Minnesota — Sales & Use Tax

Minnesota imposes a combined state sales and use tax of 6.875% on retail sales of tangible personal property and certain enumerated services made in or delivered to Minnesota. The tax consists of two components: a base rate of 6.5% and an additional constitutionally required rate of 0.375% that expires July 1, 2034.

Source: Minn. Stat. § 297A.62, subd. 1 Source: Minn. Stat. § 297A.62, subd. 1a

## What transactions are taxable

A "retail sale" subject to tax means (1) any sale, lease, or rental of tangible personal property for any purpose other than resale, sublease, or subrent in the normal course of business, and (2) any sale of an enumerated service for any purpose other than resale.

Source: Minn. Stat. § 297A.61, subd. 4

Tangible personal property includes physical goods that can be seen, weighed, measured, felt, or touched and expressly includes electricity, water, gas, steam, and prewritten computer software (whether delivered electronically or otherwise).

Source: Minn. Stat. § 297A.61, subd. 10

Taxable services are specifically enumerated under statute and include, among others: (1) admission to places of amusement, recreational areas, or athletic events; (2) furnishing parking or storage of motor vehicles in a parking lot or ramp; (3) telecommunications services; (4) detective, security, and armored car services; and (5) lawn care and certain property maintenance services. Services not expressly listed are not taxable.

Source: Minn. Stat. § 297A.61, subd. 3(g)

## Complementary use tax

Minnesota imposes a complementary use tax at the same 6.875% rate on the storage, use, distribution, or consumption of tangible personal property or taxable services in Minnesota when no sales tax was paid at the time of purchase. The use tax typically applies when a Minnesota purchaser buys taxable goods or services from an out-of-state seller that does not collect Minnesota sales tax.

Source: Minn. Stat. § 297A.63 Source: Minnesota Department of Revenue, Sales and Use Tax

## Local sales taxes

Sales tax in Minnesota is imposed at both state and local levels. Many political subdivisions impose additional local general sales taxes and special local taxes on specific items such as lodging, restaurant meals, liquor, admissions, and entertainment. The combined state and local rates as of 2026 range from 6.875% (state rate only) to approximately 9.025% in certain jurisdictions.

Source: Minn. Stat. § 297A.99 Source: Minnesota Department of Revenue, Local Sales and Use Tax Rate Guide (Q2 2026)

The Minnesota Department of Revenue administers both state and local general sales taxes centrally through a single permit and filing system; sellers file one return that covers all applicable jurisdictions.

Source: Minnesota Department of Revenue, Taxes and Rates

Remote sellers without a physical presence in Minnesota must register and collect sales tax if, during the prior 12-month period, they make more than $100,000 in retail sales to Minnesota destinations OR conduct 200 or more separate retail sales to Minnesota destinations. Either threshold triggers the collection obligation. Sellers must register and begin collecting tax by the first day of the calendar month occurring no later than 60 days after exceeding either threshold.

Source: Minn. Stat. § 297A.66, subd. 1(c) Source: Minnesota Department of Revenue, Sales Tax FAQs for Remote Sellers

Marketplace providers in Minnesota must collect and remit sales tax on all retail sales they facilitate unless both (1) the retailer provides a copy of its Minnesota sales tax registration to the marketplace provider, and (2) the marketplace provider and retailer agree that the retailer will collect the tax. A marketplace provider is any person who both lists or advertises tangible personal property, services, or digital goods for a retailer and processes customer payments, directly or indirectly. This requirement took effect October 1, 2018; thresholds were revised effective October 1, 2019.

Source: Minn. Stat. § 297A.66, subd. 3 Source: Minnesota Department of Revenue, Sales Tax for Marketplace Providers

Sales of tangible personal property for resale in the normal course of business are exempt from Minnesota sales tax. A seller is relieved of liability if the seller obtains a fully completed exemption certificate from the purchaser at the time of sale or within 90 days after the sale. The certificate may be a blanket certificate for continuing future purchases. Sellers must retain exemption certificates and, upon request by the Commissioner, produce them within 120 days; failure to do so creates a presumption that the claimed exemption is disallowed, though the seller may rebut this by showing reasonable cause or by providing alternative proof of the exempt nature of the sale.

