Minnesota Small Business Tax Guide — 2026
Income Tax Rate
5.35% — 9.85% (progressive, 4 brackets)
Sales Tax Rate
6.875% state + local (total typically 7% — 8.5%)
Filing Deadline
April 15 (matches federal deadline)
Minnesota Income Tax
Minnesota imposes a state income tax with rates of 5.35% — 9.85% (progressive, 4 brackets). Self-employed individuals, freelancers, and sole proprietors pay this tax on their net business income in addition to federal income tax and federal self-employment tax (15.3%).
Self-Employment in Minnesota
Minnesota taxes self-employment income at progressive rates up to 9.85% — one of the highest in the nation. No separate state SE tax. Minnesota conforms to most federal provisions.
Estimated Tax Requirements
Quarterly estimated payments required if you expect to owe $500 or more. Standard federal due dates apply.
MinnesotaDeductions & Credits
- Minnesota conforms to federal standard and itemized deductions
- Minnesota allows the QBI deduction
- Credit for taxes paid to other states
- Working family credit (similar to federal EITC)
Business Filing Fees
LLC: $155 formation + $0 annual renewal (just file annual renewal online for free). Corporation: $135 formation + annual renewal.
Key Facts About Minnesota Taxes
- Minnesota's top rate of 9.85% is among the highest in the nation
- Minnesota conforms to most federal deductions including QBI
- No annual LLC fee — just a free online renewal
- Clothing is exempt from Minnesota sales tax
Track Your Minnesota Business Expenses
TaxTidy helps Minnesota freelancers and self-employed individuals track every business expense with AI-powered receipt scanning. Snap a photo of any receipt and TaxTidy instantly extracts the vendor, amount, and tax category — then maps it to the correct IRS Schedule C line. At tax time, generate an audit-ready PDF report with all your deductions organized and totaled.
Frequently Asked Questions
What is Minnesota's income tax rate for high earners?
Minnesota's top rate is 9.85% on income over approximately $193,000 (single). The four brackets are 5.35%, 6.8%, 7.85%, and 9.85%.
Does Minnesota allow the QBI deduction?
Yes. Minnesota conforms to the federal Section 199A QBI deduction, allowing self-employed individuals to deduct up to 20% of qualified business income.
When are Minnesota estimated taxes due?
Quarterly on April 15, June 15, September 15, and January 15. Required if you expect to owe $500 or more.
Official source: Minnesota Department of Revenue
TaxTidy provides expense organization tools based on the most current US tax law available to it. TaxTidy is not a CPA, Enrolled Agent, or licensed tax professional. All categorizations, deductions, and tax calculations are estimates. Please verify all data for accuracy and consult a certified tax professional before filing.
Start Tracking Your Minnesota Business Expenses
Free to start — first 25 scans, lifetime. AI categorization, Schedule C mapping, and your personal Audit Readiness Score.
Get Started Free