Minnesota State Tax
Minnesota Income Tax
There are over 28 types of taxes in Minnesota- the major ones being income tax, property tax, and sales tax. These taxes are used to subsidize state operations, education, infrastructure, and social service programs.
Income tax collections make up over 40% of the Minnesota State income. Personal income tax rates are divided into three progressive marginal tax brackets. The state collects 5.35% income tax rate on incomes up to $23,100; 7.05% on incomes up to $75,890; and 7.85% on incomes over $75,890. The maximum marginal income tax rate in Minnesota is the 9th highest rate in the United States. The Minnesota income tax structure allows joint filers to pay lower tax rates on their combined incomes.
There are several tax credits available in the state. Among those who qualify for tax credits are married individuals, people who pay taxes in another state, individuals who served or are now serving the military, etc.
Businesses and corporations are also subject to corporate income tax. The current rate in Minnesota is 9.8% for all income levels- the third highest maximum marginal corporate income tax rate in the US.
Minnesota Property Tax
The State of Minnesota collects an average 1.05% property income tax rate per year.
Minnesota Sales Tax
Actual sales tax rates in Minnesota range from 6.875% to 7.875% after surtax. Municipalities, counties, and cities are allowed to impose up to 1% local sales tax on top of the state sales tax. Groceries, prescription drugs and clothing items are exempted from tax, but alcohol is subject to 2.5% special tax over state and local sales taxes.