennepin County, which has a combined state and local sales tax rate of 8.375 percent. This includes the 6.875 percent base rate plus Hennepin County's additional local tax. Some specific neighborhoods or districts may have different rates for certain purchases.

Do I owe Minnesota sales tax on online purchases from out-of-state sellers?

If the seller does not collect Minnesota tax at checkout, you are technically responsible for reporting and paying it on your state income tax return. However, enforcement is limited. Large retailers now collect tax on most orders shipped to Minnesota. If you are unsure, check your receipt or contact the seller.

Are prescription medications taxed in Minnesota?

No. Prescription medications are exempt from sales tax. Over-the-counter medications like cold medicine and pain relievers are also tax-free. Medical devices like hearing aids and diabetic test strips are not taxed either.