October 17, 2018

Minnesota: Who Pays? 6th Edition

MINNESOTA

MINNESOTA STATE AND LOCAL TAXES

Taxes as Share of Family Income

					Top 20%
Income Group	Lowest 20%	Second 20%	Middle 20%	Fourth 20%	Next 15%	Next 4%	Top 1%
Income Range	Less than $25,400	$25,400 to $43,600	$43,600 to $70,700	$70,700 to $115,300	$115,300 to $227,900	$227,900 to $573,500	over $573,500
Average Income	$13,800	$34,100	$56,400	$90,300	$152,200	$337,200	$1,452,500
Sales & Excise Taxes	6.5%	5.0%	3.9%	3.1%	2.3%	1.5%	0.8%
General Sales – Individuals	2.5%	2.1%	1.7%	1.5%	1.2%	0.8%	0.4%
Other Sales & Excise – Ind.	1.9%	1.1%	0.7%	0.5%	0.4%	0.2%	0.1%
Sales & Excise on Business	2.2%	1.9%	1.4%	1.1%	0.8%	0.5%	0.3%
Property Taxes	2.5%	2.6%	2.8%	3.0%	2.6%	2.3%	1.8%
Home, Rent, Car – Ind.	2.3%	2.3%	2.5%	2.6%	2.2%	1.8%	0.4%
Other Property Taxes	0.3%	0.3%	0.3%	0.4%	0.4%	0.5%	1.3%
Income Taxes	-0.3%	1.7%	3.1%	3.8%	4.6%	5.6%	7.6%
Personal Income Tax	-0.4%	1.6%	3.0%	3.8%	4.5%	5.5%	7.3%
Corporate Income Tax	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.3%
TOTAL TAXES	8.7%	9.3%	9.7%	10.0%	9.5%	9.4%	10.1%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Minnesota

Progressive Features	Regressive Features
Graduated personal income tax structure Limits itemized deductions for upper-income taxpayers Provides a refundable working families tax credit Provides a refundable property tax “circuit breaker” credit Provides a refundable dependent care tax credit Sales tax base excludes groceries Requires the use of combined reporting for the corporate income tax Levies a state estate tax	Comparatively high sales tax rate Comparatively high cigarette tax rate

Progressive Features

Regressive Features

Graduated personal income tax structure
Limits itemized deductions for upper-income taxpayers
Provides a refundable working families tax credit
Provides a refundable property tax “circuit breaker” credit
Provides a refundable dependent care tax credit
Sales tax base excludes groceries
Requires the use of combined reporting for the corporate income tax
Levies a state estate tax

Comparatively high sales tax rate
Comparatively high cigarette tax rate

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Minnesota’s state and local tax system does not worsen income inequality and ranks 47th on the index. The large income gap between lower- and middle-income taxpayers, as compared to the wealthy, is somewhat narrower after state and local taxes than before. (See Appendix B for state-by-state rankings and the methodology for additional detail on the index.)

Note: Figures show permanent law in Minnesota enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.