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Minnesota state tax laws to comply with

Taxes are an integral aspect of most organized societies. They pay for public services performed by the government, including the construction and maintenance of roads and bridges, education, defense, social programs and others. 

The U.S. regulates these tariffs on federal, state and local levels. Minnesotans need to comply with multiple state statutes regarding taxes. 

Sales tax laws

The Gopher State requires sellers to collect sales taxes on the state’s behalf rather than paying the taxes themselves and passing them on to customers. Vendors who fail to do so and follow appropriate procedures may end up legally liable. Currently, remote sellers from other states who deliver to locations in Minnesota must also do this. An exception is if they operate through a marketplace that performs the task for them. There is also exemption through the Small Sellers Exception. While most retail sales are taxable, not all are. There is also a use tax rate (same percentage as the sales tax rate) both businesses and individuals must pay directly to the state. It covers taxable items and services where the buyers did not pay sales tax to the merchant. 

Personal income tax laws

Employers must withhold federal and state income taxes and Federal Insurance Contributions Act, or FICA, taxes from their workers’ paychecks, deposit them and file returns regularly based on factors like income tax brackets. (This does not apply to independent contractors.) These categories undergo annual adjustments to account for the effects of inflation on earnings. For example, according to a 2020 press release from the Minnesota Department of Revenue, the 2021 ones differ from the 2020 ones by 1.001%. This does not influence the Minnesota tax rate for each grouping. 

Estate tax laws

Minnesota does not levy an inheritance tax. However, heirs of an IRA, annuity or other bequest holding money the decedent did not pay tax on may end up subject to income tax. There is also an estate tax. 

Following state tax laws helps businesses and individuals avoid legal responsibility for unpaid fees as well as additional fines. 

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Edina Tax Law Office
Pridgeon & Zoss, PLLC
7301 Ohms Lane, Suite 420
Edina, MN 55439

Telephone: 952-835-8320
Fax: 952-835-0201
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St. Anthony Tax Law Office
Pridgeon & Zoss, PLLC
2812 Anthony Lane South, Suite 200
St. Anthony, Minnesota 55418

Telephone: 612-455-8948
Fax: 612-788-9879
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