Taxable Items in Minnesota
- Ice Cream Taxability: In Minnesota, ice cream is taxable if sold as prepared food. However, ice cream bars, requiring refrigeration, are not taxable as candy.
- Minnesota Sales Tax: Destination-based sales tax charged in Minnesota at the buyer’s local rate, typically 7.78%.
Tax Exemptions in Minnesota
- Non-Taxable Items: Sales of most goods and services in Minnesota are subject to a general sales tax rate of 6.875%. Some exceptions include clothing, prescription drugs, and certain services.
Taxable Food Items in Minnesota
In Minnesota, food items fall under different tax rules. Candy, sweet baked goods, and breath mints are taxed as candy. Grocery items like milk, vegetables, meat, and cereal are not taxed. Prepared foods sold in bars, restaurants, or sold heated are taxable. Food prepared off-site or sold cold in grocery stores may be exempt. Bottled water and canned goods are not taxed.
Some cities in Minnesota collect an additional local sales tax, up to 1.5%, on restaurant meals and other goods. Groceries, clothing, newspapers, and prescription drugs are exempt from sales tax. Professional services in Minnesota are generally not taxable unless they result in the production of a product for sale.
MN Tax Rate Information
- Minnesota Income Tax Rate: For the 2018 – 2019 period, Minnesota has four income tax brackets with rates ranging from 5.35% to 9.85% for various filing statuses.
- Calculating MN State Tax: To calculate 2018 Minnesota State Income Tax, use the State Income Tax Table corresponding to your filing status.