Minnesota's statewide sales tax rate is 6.875 percent

Minnesota charges a 6.875 percent sales tax on most retail purchases. This is the base rate that applies across the entire state. However, many cities and counties add their own local sales tax on top of the state rate, so the total tax you pay at checkout depends on where you are shopping.

The combined rate — state plus local — ranges from 6.875 percent in areas with no local tax to as high as 8.85 percent in some cities. You will see the full combined rate on your receipt, but understanding which part is state and which part is local matters if you are comparing prices across different parts of Minnesota or need to know what portion goes to your city versus the state.

Key Takeaways

  • Minnesota's state sales tax is 6.875 percent, but your total tax rate includes any local city or county tax added on top.
  • Groceries, prescription medications, and medical devices are exempt from sales tax in Minnesota.
  • Services like haircuts, repairs, and professional fees are generally not taxed, but labor charges tied to a taxable product sometimes are.
  • Local rates vary widely by city and county, so the same item costs different amounts in tax depending on where you buy it.

What is and is not taxed in Minnesota

Not everything you buy is subject to sales tax. Groceries and food for home consumption are exempt — this includes bread, milk, vegetables, and meat from a grocery store. Prepared food you eat on site or take out, like restaurant meals or deli sandwiches, is taxed. The line is whether you are buying raw ingredients or a finished meal.

Prescription medications and certain medical devices are also exempt. This includes insulin, inhalers, and devices prescribed by a doctor. Over-the-counter medications like cold medicine or pain relievers are taxed as regular retail goods.

Clothing and shoes are taxed in Minnesota, unlike some states that exempt them. A shirt, pair of jeans, or winter coat all have sales tax added at checkout.

How local taxes add to the state rate

Cities and counties in Minnesota can impose their own sales tax on top of the state rate. A city might add 0.5 percent, a county might add 0.5 percent, and a regional tax district might add another 0.25 percent. These stack on top of each other and on top of the 6.875 percent state rate.

This means a purchase in Minneapolis has a different total tax rate than the same purchase in St. Paul, even though both are in the same metro area. Some areas of the state have no local tax at all, so the rate stays at 6.875 percent. Others have combined rates above 8 percent.

The tax rate that appears on your receipt is always the combined total. If you need to know the breakdown between state and local, the store can tell you, but for most shoppers, what matters is the single number shown at checkout.

Services and labor charges

Services are generally not taxed in Minnesota. A haircut, car repair, plumbing visit, or accounting consultation are not subject to sales tax. However, if a service includes a taxable product — like a mechanic who charges you for both labor and parts — the parts portion is taxed but the labor usually is not.

There are exceptions. Labor to install or apply a taxable item sometimes is taxed. For example, if you buy carpet and pay for installation, the carpet is taxed but the installation labor typically is not. If you buy a car and pay for detailing, the detailing service itself is not taxed. The rule depends on whether the labor is considered part of the sale of a taxable good or a separate service.

When in doubt, ask the business before you pay. They know their own tax obligations and can tell you whether labor will be taxed in your situation.

Tax-exempt purchases and who qualifies

Certain organizations and purchases are exempt from sales tax. Nonprofits, schools, and government agencies can make tax-exempt purchases if they have the right documentation. A nonprofit buying office supplies for its operations would not pay sales tax, but an individual buying the same supplies would.

To make a tax-exempt purchase, you typically need to provide a resale certificate or tax-exempt certificate to the seller. The seller keeps this on file and does not charge tax. This is different from a personal exemption — you cannot simply claim you are tax-exempt as an individual. The exemption belongs to the organization or the type of purchase, not the person.

How sales tax appears on your receipt

When you check out, the sales tax is calculated on the subtotal of your purchase and added as a separate line item before you pay. The receipt shows the subtotal, the tax amount, and the total you owe. The tax amount reflects the combined state and local rate for that location.

If you are buying multiple items with different tax treatments — for example, groceries (not taxed) and a magazine (taxed) — the register calculates tax only on the taxable items. You will see the breakdown on the receipt so you can verify it is correct.

Frequently Asked Questions

Does Minnesota tax clothing and shoes?

Yes. Unlike some states, Minnesota taxes all clothing and footwear at the full sales tax rate. There is no clothing exemption, so a shirt, pair of pants, or winter boots are all subject to tax.

Are groceries taxed in Minnesota?

No. Food you buy at a grocery store for home consumption — bread, produce, meat, dairy — is not taxed. Prepared food like restaurant meals, deli sandwiches, and hot food from a grocery store is taxed.

What is the highest sales tax rate in Minnesota?

The highest combined rate reaches 8.85 percent in some cities, though most areas fall between 7 and 8.5 percent. The rate depends on which city and county you are in, since local taxes stack on top of the 6.875 percent state rate.

Do I pay sales tax on services like haircuts or repairs?

No. Services themselves are not taxed. However, if a service includes a taxable product — like parts in a repair — the product portion is taxed but the labor is not.

Can I get a sales tax refund if I overpaid?

If a store charged you tax on an exempt item by mistake, you can ask the store for a refund. Keep your receipt and contact the store's customer service. For larger disputes, you can file a complaint with the Minnesota Department of Revenue.