Tool | January 2018

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, sin products, property, and more -- across the U.S.


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The Bottom Line
Map of Minnesota

Least Tax-Friendly

The North Star State hits hard with income tax. It added a new top income tax rate of 9.85% in 2013. But what makes Minnesota really stand out is that its lowest income tax rate is 5.35%. Property taxes are on the high side. It's one of Kiplinger's top ten least tax-friendly states.

Sales Tax

6.875% state levy. Localities can add as much as 1.5%, with an average combined rate of 7.30%, according to the Tax Foundation. Most clothing and footwear are exempt.

Income Tax Range

Low: 5.35% (on less than $25,390 of taxable income for single filers and on less than $37,110 for joint filers)

High: 9.85% (on more than $155,911 of taxable income for single filers and on more than $261,510 for joint filers)

Effective income tax rate: 5.8%/individual, 6.6%/joint

See’s Retiree Tax Map to learn how Minnesota taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.29 per gallon.
Diesel: $0.29 per gallon.

Property Taxes

The median property tax on Minnesota's median home value of $186,200 is $2,200.

See’s Retiree Tax Map for details on tax breaks for seniors in Minnesota.

Vehicle Taxes

6.5% sales tax is due at purchase (slightly below general sales tax, and no local tax is computed).

Sin Taxes

Cigarettes and little cigars: $3.00 per pack
Premium cigars: 90% of the wholesale price with a $3.50 per cigar cap
Moist snuff: 90% of the wholesale price, or at least $2.83 per container
Other tobacco products: 90% of the wholesale price

Beer: $0.47 per gallon
Wine: $1.13 per gallon
Liquor: $8.67 per gallon
A 2.5% gross-receipts tax is also due except in the case of beer with an alcohol content of 3.2% (only sales tax applies). E-cigarettes/juice: 95% of wholesale price.

Travel Taxes

Hotel: There is no statewide lodging tax. Localities, however, can add their own lodging taxes. Sales tax is also due. In Minneapolis, this adds up to 13%.

Rental cars: 9.2%, plus sales tax.

Taxes On Wireless Service


Inheritance and Estate Taxes

Minnesota has no inheritance tax. But it does have an estate tax, though it has been easing its burden. Midyear in 2017, the state raised the 2017 exemption to $2.1 million, rising to $2.4 million in 2018, $2.7 million in 2019, and $3.0 million in 2020. Rates range from 12 percent to 16 percent; bottom rate increases to 13 percent in 2018.

Oddball Tax

The champagne lifestyle will cost you in Minnesota. Bubbly is taxed six times as much as regular wine, even if the alcohol content is the same.

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