Regular readers of Tax Foundation reports know that we publish estimates of the distributional impact of federal tax changes: that is, we estimate how a tax reform might affect the after-tax incomes of taxpayers at...
The facts on Minnesota’s Tax Climate
9.85%Individual Income Tax
9.8%Corporate Income Tax
6.875%Sales and Excise Taxes
Minnesota's Individual Income Tax System
Minnesota's individual income tax system consists of four brackets with a top rate of 9.85%. The top rate ranks 3rd highest among states levying an individual income tax. Minnesota's state and local tax collections per person were $1,651 in 2013, which ranked 6th highest nationally.
50-State Table of Individual Income Tax Rates
Minnesota's Corporate Income Tax System
Minnesota's corporate income tax system consists of a flat rate of 9.8%. That rate ranks 3rd highest among states levying a corporate income tax. Minnesota's state and local corporate income tax collections per person were $251 in 2013 which ranked 9th highest nationally.
50-State Table of Corporate Income Tax Rates
Minnesota Sales and Excise Taxes
Minnesota levies a 6.875% general sales or use tax on consumers, which is above the national median of 5.95%. The average local sales tax rate is an additional 0.4%. Minnesota's state and local governments collect $946 per person in general sales taxes and $817 per person in excise taxes, for a combined figure of $1,763, which ranks 14th highest nationally. Minnesota's gasoline tax stands at 28.6 cents per gallon, 25th highest nationally, while its cigarette tax stands at $3.00, 8th highest nationally.
50-State Table of State and Local Sales Tax Rates
Minnesota Property Tax Collections Relatively High
Minnesota's state and local governments collected approximately $1,547 per person in property taxes in 2013, which ranks 15th nationally.
Tax Freedom Day Arrives on April 30th in Minnesota
Tax Freedom Day is the day when Americans have finally earned enough money to pay off their total tax bill for the year. In 2016, Minnesota taxpayers have to work until April 30th (45th earliest nationally) to pay their total tax bill.
Minnesota's State and Local Tax Burden Ranks 8th
Minnesota's 2016 Business Tax Climate Index Ranks 47th
Minnesota ranks 47th on the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes (46th), individual income taxes (46th), sales taxes (36th), unemployment insurance taxes (29th), and taxes on property (30th), including residential and commercial property.
State Business Tax Climate Index (full study)
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