State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

Minnesota State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Minnesota

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The Bottom Line
Flag of Minnesota

Mixed Tax Picture

Minnesota's income tax rates start at 5.35%, which isn't necessarily a good sign for middle-class taxpayers. Nevertheless, the income tax burden in the North Star state for middle-income residents is decidedly average. The same can be said about the state's sales tax burden. When you add in property taxes that are only slightly higher than average, you get a very ordinary overall state and local tax burden.

Income Tax Range

Low: 5.35% (on less than $27,230 of taxable income for single filers and on less than $39,810 for joint filers)

High: 9.85% (on more than $166,040 of taxable income for single filers and on more than $276,200 for joint filers)

Sales Tax

6.875% state levy. Localities can add as much as 2%, with an average combined rate of 7.47%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Exempt
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 6.5% excise tax ($10 for certain older vehicles; $150 for certain collector vehicles)
Prescription Drugs: Exempt

Real Property Taxes

In Minnesota, the median property tax rate is $1,082 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 30.6¢ per gallon.
Diesel: 30.6¢ per gallon.

Sin Taxes

Cigarettes and little cigars: $3.673 per pack (excise tax plus special sales tax) ($3.703 per pack beginning in 2022)
Premium cigars: the lesser of 95% of the wholesale price or $0.50 per cigar
Moist snuff: the greater of 95% of the wholesale price or $3.04 multiplied by the ounces and divided by 1.2
Other tobacco products: 95% of the wholesale price
Vapor products: 95% of wholesale price

Beer: $0.15 per gallon
Wine: $0.30 per gallon ($1.82 per gallon for sparkling)
Liquor: $5.03 per gallon
A 2.5% gross-receipts tax is also due on all alcohol purchases, in addition to sales tax.

Annual Car Taxes and Fees

An annual vehicle registration tax based on the car's sticker price (MSRP) and age is imposed.

Estate and Inheritance Taxes

Minnesota's estate tax exemption is $3 million, but the state looks back to include any taxable gifts made within three years prior to death as part of your estate. Tax rates range from 13% to 16%.


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