Source: Minn. Stat. § 297A.61, subd. 4(a)(1) Source: Minn. Stat. § 297A.665(b) Source: Minn. Stat. § 297A.72

Minnesota assigns sales and use tax filing frequency based on a retailer's average monthly tax liability, including both state and local sales and use taxes administered by the Commissioner of Revenue. The default filing period is monthly, but retailers may request authorization from the Commissioner to file quarterly or annually if they meet specific liability thresholds and compliance requirements.

## Monthly filing (default)

Sales and use tax returns must be filed on or before the 20th day of the month following the close of the preceding reporting period. For monthly filers, this means that January sales tax is due February 20, February sales tax is due March 20, and so on. Payment must accompany the return.

Exception for high-liability vendors in June. Retailers required to remit accelerated June payments under Minn. Stat. § 289A.20, subd. 4(b)—those with a sales tax liability of $250,000 or more during a fiscal year ending June 30—have an extended due date for their June return. These vendors must remit 5.6% of their estimated June liability two business days before June 30 of the next calendar year, and then file their June return and remit the remaining June liability on or before August 20. All other retailers follow the standard monthly due date of July 20 for June returns.

## Quarterly filing authorization

A retailer may request authorization to file and pay sales and use taxes quarterly if the retailer meets both of the following conditions:

• The retailer has an average sales and use tax liability (including local sales and use taxes administered by the Commissioner) equal to or less than $500 per month in any quarter of a calendar year; and
• The retailer has substantially complied with the tax laws during the preceding four calendar quarters.

If the Commissioner grants quarterly filing authorization, it remains in effect as long as the retailer's quarterly returns reflect sales and use tax liabilities of less than $1,500 per quarter and the retailer continues to comply with state tax laws. Quarterly returns are due on the 20th day of the month following the close of each calendar quarter (April 20, July 20, October 20, and January 20).

## Annual filing authorization

A retailer may request authorization to file and pay sales and use taxes annually if the retailer meets both of the following conditions:

• The retailer has an average sales and use tax liability (including local sales and use taxes administered by the Commissioner) equal to or less than $100 per month during a calendar year; and
• The retailer has substantially complied with the tax laws during that period.

If the Commissioner grants annual filing authorization, it remains in effect as long as the retailer's annual returns reflect sales and use tax liabilities of less than $1,200 per year and the retailer continues to comply with state tax laws. Annual sales tax returns for businesses, including sole proprietorships, are due February 5 following the close of the calendar year. (Note: Individual taxpayers filing annual use tax returns under Minn. Stat. § 289A.11, subd. 1, have a different due date of April 15.)

## Commissioner's discretion to grant alternative filing frequencies

The Commissioner may also grant quarterly or annual filing and payment authorizations to retailers if the Commissioner concludes that the retailers' future tax liabilities will be less than the monthly thresholds identified above ($500 for quarterly, $100 for annual). Discretionary authorizations granted under this provision are subject to the same conditions as the standard quarterly and annual authorizations described above.

## Electronic filing and payment requirements

All sales and use tax returns must be filed electronically through the Minnesota Department of Revenue's e-Services system. Additionally, a retailer with a sales and use tax liability of $10,000 or more during the state's fiscal year (July 1 – June 30) must remit all tax liabilities by electronic means beginning with all subsequent calendar years.

Source: Minn. Stat. § 289A.18, subd. 1 Source: Minn. Stat. § 289A.20, subd. 4

Minnesota exempts clothing and footwear from sales and use tax without regard to price. "Clothing" means all human wearing apparel suitable for general use. Unlike Massachusetts, New York, or other states with dollar thresholds, Minnesota's exemption applies to clothing items at any price point, making it one of the broadest clothing exemptions in the United States.

What qualifies as exempt clothing

Exempt clothing includes everyday apparel suitable for general use, regardless of whether it is actually worn for work, recreation, or daily activities. The statute explicitly includes—among many other items—aprons (household and shop), athletic supporters, baby receiving blankets, bathing suits and caps, belts and suspenders, boots, coats and jackets, costumes, disposable diapers (child and adult), ear muffs, footlets, formal wear, garters and garter belts, girdles, gloves and mittens for general use, hats and caps, hosiery, insoles for shoes, lab coats, neckties, overshoes, pantyhose, rainwear, rubber pants, sandals, scarves, shoes and shoe laces, slippers, sneakers, steel-toed shoes, underwear, uniforms (athletic and nonathletic), and work clothes.

