- Statewide: 6.875%
- Counties can levy an additional sales tax of no more than 2.0%.
- Current average sales tax (with local taxes included): 7.297%
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt
- Clothing: Exempt
- Prepared foods: 11%
- Gasoline Tax: 49.00 cents/gallon (Includes all state, local and federal taxes)
- Diesel Fuel Tax: 55.00 cents/gallon (Includes all state, local and federal taxes)
- Cigarette Tax: $3.04/pack of 20
Personal Income Tax
Income tax comments: *Taxpayers 65 and over may exempt up to $9,600 if income is less than $33,700. Credit of $750 for past military service available if meet certain requirements.
- Personal Income Tax Rate Range: Four brackets from 5.35% to 9.85% (on income greater than $166,040)
- Standard deduction: Single Filing Status: $12,525. Married Filing Jointly: $25,050
- Personal Exemption Allowance: Dependents: $4,350
- Itemized Deductions Allowed?: Yes, subject to limitations
- Retirement Income
- Social Security: Can deduct $4,090 ($5,200 filing jointly) of federally taxable Social Security income, subject to phase-out.
- IRAs: Taxable at ordinary income tax rates*
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates*
- Private pensions: Taxable at ordinary income tax rates*
- Public Pensions: Portion may be exempt based on income*
- Military Pay
- Active Duty Pay: Exempt
- Military Retirement Pay: Exempt
- Military Disability Pay: Exempt
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SBP/SSBP/RCSBP/RSFPP: Exempt
- Local municipalities average 1.12% of the property's assessed value.
- Calculation of assessed value: 100% of fair market value
- Relief programs for:
- Regular Property Tax Refund: Tax credit up to $2,840 if meet income requirements.
- Renters: Tax credit up to $2,210 if meet income requirements.
- Special Property Tax Refund: Tax credit up to $1,000 if meet property tax amount requirements.
- Disabled/65 and over/Have Dependents: Additional tax credit may be available.
- 65 and over: If income less than $60,000, tax over 3% of income can be deferred.
- Disabled Veterans/Surviving Spouse/Primary Caregiver: Up to $300,000 of assessed value may be exempt if over 70% service-connected disability.
- Disabled: Up to $50,000 of assessed value may be reduced.
- Personal Property Tax: Yes. Rates and exemptions vary.
- Deferral programs are available.
Inheritance & Estate Taxes: Estates over $3 million are taxed at a rate between 13% and 16%. Some businesses and farms may qualify for a $5 million exemption. There is no inheritance tax.
Department of Revenue website: www.revenue.state.mn.us