Minnesota

Sales Tax

  • Statewide: 6.875%
  • Counties can levy an additional sales tax of no more than 2.0%.
  • Current average sales tax (with local taxes included): 7.45%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt
    • Clothing: Exempt
    • Prepared foods: 11%
  • Vehicle Tax: 6.5%
  • 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)

 

Personal Income Tax

  • Personal Income Tax Rate Range: Four brackets from 5.35% to 9.85% (on income greater than $183,340, or $304,970 for married filers)
  • Standard deduction: Single Filing Status: $13,825. Dependents: $1,200. 65 and over, or Blind: Additional $1,850 ($1,450 for married filing jointly). Subject to phase-out.
  • Personal Exemption Allowance: Dependents: $4,800, subject to phase-out
  • Itemized Deductions Allowed?: Yes, subject to limitations
  • Retirement Income
    • Social Security: Federally taxable Social Security income exempt if income less than $78,00 (single filers) or $100,000 (joint filers). 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
Income tax comments: *Taxpayers 65 and over may exempt up to $9,600 if income is less than $33,700 ($42,000 if married filing jointly). Credit of $750 for past military service available if meet certain requirements.

 

Property Tax

  • Local municipalities average 1.11% 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 $4,350 if income less than $128,280. 
    • Renters: Tax credit up to $2,440 if income less than $69,520.
    • Special Property Tax Refund: Tax credit up to $1,000 if meet property tax amount requirements.
    • 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 100% service-connected disability; $150,000 if at least 70% service-connected disability.
    • Disabled: Up to $50,000 of assessed value may be reduced.
    • Disabled/65 and Over/Have Dependents: Additional tax credit may be available.
  • 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

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