Minnesota has a sales tax of 6.875 percent on most purchases

Minnesota charges 6.875 percent sales tax on the majority of goods and services you buy in the state. This is the statewide base rate. Some cities and counties add their own local sales tax on top of that, so your total rate can range from 6.875 percent to as high as 8.35 percent depending on where you shop.

The tax is collected by the seller at the point of sale and sent to the Minnesota Department of Revenue. You see it added to your receipt when you check out. The rate has been 6.875 percent since 2008, though local additions have changed over time.

Key Takeaways

  • Minnesota's statewide sales tax rate is 6.875 percent, but local taxes can push your total rate higher depending on your city or county.
  • Groceries, prescription medications, and medical devices are exempt from sales tax in Minnesota.
  • Clothing and shoes under $100 per item are tax-free, but items over that threshold are taxed.
  • Services like haircuts, repairs, and labor are generally not taxed, though some specific services have their own rules.
  • Online purchases from out-of-state sellers may or may not be taxed depending on whether the seller has a physical presence in Minnesota.

What's exempt from Minnesota sales tax

Several categories of items are not subject to sales tax in Minnesota. Groceries — food you cook at home — are completely tax-free. This includes meat, produce, dairy, bread, and canned goods. Restaurant meals and prepared foods are taxed, but raw ingredients are not.

Prescription medications and medical devices prescribed by a doctor are exempt. This covers insulin, inhalers, hearing aids, and similar items. Over-the-counter medications like aspirin or cold medicine are taxed.

Clothing and shoes under $100 per item are tax-free in Minnesota. A pair of shoes that costs $89 is not taxed. A coat that costs $105 is taxed on the full amount. This threshold applies to each individual item, not your total purchase.

Local sales tax rates vary by city and county

On top of the 6.875 percent state rate, many Minnesota cities and counties add their own local sales tax. Hennepin County (which includes Minneapolis) adds 0.5 percent, bringing the total to 7.375 percent. Ramsey County (which includes St. Paul) also adds 0.5 percent. Some counties add nothing; others add up to 1.5 percent.

Your exact rate depends on where the sale physically happens. If you buy something in downtown Minneapolis, you pay Minneapolis's rate. If you buy the same item in a suburb, you pay that suburb's rate. Online purchases are typically taxed based on where the seller is located or, increasingly, where you live.

You can find your local rate by entering your address on the Minnesota Department of Revenue website or by asking the cashier. Rates do not change frequently, but they can shift if a city or county passes new legislation.

Services and labor are generally not taxed

Most services in Minnesota are not subject to sales tax. Haircuts, plumbing repairs, car repairs, dental work, and legal information are not taxed. You pay the service provider's fee, and no sales tax is added.

The rule is that you are taxed on tangible personal property — physical goods you can touch — but not on labor or services. However, there are exceptions. If a plumber replaces a pipe, the labor is not taxed, but if they sell you a new faucet as part of the job, the faucet itself is taxed. If a tailor alters your pants, the alteration is not taxed, but if they sell you new fabric, the fabric is taxed.

How sales tax works on online and out-of-state purchases

If you order something online from a company with a physical location in Minnesota — a warehouse, store, or office — Minnesota sales tax applies. If you order from a company with no physical presence in Minnesota, the seller may not charge you Minnesota tax, though this depends on the seller's policies and the current law.

Many large online retailers now charge sales tax in all states where they have customers, even without a physical location. Smaller sellers may not. The safest assumption is that if the seller is based in Minnesota or has a Minnesota warehouse, you will be charged Minnesota sales tax.

If you buy something in another state and bring it home to Minnesota, you do not owe sales tax on it. Minnesota does not tax purchases made outside the state.

What happens if sales tax is not charged

If you buy something that should have been taxed but the seller did not charge you tax, you are not responsible for paying it yourself. The obligation to collect and remit sales tax falls on the seller, not the buyer. If a seller fails to charge tax, that is between the seller and the Minnesota Department of Revenue.

If you are a business owner and you buy items for resale, you can provide a resale certificate to avoid paying sales tax on your purchases. You then collect tax from your customers when you sell those items. This prevents double taxation.

Special rules for specific items

Some items have their own rules. Motor vehicles are taxed, but the tax is collected when you register the vehicle with the state, not at the dealership. Gasoline is taxed, but the tax is included in the pump price you see. Alcohol and tobacco are taxed at the sales tax rate plus additional excise taxes.

Newspapers and magazines are not taxed. Textbooks sold by schools are not taxed. Seeds and plants used for growing food are not taxed, but ornamental plants and flowers are taxed.

Frequently Asked Questions

Do I pay sales tax on groceries in Minnesota?

No. Groceries — food you buy to cook at home — are completely exempt from sales tax in Minnesota. This includes meat, produce, dairy, bread, frozen vegetables, and canned goods. Restaurant meals and prepared foods are taxed, but raw ingredients are not.

What is the total sales tax rate in Minneapolis?

The total sales tax rate in Minneapolis is 7.375 percent: 6.875 percent state tax plus 0.5 percent local tax from Hennepin County. Rates vary by neighborhood and nearby suburbs, so check your specific address if you are near a city boundary.

Are clothes and shoes always tax-free in Minnesota?

Clothing and shoes under $100 per item are tax-free. Items over $100 are taxed on the full price. A $99 shirt is not taxed; a $101 shirt is taxed. This applies to each individual item, not your total purchase.

Do I owe Minnesota sales tax on something I bought online from out of state?

It depends on the seller. If the seller has a physical presence in Minnesota, they should charge you Minnesota tax. If they do not, they may still charge you tax anyway — many large retailers do. If tax was not charged and should have been, the responsibility is the seller's, not yours.

Is labor taxed in Minnesota?

No. Services and labor are generally not taxed in Minnesota. A haircut, car repair, or plumbing job is not taxed. However, if the service provider also sells you a physical item as part of the job — like a new faucet or replacement part — that item is taxed.