Minnesota's sales tax rate and what it covers
Minnesota charges a 6.875% state sales tax on most retail purchases. This is the baseline rate that applies statewide. However, many cities and counties add their own local sales tax on top of the state rate, so your total tax can range from 6.875% to over 8% depending on where you shop. The combined rate is what you see on your receipt.
Not everything you buy is taxed at the same rate. Groceries — food you take home to cook — are taxed at a lower rate of 0.5% in Minnesota, a significant break compared to other items. Prepared food, restaurant meals, and food you eat on premises are taxed at the full rate. Clothing and shoes are also exempt from sales tax in Minnesota, which is unusual; many states tax apparel.
Services are generally not subject to sales tax in Minnesota, though there are exceptions. A haircut, car repair, or plumbing service is not taxed. However, certain services tied to tangible goods — like installation, delivery, or repair of taxable items — may be taxable depending on the circumstances.
Key Takeaways
- Minnesota's state sales tax is 6.875%, but your actual rate depends on local additions that vary by city and county.
- Groceries are taxed at only 0.5%, while clothing and shoes are not taxed at all.
- Prepared food and restaurant meals are taxed at the full rate, unlike groceries.
- Online purchases from out-of-state sellers are subject to Minnesota sales tax if the seller has a physical presence or meets economic thresholds in the state.
Local sales tax additions by city and county
While the state rate is uniform, cities and counties can impose additional sales tax. These local rates typically range from 0.25% to 1.5% on top of the state rate. For example, Hennepin County (which includes Minneapolis) adds 0.5% to the state rate, bringing the total to 7.375%. Ramsey County (which includes St. Paul) also adds 0.5%. Some smaller cities or counties may add less, while a few add more.
The local rate depends on where the sale physically occurs — the location of the store, not where you live. If you shop in one city and live in another, you pay the tax rate of the city where you made the purchase. This is why the same item might cost different amounts in tax depending on which store you visit.
You can find your specific combined rate by entering your address on the Minnesota Department of Revenue website or by asking a retailer in your area. The rate can change if local jurisdictions vote to adjust their portion.
What triggers sales tax and what does not
The rule in Minnesota is straightforward: if you buy a tangible personal property — something physical you can touch and own — it is generally subject to sales tax. This includes clothing (except in Minnesota, where it is exempt), electronics, furniture, books, toys, and household goods. The tax applies whether you buy in a store, online, or by phone.
Certain items are always exempt. Beyond groceries and clothing, these include prescription medications, medical devices, and items sold for resale (if you are a business buying inventory). Newspapers and magazines are also exempt. Utilities like electricity and natural gas are not subject to sales tax.
Digital products — software, e-books, streaming subscriptions, and downloaded music — are generally not taxed in Minnesota, though this area of tax law continues to evolve. If you are unsure whether a specific purchase is taxable, the Minnesota Department of Revenue publishes detailed guidance on their website.
How online and out-of-state purchases are taxed
If you order something online from a company with no physical location in Minnesota, Minnesota sales tax still applies if the seller meets certain thresholds. As of 2024, sellers with more than $100,000 in Minnesota sales in the previous calendar year, or more than 200 transactions in Minnesota, must collect and remit Minnesota sales tax. This rule applies regardless of where the company is based.
Many large retailers — Amazon, Walmart, Target, and others — already collect Minnesota sales tax on orders shipped to Minnesota addresses because they meet these thresholds. Smaller sellers may not, in which case Minnesota residents are technically responsible for reporting the tax themselves on their state tax return, though this is rarely enforced for individual purchases.
If you buy something in another state and bring it back to Minnesota, you do not owe sales tax on it. However, if you order it online and have it shipped to a Minnesota address, Minnesota tax applies based on the seller's obligations described above.
Tax-exempt purchases and who qualifies
Certain organizations and individuals can make purchases without paying sales tax. Nonprofits, schools, hospitals, and government agencies can obtain a tax-exempt certificate from the Minnesota Department of Revenue and use it to buy items tax-free. The organization must be registered and the purchase must be for the organization's use, not for resale or personal use by an individual.
Individuals cannot claim a blanket exemption from sales tax. However, if you are buying something that is inherently exempt — like groceries or prescription medications — you do not pay tax on that item regardless of who you are. Some states offer exemptions for seniors or people with disabilities, but Minnesota does not have a general sales tax exemption based on personal status.
If you are a business buying inventory for resale, you can provide a resale certificate to avoid paying sales tax on your wholesale purchases. You then collect sales tax from your customers when you sell the items.
How sales tax appears on your receipt and bill
When you check out at a store, the sales tax is calculated on the subtotal of your purchase and added as a separate line item on your receipt. The tax is based on the location of the store, not your home address. If you buy multiple items, some taxable and some not (like groceries mixed with household supplies), the tax applies only to the taxable items.
Online retailers typically show the tax calculation before you complete your purchase, so you know the total cost including tax. Some retailers display the tax-inclusive price, while others show it separately — this varies by company policy and how their system is set up.
If you believe you were charged the wrong amount of sales tax, you can contact the retailer with your receipt. Errors do happen, particularly with online orders or when a store is near a county or city boundary. The Minnesota Department of Revenue also handles complaints about incorrect tax collection.
Frequently Asked Questions
Is Minnesota sales tax the same everywhere in the state?
No. The state rate is 6.875%, but cities and counties add local tax on top of that. Your total rate depends on where you shop. You can find your exact combined rate by entering your address on the Minnesota Department of Revenue website or asking a local retailer.
Why are groceries taxed differently than other items?
Minnesota taxes groceries at 0.5% instead of the full rate because groceries are considered essential. This lower rate reduces the tax burden on food purchases. Prepared food and restaurant meals are still taxed at the full rate because they are considered a service, not a grocery item.
Do I have to pay Minnesota sales tax on clothes?
No. Clothing and shoes are exempt from Minnesota sales tax. This includes items like shirts, pants, jackets, hats, and footwear. The exemption applies whether you buy in a store or online, as long as the seller is required to collect Minnesota tax.
What happens if an online seller does not collect Minnesota sales tax?
If a seller does not meet Minnesota's economic thresholds ($100,000 in sales or 200 transactions in the previous year), they are not required to collect tax. You are technically responsible for reporting and paying the tax yourself on your Minnesota tax return, though this is rarely enforced for individual purchases.
Are services like haircuts or car repairs subject to sales tax?
No. Most services in Minnesota are not subject to sales tax. This includes haircuts, car repairs, plumbing, and similar work. However, if the service includes a tangible product — like parts used in a repair — the tax may explore to the product portion depending on how the bill is structured.