How does Minnesota’s tax code compare? Minnesota has a graduated state individual income tax, with rates ranging from 5.35 percent to 9.85 percent. Minnesota has a 9.8 percent corporate income tax rate. Minnesota also has a 6.875 percent state sales tax rate and an average combined state and local sales tax rate of 8.13 percent. Minnesota has a 0.99 percent effective property tax rate on owner-occupied housing value.
Minnesota has an estate tax. Minnesota has a 31.9 cents per gallon gas tax rate and a $3.826 cigarette excise tax rate (per pack of 20 cigarettes). The State of Minnesota collects $8,050 in state and local tax collections per capita. Minnesota has $8,976 in state and local debt per capita and a 93 percent funded ratio of public pension plans. Minnesota’s tax system ranks 44th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Minnesota is no exception. The first step toward understanding Minnesota’s tax code is knowing the basics. How does Minnesota collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2025: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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In response to the new federal tax law, the governor and lawmakers in both houses have proposed plans for updating Minnesota’s tax code.
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