MN
Minnesota Small Business Tax Guide
Minnesota's sales tax, local taxes, due dates and 2026 income tax brackets for small businesses, in the Department of Revenue's own words. Not tax advice.
Disclaimer: This page is educational content only. Tax laws change, and your situation may differ. It is not legal, tax, or financial advice. Consult a qualified professional licensed in Minnesota before making filing or planning decisions.
Tax landscape for small businesses
Minnesota sales tax combines a state rate with local ones. The Minnesota Department of Revenue (Minnesota, checked October 31, 2026) says: "To figure the sales tax rate, combine the state general tax rate (6.875%) and all applicable local tax rates (local taxes, special local taxes, and special taxes)." It applies to services as well as goods: "Sales tax is charged by the seller and applied to retail sales of taxable services and tangible personal property sold in Minnesota." For invoices, it says: "Add sales tax to the selling price. Show the tax separately on the receipt or invoice".
Location decides the local part; the Department (Minnesota, checked October 31, 2026) says: "All sellers, regardless of location, must collect local based on where the customer receives the taxable product or service." On income tax, the Department says: "Minnesota’s income tax rates and brackets are set by state law." and "These tables outline Minnesota’s tax rates and brackets for tax year 2026." Those tables use rates of "5.35%", "6.80%", "7.85%" and "9.85%". For corporations, it says Corporation Franchise Tax "applies to companies that file annual federal income tax returns as C corporations and meet at least one of the following", and lists "Located in Minnesota", "Have a business presence in Minnesota" and "Have Minnesota gross income". This page doesn't quote the corporate franchise tax rate; check the Department's corporate pages.
Worked example (sample figures, not tax advice): a Minnesota business invoices $1,000.00 for a taxable service delivered where no local tax applies. At the Department's 6.875% state general rate (Minnesota, checked October 31, 2026), the sales tax is $1,000.00 × 6.875% = $68.75, shown separately as the Department asks, for a total of $1,068.75. Where local taxes apply, add their rates first.
Tax overview
Each row lists a tax area and its notes. Confirm current figures with your state's tax agency or the IRS.
| Tax type | Rate or basis | Notes |
|---|---|---|
| State general sales tax | "6.875%" (the Minnesota Department of Revenue (Minnesota, checked October 31, 2026)) | Combined with any local taxes that apply where the customer receives the product or service. For sellers outside Minnesota, the Department's remote sellers page (Minnesota, last updated March 13, 2026) says: "Remote sellers are required to file and collect Minnesota state and local sales tax if their total sales over the prior 12-month period total exceed either:" "200 or more retail sales shipped to Minnesota" or "More than $100,000 in retail sales shipped to Minnesota". On resale, the same page says: "The purchaser must give you a completed Form ST3, Certificate of Exemption claiming the resale exemption." |
| Local sales taxes | "Some cities and counties have local sales and use taxes." (the Minnesota Department of Revenue (Minnesota, checked October 31, 2026)) | The Department says: "All sellers, regardless of location, must collect local based on where the customer receives the taxable product or service." |
| Individual income tax | "5.35%" to "9.85%" for tax year 2026 (the Minnesota Department of Revenue (Minnesota, checked October 31, 2026)) | Four rates in the Department's 2026 tables, with brackets that differ by filing status. |
Filing requirements
This list isn't a complete checklist for your business.
Show sales tax on the invoice
The Minnesota Department of Revenue (Minnesota, checked October 31, 2026) says: "Add sales tax to the selling price. Show the tax separately on the receipt or invoice"
Sales tax return due dates
The Department's due-date table (Minnesota, checked October 31, 2026) lists "December 2026 (monthly and quarterly)" returns as due "January 20, 2027" and "Annual (calendar year 2026)" returns as due "February 5, 2027".
Federal estimated tax
The IRS's estimated taxes page (IRS, In the US (federal), last reviewed or updated September 25, 2026) says: "Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments."
Deductions and write-offs
Confirm with your state how it treats each item.
- Self-employment tax (IRS, In the US (federal), last reviewed or updated October 30, 2026): "You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income."
- Health insurance (same IRS page): "Under Section 2042 of the Small Business Jobs Act, a deduction, for income tax purposes, is allowed to self-employed individuals for the cost of health insurance."
- How Minnesota treats these federal deductions isn't covered on this page; ask the Department or a tax professional.
Practical tips
- The Department (Minnesota, checked October 31, 2026) says: "Use our Sales Tax Rate Calculator." Check it for each sale's address.
- List the sales tax on its own line, as the Department (Minnesota, checked October 31, 2026) asks.
- Check the Department's due-date table each year, since the dates are listed by period.
- Prepare for tax time. Billed's features page says: "Create expense report easily to give your accountant all the information required for tax filing."
Frequently asked questions
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At a glance
| Tax | Department wording |
|---|---|
| State general sales tax | "6.875%" (Minnesota Department of Revenue, checked October 31, 2026) |
| Individual income tax, 2026 | "5.35%" to "9.85%" (Minnesota Department of Revenue, checked October 31, 2026) |
| Annual sales tax return, 2026 | due "February 5, 2027" (Minnesota Department of Revenue, checked October 31, 2026) |
| Federal self-employment tax | "The self-employment tax rate is 15.3%." (IRS, In the US (federal), last reviewed or updated October 30, 2026) |
When this isn't for you
This page is limited to Minnesota's general sales tax and income tax points for small businesses. Special local taxes, payroll, the corporate franchise tax rate and multi-state questions are outside its scope, and it isn't tax advice; ask the Minnesota Department of Revenue or a tax professional about your business.