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 8.04 percent. Minnesota has a 0.98 percent effective property tax rate on owner-occupied housing value.
Minnesota has an estate tax. Minnesota has a 28.6 cents per gallon gas tax rate and a $3.732 cigarette excise tax rate. The State of Minnesota collects $7,451 in state and local tax collections per capita. Minnesota has $9,980 in state and local debt per capita and has a 75 percent funded ratio of public pension plans. Minnesota’s tax system ranks 44th overall on the 2025 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 towards 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 2024: 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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