Minnesota's sales tax rate and what it covers

Minnesota charges a 6.875% sales tax on most retail purchases. This is the state rate that applies statewide. Some cities and counties add their own local sales tax on top of it, which means your total tax can range from 6.875% to as high as 8.375% depending on where you shop.

The tax applies to tangible goods — things you can touch and take home. Clothing, groceries, electronics, furniture, and gasoline all get taxed. Services like haircuts, car repairs, and plumbing do not. Food you eat at a restaurant is taxed, but groceries you buy at a store to cook at home are not.

When you see a price tag in a Minnesota store, that price does not include sales tax. The tax is added at checkout. If an item costs $100, you will pay $106.88 in state tax alone (or more if your city adds local tax).

Key Takeaways

  • Minnesota's state sales tax is 6.875%, but your actual rate depends on your city or county, which may add 0% to 1.5% more.
  • Sales tax applies to physical goods like clothing and electronics, but not to services like haircuts or car repairs.
  • Groceries and prescription medications are exempt from sales tax in Minnesota.
  • You can find your exact local rate by entering your address on the Minnesota Department of Revenue website or asking a retailer.
  • Sales tax is collected by the seller at the point of sale and sent to the state and local governments.

Local sales tax rates by city and county

Minnesota allows cities and counties to add their own sales tax on top of the state rate. Minneapolis adds 0.5%, so the total rate there is 7.375%. St. Paul also adds 0.5%. Some smaller cities add nothing, leaving the rate at 6.875%. A few areas add as much as 1.5%, bringing the total to 8.375%.

The local rate depends on where the sale happens, not where you live. If you buy something in Minneapolis, you pay Minneapolis's rate. If you drive to a neighboring city with a lower rate, you pay that rate instead. Online purchases are more complicated — see the section on online sales below.

To find your exact rate, enter your address on the Minnesota Department of Revenue's sales tax lookup tool at taxes.state.mn.us. You can also call your city or county assessor's office, or ask the cashier where you shop.

What is and is not taxed in Minnesota

Groceries are exempt. Milk, bread, vegetables, meat, and cereal are not taxed. But prepared foods — items from a deli counter, bakery items sold by the piece, or anything meant to be eaten right away — are taxed. A loaf of bread from the shelf is not taxed. A sandwich from the deli counter is.

Prescription medications are exempt. Over-the-counter drugs like aspirin and cold medicine are taxed. Clothing and shoes are not taxed in Minnesota, which is unusual — many states tax clothing. School supplies, books, and office supplies are taxed.

Services are not taxed. A haircut, dental work, car repair, plumbing, and house cleaning are all service transactions and do not have sales tax added. But if you buy a product as part of that service — like a haircut product the stylist sells you — that product is taxed.

How sales tax works for online and mail orders

Online retailers must collect Minnesota sales tax on orders shipped to Minnesota addresses, regardless of where the retailer is located. Amazon, Walmart, Target, and most major retailers do this automatically. The tax rate applied is based on the delivery address, not where you live or where the company is based.

If you order from a small seller who does not collect Minnesota sales tax, you are technically responsible for reporting and paying the tax yourself on your state income tax return. In practice, few people do this. The state focuses enforcement on large retailers.

Mail orders follow the same rule as online orders. If the seller ships to Minnesota, they should collect tax based on the delivery address.

Who collects and where the money goes

The retailer collects sales tax from you at the point of sale. They then send that money to the Minnesota Department of Revenue, which splits it between the state and the local city or county where the sale occurred. The state keeps most of it; the local portion goes to fund city and county services.

Retailers are required to register with the state and file sales tax returns, usually monthly or quarterly depending on their volume. If a retailer fails to collect or send in the tax, the state can pursue them for the unpaid amount plus penalties.

Special cases and exemptions

Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell them. A clothing store, for example, does not pay sales tax when it buys inventory from a wholesaler. It only collects tax when it sells to a customer.

Nonprofit organizations may be exempt from sales tax on certain purchases. They must register with the state and provide documentation of their nonprofit status.

Agricultural equipment and certain farm inputs have reduced or no tax in some cases. If you farm or operate a business that might may have access to, contact the Minnesota Department of Revenue directly.

Frequently Asked Questions

What is the sales tax rate where I live?

Minnesota's state rate is 6.875%, but your city or county may add more. Use the Minnesota Department of Revenue's lookup tool at taxes.state.mn.us, enter your address, and it will show your exact rate. Rates range from 6.875% to 8.375% depending on location.

Do I pay sales tax on groceries?

Most groceries are not taxed — milk, bread, vegetables, and meat are all exempt. Prepared foods and items from a deli counter are taxed. If you are unsure whether something counts as a grocery or a prepared food, ask the cashier before checkout.

Why do some online retailers not charge me sales tax?

Small sellers, especially those outside Minnesota, may not be set up to collect Minnesota tax. You are technically responsible for reporting this tax on your state return, but enforcement is rare for individual purchases. Large retailers like Amazon and Walmart do collect it.

Is clothing taxed in Minnesota?

No. Clothing and shoes are exempt from sales tax in Minnesota. This applies to regular clothing, not costumes or specialized gear like ski boots or athletic uniforms, which may be taxed depending on how they are classified.

Do I pay sales tax on services like haircuts or car repairs?

No. Services are not taxed in Minnesota. You pay no sales tax on a haircut, dental work, plumbing, or car repair. If the service includes a product you buy — like a haircut product — that product is taxed, but the labor is not.