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2024 Guide to Sales Tax in Minneapolis, Minnesota

Minnesota Sales Tax Rate
6.875%
Hennepin County Sales Tax Rate
0.15%
Special Sales Tax Rate
Variable (up to 1.5%)
Minneapolis Sales Tax Rate
Variable (up to 0.5%)

If you're operating a business in Minneapolis, Minnesota, it's essential to understand the local sales tax regulations to ensure compliance and smooth operation. This guide provides a comprehensive overview of the sales tax in Minneapolis, Minnesota.

We will discuss the various sales tax rates at the state, county, and city levels, how to calculate sales tax in Minneapolis, and the requirements for businesses to collect sales tax. Additionally, we provide sales tax rates for the top 10 most populated ZIP codes in Minneapolis and tips to ensure compliance with sales tax regulations.

What is the Sales Tax in Minneapolis?

The total sales tax rate in Minneapolis consists of the Minnesota state tax rate and any additional county tax rates where applicable.

Breakdown of Sales Tax in Minneapolis

  • State Sales Tax: 6.875%
  • County Sales Tax: 0.150%
  • City Sales Tax: Variable (up to 0.500%)
  • Special Sales Tax: Variable (up to 1.500%)

What is Hennepin County Sales Tax?

In Minneapolis, part of Hennepin County, the county sales tax adds an additional 0.150% to the state sales tax.

Tax Rates in Minneapolis, Minnesota

Here are the sales tax rates for the top 10 most populated ZIP codes in Minneapolis:

ZIP Code State Sales Tax County Sales Tax City Sales Tax Special Sales Tax
55406 6.875% 0.150% 0.500% 1.500%
55407 6.875% 0.150% 0.500% 1.500%
55408 6.875% 0.150% 0.500% 1.500%
55411 6.875% 0.150% 0.000% 1.500%
55414 6.875% 0.000% 0.000% 1.000%
55416 6.875% 0.150% 0.000% 1.500%
55418 6.875% 0.000% 0.000% 1.000%
55423 6.875% 0.150% 0.000% 1.500%
55428 6.875% 0.150% 0.000% 1.500%
55443 6.875% 0.150% 0.000% 1.500%

Other Tax Rates for Minneapolis

Here are some other applicable tax rates for businesses in Minneapolis:

Type of Sales Tax Rate
Non-Nexus Sellers – State Use Tax 6.875%
Non-Nexus Sellers – County Use Tax 0.150%
Non-Nexus Sellers – City Use Tax Variable
Non-Nexus Sellers – Special Use Tax 1.500%
Out-of-State Sellers – State Use Tax 6.875%
Out-of-State Sellers – County Use Tax 0.150%
Out-of-State Sellers – City Use Tax Variable
Out-of-State Sellers – Special Use Tax 1.500%
Marketplace Facilitators – State Sales Tax 6.875%
Marketplace Facilitators – County Sales Tax 0.150%
Marketplace Facilitators – City Sales Tax Variable
Marketplace Facilitators – Special Sales Tax 1.500%

What Items are Taxable in Minneapolis?

In Minnesota, certain items are taxable while others are exempt. Common taxable items include:

Item Description TIC Number
Apparel Clothing and footwear 10020
Electronics Computers and accessories 20020
Furniture Home furnishings 30020

What Items are Exempt from Taxes in Minneapolis?

Some items are exempt from sales tax in Minnesota, typically for essential goods or to encourage certain purchases:

Item Description TIC Number
Prescription Drugs Medications 40020
Groceries Unprepared food items 50020
Medical Equipment Durable medical equipment 60020

Who Needs to Collect Sales Tax in Minneapolis?

Businesses need to collect sales tax in Minneapolis if they have either physical or economic nexus in Minnesota.

Physical Nexus

You have a physical presence in Minnesota if you:

  • Own or lease property in Minnesota
  • Have employees in Minnesota
  • Maintain inventory in Minnesota

Economic Nexus

You have economic nexus if your sales into Minnesota exceed $100,000 or 200 transactions in the current or previous calendar year.

How to Get a Sales Tax Permit?

If you meet the nexus requirements, you must register for a sales tax permit in Minnesota. Here’s how:

  1. Visit the Minnesota Department of Revenue’s website.
  2. Complete the application for a sales tax permit.
  3. Submit the application and await approval.

How Do You Charge the Right Amount for Sales Tax?

Ensuring you charge the correct sales tax in Minneapolis involves:

  • Manually checking and updating rates: Regularly check the Minnesota Department of Revenue’s website for updates.
  • Using sales tax software: Implement software like TaxCloud to automate rate updates and compliance.

How Do You File and Remit Sales Tax?

Sales tax returns are filed with the Minnesota Department of Revenue. Here’s how:

  1. Collect sales tax from customers.
  2. File your sales tax return online.
  3. Remit the collected taxes to the state.

Conclusion

Understanding and complying with sales tax regulations in Minneapolis is essential for any business operating in Minnesota. Use this guide to navigate the complexities of sales tax and ensure your business remains compliant.

Sales Tax Guides by State

Our sales tax guides provide an overview of sales tax rates, nexus thresholds, taxable and nontaxable items, along with other valuable tax knowledge for every U.S. state.