Minnesota has a graduated state individual income tax, with rates ranging from 5.35 percent to 9.85 percent. Minnesota has a graduated corporate income tax with a top rate of 9.80 percent, a 6.875 percent state sales tax rate, and an average combined state and local sales tax rate of 8.14 percent. Minnesota has a 1.00 percent effective property tax rate on owner-occupied housing value. Minnesota has an estate tax. Minnesota’s gas tax is 32.7 cents per gallon, and its cigarette excise tax is $3.88 per pack of 20 cigarettes.
Minnesota raises tax revenue primarily through individual income taxes (31.0 percent of total state and local tax revenue), property taxes (22.9 percent), and general sales taxes (18.8 percent). Minnesota collects $7,860 in state and local tax collections per capita, carries $8,948 in state and local debt per capita, and has a 95 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. Use the tabs below to compare Minnesota taxes with other states and to see how Minnesota raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: 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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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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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?
9 min read
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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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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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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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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A recent proposal in Minnesota exempting certain nonresident workers from having to file and pay income taxes would reduce compliance costs for business travelers and their employers at limited cost to the state.
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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 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
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As a rule, an individual’s income can be taxed both by the state in which the taxpayer resides and by the state in which the taxpayer’s income is earned.
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Forty-four states levy corporate income tax. Top rates range from a 2.25 percent flat rate in North Carolina to a 11.5 percent top marginal rate in New Jersey.
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Americans were on the move in 2024, and many chose low-tax states over high-tax ones.
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Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
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