Minnesota State Taxes: A Simple Guide

⭐Minnesota state income tax

Minnesota taxes personal income under its own set of brackets, definitions, and rules that differ from federal law. In general:

• •Residents must file a Minnesota income tax return if they exceed certain income thresholds.
• •Nonresidents may need to file if they earn Minnesota-source income.
• •Minnesota's income calculations, deductions, and credits differ from federal rules.

Most residents file a federal Form 1040 and a Minnesota return if required.

🛒Sales and use tax

Minnesota has a state sales tax, and counties and cities may add local sales taxes, leading to varied combined rates across the state.

• •Many goods and some services are taxable.
• •Out-of-state purchases without tax may require use tax to Minnesota.

Businesses generally must collect and remit state and local sales taxes on taxable transactions.

🏡Property taxes

Minnesota property taxes are set and collected primarily by counties, cities, school districts, and townships. Taxes are based on assessed real property values.

• •Homeowners receive local property tax bills each year.
• •Minnesota offers several property tax refund or relief programs, often based on income or residency.
• •Rates vary by location and funding needs of local governments.

🔗Putting Minnesota taxes together

A Minnesota resident typically deals with:

• •Federal income tax (Form 1040)
• •Minnesota state income tax
• •State and local sales and use taxes
• •Local property taxes if they own a home

Once you understand how tax filing works, applying Minnesota's rules becomes much easier.