Minnesota State Tax
Income taxes in Minnesota are combined between state and local taxation so personal income tax rate can be as high as 10% Like other states, there are excise taxes of liquor, beer and cigarettes, as well as vehicle taxes. There are also property taxes that must be given consideration. Tax returns are due on April 15.
Minnesota state sales tax – 6.875%, (food, clothing, prescription and nonprescription drugs exempt). This is in addition to local sales taxes. Use taxes may be applicable for purchases made out of state for use in Minnesota.
Minnesota personal income tax
There are three tax brackets:
o 5.35 percent on the first $22,770 of taxable income.
o 7.05 percent on taxable income between $23,771
o 7.85 percent on taxable income of $74,781 and above.
o 5.35 percent on the first $33,280 of taxable income.
o 7.05 percent on taxable income between $33,281 and $132,220.
o 7.85 percent on taxable income of $132,221 and above.
Minnesota state excise taxes
Taxes assessed on vehicles, alcohol, tobacco, gasoline and are in addition to federal excise taxes.
- $.48 per package of 20 cigarettes
- .04 per liter of cider, up to 7% alcohol
- $2.40 per 31 gallon barrel of beer under 3.2% alcohol, $4.60 for over 3.2%, exemption for small brewers under 100,000 for taxes on first 25,000 barrels.
- $.08 per liter of wine, 4% alcohol or less, up to $.93 for wine greater than 24% alcohol by volume.
- $.20 for all highway fuels, slightly lower for ethanol and methanol blends
- $.15 for liquefied petroleum gas
Minnesota marijuana tax
- $3.50 per gram
This tax can be used to charge dealers for tax evasion, in addition to other charges for selling illegal drugs. Purchasers of these stamps are not under investigation and some may simply collect these stamps.
Minnesota inheritance tax
There are no longer taxes on inheritance and estates in Minnesota. Only federal laws are in effect.
Minnesota payroll taxes
State Disability Insurance – none
State Unemployment Insurance – .07014% to 11.05032%, wage base is $27,000. Employer contribution is 1.910%. High experience rating industry employer’s contribution is 8%. Workplace enhancement fee assessment of .12%.
State minimum wage follows federal law
Minnesota state property tax
Property tax is local and depends on the city or county in Minnesota. Tax rates depend on property assessment and use of the property. The classification of the property will determine the percentage taxation by the county.
There are personal exemptions from taxation that total $3,650 for individuals and $7,300 for couples. Dependents are subject to a $3,650 exemption.
Many pensions, including social security, can be taxed by Minnesota. This excludes railroad retirement pensions. Senior citizens can claim some exemptions from property and other taxes if their income falls below a $60,000 threshold.
There are two property tax refund programs for homeowners, each depending on income and property tax assessed.
Military retirement pay is not taxed. This includes benefits passed to the surviving spouse. Military disability and veteran’s pensions are almost always exempt from federal and Minnesota state taxation.