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 41st overall on the 2027 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.
122 min read
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.
2 min read
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.
18 min read
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.
5 min read
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.
9 min read
Taxes are an important part of the mix, and modernizing a state’s tax structure helps position it for growth. States that rank better on the Index have better-structured tax codes, and states with better-structured tax codes get Wins Above Replacement.
5 min read
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.
121 min read
In red and blue states alike, voters showed wariness toward novel changes to the tax code, with two notable exceptions.
3 min read
Cigarette smuggling is costly for states. We estimate that the forgone revenue from smuggled cigarettes totaled more than $4.6 billion in 2024. California lost nearly $1.4 billion in cigarette excise tax collections, and New York missed out on more than $1.2 billion.
5 min read
Imposing sales taxes on rental car companies’ fleet purchases, in addition to the sales and rental car excise taxes levied when those cars are rented, yields double taxation and causes harmful tax pyramiding.
9 min read
In addition to the federal estate tax, which has a top marginal rate of 40 percent, 12 states and the District of Columbia impose estate taxes, while five states levy inheritance taxes.
8 min read
Corporations in the United States pay federal corporate income taxes levied at a 21 percent rate. Forty-four states and DC also levy taxes on corporate income, with top marginal rates ranging from 2.5 percent in North Carolina to 11.5 percent in New Jersey.
2 min read
High property taxes levied not only on land but also on buildings and structures can discourage investment in infrastructure, which businesses would have to pay additional tax on.
3 min read
Applying the sales tax, a traditional broad-based consumption tax, is perfectly appropriate, but excessive targeted taxation of wireless services lacks the traditional justifications—a user-pays system or the internalization of social costs—for excise taxation, raising consumer costs and discouraging investment.
5 min read
Oral nicotine pouches have rapidly become a popular option for consumers who want nicotine without the harmful combustion and chemicals of traditional cigarettes. As these alternative nicotine products (ANPs) successfully draw smokers to non-combustible nicotine consumption, many states have scrambled to incorporate these new products into their tax regimes.
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