Minnesota's Sales Tax Rate and What It Covers

Minnesota charges a 6.875% sales tax on most goods you buy in the state. This rate is fixed statewide — it does not vary by county or city, though some cities add a local sales tax on top of it. The tax applies at the point of sale: when you buy something in a store, online from a Minnesota seller, or from a vending machine, the tax is added to your total.

Not everything you purchase is taxed. Groceries — food you take home to cook — are exempt. Prescription medications are exempt. Clothing and shoes under $100 per item are exempt. Medical devices prescribed by a doctor are exempt. Understanding what is and is not taxed matters because it changes what you actually pay.

Key Takeaways

  • Minnesota's statewide sales tax is 6.875%, and it applies to most goods but not groceries, prescription drugs, or clothing under $100 per item.
  • Some cities and counties add their own local sales tax on top of the state rate, so your total tax can be higher than 6.875%.
  • Online purchases from Minnesota sellers are taxed the same way as in-store purchases, but purchases from out-of-state sellers may not be taxed.
  • Services — haircuts, car repairs, plumbing — are generally not taxed in Minnesota, though some specific services have their own rules.

Local Sales Tax on Top of the State Rate

While the state rate is 6.875%, many Minnesota cities and counties add their own local sales tax. This means your actual tax rate depends on where you are shopping. For example, Minneapolis adds a 0.5% local tax, bringing the total to 7.375%. St. Paul adds 0.5%, and some other cities add different amounts.

The local tax is collected by the same retailer at the same time as the state tax — you do not pay it separately. When you check out, the register shows your total tax rate for that location. If you shop in different cities, you may notice the tax changes slightly from one place to another.

What Is Taxed and What Is Not

The clearest exemptions are groceries and prescription medications. If you buy milk, bread, vegetables, or meat at a grocery store, no sales tax is charged. If a pharmacist fills a prescription for you, no tax is charged. Over-the-counter medications like aspirin or cold medicine are taxed, because they are not prescribed.

Clothing and footwear under $100 per item are exempt. A $75 shirt is not taxed. A $120 coat is taxed on the full amount, because it exceeds the threshold. The exemption applies per item, not per purchase — if you buy five $20 shirts, none are taxed, but if you buy one $150 jacket, the entire $150 is taxed.

Services are generally not taxed. A haircut, a car repair, plumbing work, or dental cleaning are not subject to sales tax. However, some services that include a product — like a restaurant meal or a car wash — are taxed because you are buying something tangible along with the service.

Sales Tax on Online Purchases

If you buy something online from a Minnesota-based seller, sales tax is charged just as it would be in a physical store. The seller collects the tax and sends it to the state. If you buy from an out-of-state seller with no physical presence in Minnesota, the seller may not charge Minnesota sales tax — though this depends on the seller's size and structure.

Large online retailers like Amazon now collect sales tax in Minnesota on most items, even though they do not have a store here. Smaller sellers may not. The rule changed in recent years to require more online sellers to collect tax, but the specifics depend on the seller's revenue and whether they have a warehouse or other presence in the state.

Restaurant Meals and Prepared Food

Food you buy ready to eat — at a restaurant, a deli counter, or a food truck — is taxed. A sandwich from a deli counter is taxed. A rotisserie chicken from a grocery store is taxed. A coffee and pastry from a café is taxed. The tax applies because you are buying prepared food, not raw ingredients.

The line between taxed and untaxed can be confusing. A loaf of bread from the bakery section is not taxed. A slice of bread from the deli with toppings already on it is taxed. If you are unsure, ask the cashier — they know the rule for their store.

Who Collects and Where the Money Goes

The retailer collects the sales tax from you at the register and sends it to the Minnesota Department of Revenue. Businesses file sales tax returns monthly or quarterly, depending on their size. The state uses this money to fund schools, roads, and other public services.

As a shopper, you do not file anything related to sales tax — the retailer handles it all. Your only responsibility is to understand what you are paying for when you check out.

Frequently Asked Questions

Do I pay sales tax on used items?

No. Used goods sold by individuals or secondhand stores are not subject to sales tax in Minnesota. If you buy a used car from a private seller, a used book from a thrift store, or used furniture from a consignment shop, no sales tax is charged. However, used items sold by a business as part of their regular inventory may be taxed depending on the type of business.

Is there sales tax on clothing over $100?

Yes. The $100 exemption applies per item. If you buy a $150 coat, the entire $150 is taxed. If you buy a $99 pair of shoes and a $99 pair of pants, neither is taxed. Once a single item exceeds $100, the full price is subject to tax.

What about sales tax on services like haircuts or car repairs?

Services are not taxed in Minnesota. A haircut, a plumbing repair, a dental cleaning, or an oil change are not subject to sales tax. However, if the service includes a product — like a haircut plus a $20 bottle of shampoo — the shampoo is taxed but the haircut is not.

Do I owe sales tax if I buy something online from out of state?

Not at the point of sale, unless the seller collects it. However, Minnesota law technically requires residents to pay a "use tax" on out-of-state purchases if no sales tax was charged. In practice, this is rarely enforced for individual shoppers, and most people do not pay it. Large purchases or business transactions may be different.

Can I get a sales tax refund if I move out of Minnesota?

No. Sales tax is final when you pay it. If you buy something in Minnesota and then move, you do not get a refund. The tax is based on where you made the purchase, not where you live afterward.