Key takeaways
- Minnesota sales tax rates: The state rate is 6.875%, and local and Twin Cities metro regional taxes push combined rates to roughly 9.875% or more. Clothing and groceries are exempt.
- Economic nexus: Remote sellers must register once they make more than $100,000 in gross revenue or 200 or more transactions into Minnesota within the previous 12 months.
- Filing & penalties: Monthly returns are due on the 20th, and annual returns by February 5. Late payment costs 5%–15% of the tax due, plus an extra 5% for failing to file.
Minnesota sales tax key facts (2026)
| Item | Minnesota |
|---|---|
| Statewide rate | 6.875% |
| Combined rate range | Up to ~9.875%+ |
| Economic nexus threshold | $100,000 or 200 transactions (prior 12 months) |
| Sourcing | Destination-based |
Collect and file Minnesota sales tax with Taxually: LumaTax monitors your nexus, registers you and files your returns.
Is SaaS taxable?
No.
| Item | Minnesota |
|---|---|
| Groceries / clothing | Exempt |
| Digital products | Taxable |
| Return due date | 20th of the month after the period |
| Governing agency | Minnesota Department of Revenue |
What is the sales tax rate in Minnesota?
Minnesota’s general statewide sales tax rate is 6.875%. Local city, county, and special-district taxes can push combined rates to roughly 9.875% or more — and note that the seven-county Twin Cities metro added regional sales taxes (for housing and transportation) effective January 1, 2024, so metro rates run higher. Use the Minnesota DOR Sales Tax Rate Lookup for an exact rate.
Do you have sales tax nexus in Minnesota?
Nexus is the connection that obligates your business to collect and remit Minnesota sales tax. You can establish it two ways — physically or economically. Either one is enough.
Physical nexus
You have physical nexus if you have a tangible presence in Minnesota, such as:
- A physical place of business such as an office, warehouse, or distribution center
- Employees, independent contractors, or representatives operating in the state
- Delivering goods using business-owned vehicles
- Providing taxable services within Minnesota
- Affiliate/referral relationships where referral sales exceed $10,000 over 12 months
Economic nexus
Out-of-state sellers establish economic nexus once they make more than $100,000 in gross revenue or 200 or more separate transactions into Minnesota within the previous 12 months. Either threshold triggers a duty to register, collect, and remit.
What is taxable in Minnesota?
Tangible personal property is generally taxable; most services are not. Minnesota is notable for exempting clothing, along with groceries, baby products, and over-the-counter drugs. Specified digital products (e-books, digital music and video) are taxable.
Is SaaS taxable in Minnesota?
No. Minnesota does not tax SaaS. (Prewritten software downloaded to the customer is taxable, but remotely accessed SaaS is not.)
How is food taxed in Minnesota?
Groceries for home consumption are exempt. Candy, soft drinks, and prepared foods are taxable, and some areas add a local food-and-beverage tax on restaurant sales.
How to register for a Minnesota sales tax permit
Register with the Department of Revenue for a Minnesota tax ID before collecting. Taxually can register for you, or you can apply online through Minnesota e-Services, by phone, or by paper form. Registration is free.
Have ready: your FEIN (if applicable), legal name and business address, any DBA, NAICS code, the names and SSNs of owners/officers/partners, and a contact email.
How to collect sales tax in Minnesota
Minnesota is destination-based — collect the combined state-plus-local rate for the buyer’s location, including any Twin Cities metro regional taxes. The same applies to remote sellers with nexus.
Filing and paying Minnesota sales tax
Filing frequency depends on liability: monthly (more than $500/month, due the 20th), quarterly ($100–$500/month, due April 20, July 20, October 20, and January 20), or annual (less than $100/month, due February 5). If your annual liability exceeds $10,000, you must pay electronically going forward.
File and pay online through Minnesota e-Services. Taxually’s software automates the full process.
Penalties for late or non-compliant filing
Failing to file or pay on time triggers these penalties:
- Failure to pay: 5% to 15% of the tax due, depending on how late the payment is.
- Failure to file: an additional 5% penalty.
- Interest accrues on the tax plus penalty at the current rate.
Frequently asked questions
What is the sales tax rate in Minnesota in 2026?
The state rate is 6.875%, with local and metro taxes bringing combined rates to about 9.875% or more in some areas.
What is the economic nexus threshold for Minnesota?
More than $100,000 in gross revenue or 200 or more separate transactions in the previous 12 months.
Is SaaS taxable in Minnesota?
No. SaaS is not taxable. Downloaded prewritten software is taxable, and specified digital products are taxable.
Are groceries taxed in Minnesota?
No, groceries are exempt — and so is clothing. Candy, soft drinks, and prepared food are taxable.
When are Minnesota sales tax returns due?
Monthly returns are due the 20th of the following month; quarterly on the 20th after each quarter; annual returns by February 5.
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