The critical test is whether the item is "suitable for general use." An item qualifies even if it has protective qualities or is designed for a particular profession, so long as a person could reasonably wear it outside that specific context. For example, flame-resistant work shirts, high-visibility reflective jackets, hospital scrubs, chef's whites, coveralls, and general work uniforms all qualify as exempt clothing because they can be worn for everyday purposes. Steel-toed shoes are expressly included in the statute's enumeration of exempt clothing.

Costumes are exempt clothing. However, costume masks, patches, and emblems sold separately from the costume are taxable accessories.

Clothing accessories and equipment — taxable

Clothing accessories or equipment are not exempt and remain fully taxable. "Clothing accessories or equipment" means incidental items worn on the person or in conjunction with clothing. Taxable accessories include, but are not limited to:

• Briefcases
• Cosmetics
• Hair notions (barrettes, hair bows, hairnets)
• Handbags
• Handkerchiefs (decorative; a scarf worn for warmth is exempt clothing)
• Jewelry
• Nonprescription sunglasses
• Umbrellas
• Wallets
• Watches
• Wigs and hairpieces

Sports or recreational equipment — taxable

Sports or recreational equipment is taxable. "Sports or recreational equipment" means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use. Taxable sports and recreational equipment includes, but is not limited to:

• Ballet and tap shoes
• Cleated or spiked athletic shoes
• Ski boots
• Roller skates and ice skates
• Gloves designed for a specific sport (baseball, bowling, boxing, hockey, golf gloves)
• Goggles
• Hand and elbow guards
• Life preservers and vests
• Mouth guards
• Shin guards
• Shoulder pads
• Wetsuits and waders

Standard sneakers remain exempt because they work for everyday wear. The dividing line is whether the item is built for a single sport or recreational activity; once a shoe is cleated, spiked, or otherwise designed exclusively for one activity, it is taxable sports equipment rather than exempt clothing.

Protective equipment — taxable

Protective equipment designed to shield the wearer from injury or disease and not suitable for general use is taxable. Taxable protective equipment includes helmets, safety goggles, face shields, hard hats, and similar items. Note the distinction: clothing that has protective qualities (such as flame-resistant shirts or steel-toed shoes enumerated in the statute) does not become taxable protective equipment if the item is suitable for general use. The exemption turns on whether the item can reasonably be worn as part of everyday apparel, not whether it happens to protect the wearer.

Fur clothing — taxable

Fur clothing is taxable. "Fur clothing" means human wearing apparel that is required to be labeled as a fur product under federal law and the value of the fur is more than three times the value of the next most valuable component. "Fur" means any animal skin with the hair, fleece, or fur fibers attached; it does not include leather, suede, or other animal skins where the fur fiber was completely removed in the processing.

Sewing materials

Sewing materials that are typically incorporated into the construction of clothing—fabric, thread, zippers, interfacing, buttons, trim, and similar items—are exempt from sales tax regardless of whether they are actually used for making clothing. This exemption is found in Minn. Stat. § 297A.67, subd. 27. Sewing equipment (sewing machines, scissors, needles) is taxable.

Services performed on clothing

Some services performed on clothing are taxable. Alteration services are taxable when separately stated on the customer invoice; if the alteration charge is included in the clothing sales price without separate statement, no sales tax is due on the entire transaction. Laundry, dry cleaning, pressing, dyeing, and shoe repair services are taxable services under Minn. Stat. § 297A.61, subd. 3(g).

Effective date and legislative history

Minnesota's clothing exemption was enacted as part of the state's conformity with the Streamlined Sales and Use Tax Agreement in 2000 (2000 Minn. Laws ch. 418, art. 1, § 11) and became effective with the comprehensive recodification of Minnesota's sales tax statutes. The exemption has remained in place without a sunset provision or price cap.

Source: Minn. Stat. § 297A.67, subd. 8 Source: Minn. Stat. § 297A.61, subd. 46 (fur clothing definition) Source: Minnesota Department of Revenue, Clothing Sales Source: Minnesota Department of Revenue, Sales Tax Fact Sheet 105 – Clothing