Minnesota's statewide sales tax is 6.875 percent
Minnesota charges a statewide sales tax of 6.875 percent on most goods and services. This is the base rate that applies everywhere in the state. However, many cities and counties add their own local sales tax on top of the state rate, so your actual tax at checkout depends on where you are shopping.
The combined rate you pay can range from 6.875 percent in areas with no local tax to over 8 percent in cities that have added local options. For example, Minneapolis has a combined rate of 8.375 percent because the city adds a 1.5 percent local tax. St. Paul's combined rate is 8.125 percent. If you shop in a smaller town with no local addition, you pay only the state rate of 6.875 percent.
Key Takeaways
- Minnesota's base sales tax rate is 6.875 percent, but your actual rate depends on the city or county where you make the purchase.
- Local sales taxes in Minnesota cities range from zero to 1.5 percent, added on top of the state rate.
- Groceries, prescription medications, and medical devices are exempt from Minnesota sales tax.
- Services like haircuts, repairs, and labor are generally not taxed in Minnesota, though some specific services have exceptions.
How local taxes add to the state rate
Cities and counties in Minnesota can choose to add a local sales tax, but they cannot exceed 1.5 percent. Not all cities use this option. Some smaller towns and rural areas have no local tax, meaning residents pay only the 6.875 percent state rate. Larger cities like Minneapolis, St. Paul, and Duluth have all adopted local taxes to fund specific projects or services.
When you shop, the cashier or online checkout system automatically applies the combined rate for your location. You do not need to calculate it yourself. If you want to know the exact rate in a specific city, you can check the Minnesota Department of Revenue website, which lists all local tax rates by municipality.
What is exempt from sales tax in Minnesota
Not everything you buy is taxed. Groceries and food for home consumption are exempt from Minnesota sales tax. This includes bread, milk, vegetables, meat, and other items you cook at home. However, prepared food, restaurant meals, and food eaten on premises are taxed.
Prescription medications and certain medical devices are also exempt. This includes insulin, inhalers, and devices prescribed by a doctor. Over-the-counter medications like cold medicine or pain relievers are taxed, but prescription drugs are not.
Clothing and shoes are generally exempt from Minnesota sales tax, which is unusual compared to many other states. This exemption applies to most apparel, though some items like hats, gloves, and footwear have specific rules depending on their primary use.
Services that are not taxed
Most services in Minnesota are not subject to sales tax. This means you do not pay sales tax on haircuts, car repairs, plumbing work, or labor charges. If you hire a contractor to fix your roof or an electrician to rewire a room, the labor is not taxed. However, if the contractor sells you materials as part of the job, those materials are taxed.
For example, if a plumber replaces your water heater, you pay sales tax on the water heater itself but not on the labor to install it. The invoice should show these separately so you can see what is taxed and what is not.
Sales tax on online and out-of-state purchases
If you order something online from a Minnesota seller, you pay Minnesota sales tax based on the delivery address. If you order from an out-of-state seller, the tax depends on whether that seller has a physical presence or significant sales activity in Minnesota. Many large online retailers now collect Minnesota sales tax on all orders shipped to Minnesota addresses, even if the company is based elsewhere.
If you buy something in person while traveling outside Minnesota and bring it home, you do not owe Minnesota sales tax on that purchase. However, if you order something from out of state and have it shipped to your Minnesota address, the seller may be required to collect Minnesota tax at checkout.
How to find the exact rate for your city
The Minnesota Department of Revenue publishes a complete list of all local sales tax rates by city and county. You can search by municipality name or zip code to find the combined rate for your area. This is the most reliable way to know the exact percentage you will pay.
If you are shopping in a city you do not know well, you can also ask the cashier what the local rate is. Retailers are familiar with their own city's tax rate and can tell you when ready. For online shopping, the checkout page should show the tax rate being applied to your order before you complete the purchase.
Frequently Asked Questions
Do I pay sales tax on groceries in Minnesota?
No. Food for home consumption, including groceries like bread, milk, vegetables, and meat, is exempt from Minnesota sales tax. However, prepared foods, restaurant meals, and food you eat on premises are taxed.
What is the sales tax rate in Minneapolis?
Minneapolis has a combined sales tax rate of 8.375 percent. This is the state rate of 6.875 percent plus a local city tax of 1.5 percent. The rate applies to all taxable purchases made within Minneapolis city limits.
Is clothing taxed in Minnesota?
Most clothing and shoes are exempt from Minnesota sales tax, which is one of the few states with this exemption. However, some items like hats, gloves, and specialized footwear may have different rules depending on their primary use.
Do I pay sales tax on services like haircuts or car repairs?
No. Labor and services are generally not taxed in Minnesota. You do not pay sales tax on haircuts, repairs, plumbing work, or contractor labor. However, any materials sold as part of the service are taxed separately.
What if I buy something online from an out-of-state seller?
Many large online retailers collect Minnesota sales tax on orders shipped to Minnesota addresses. Whether tax is charged depends on the seller's sales activity in Minnesota. The checkout page should show the tax rate before you complete your purchase.