Minneapolis restaurant taxes: city sales, downtown and entertainment

Two restaurants in Minneapolis can sell the same plate of walleye and charge a different total, because one sits on one side of a downtown boundary and the other does not. The city layers special taxes on food, drink and entertainment, and the Minnesota Department of Revenue collects them. This guide, checked in November 2026, reads the department's Minneapolis fact sheet, revised in February 2025, and explains which taxes apply to which sales. It is general information, not legal advice. The fact sheet and the department's special local taxes page are the authority, and boundaries and rates can change.

What is the base tax on a Minneapolis restaurant check?

Before any special tax, a Minneapolis restaurant check carries the state general rate of 6.875 percent plus the Hennepin County sales tax of 0.15 percent, the Hennepin County transit sales tax of 0.5 percent, the Metro Area sales tax for housing of 0.25 percent, the Metro Area transportation sales tax of 0.75 percent and the Minneapolis sales tax of 0.5 percent. The fact sheet's table adds them to 9.025 percent for a restaurant with no entertainment. That is the number for a restaurant outside the downtown area and with no live performance.

What is the downtown restaurant tax?

A 3 percent restaurant tax applies to food and beverages sold by restaurants, caterers or places of refreshment in the downtown Minneapolis taxing area. The department's examples include bakeries, bars, coffee shops, delis, diners, drive-ins, hotels, lunch counters, mobile units, snack bars and theater snack bars. It is added to the other taxes, so a downtown restaurant with no entertainment totals 12.025 percent. It does not apply to beverages that are subject to the downtown liquor tax, to drugstores other than the lunch counter, to food and snacks sold by gas stations, cigar stands and grocery stores other than the deli section, or to taxable food sold from vending machines.

Where is the downtown area?

The fact sheet's list of areas included in downtown covers Downtown itself, the Guthrie Theater, Loring Park, Lower Hennepin, Nicollet Island, Riverplace, Seven Corners, St. Anthony Main, Target Field, U.S. Bank Stadium and the warehouse area to Monte Carlo. It lists areas that are not included: Cedar-Riverside, Dinkytown, Franklin-Lyndale, Kenwood, Stadium Village, Stevens Square below I-94 and the Walker Art Center. The Minneapolis Woman's Club at 410 Oak Grove Street is excluded. Because boundaries can be changed by law, check the department's current map and ask the department about your address before you sign a lease.

What is the entertainment tax?

A 3 percent entertainment tax applies citywide to admission fees, the use of amusement devices and games, and food, drinks and merchandise sold in public places during live performances. For a restaurant or bar, the question is whether live entertainment is playing. The department's examples say all food and drink sold during live performances are taxed, including at intermissions, and sales before and after the performance are not. A bar with live musicians from 7 to 11 p.m. three nights a week charges the entertainment tax on all food and drink sold in those hours on those nights. The department also says live entertainment does not include disc jockeys playing recorded music, jukeboxes, karaoke or sporting events.

What do the totals look like?

From the department's table: a restaurant with no entertainment is 9.025 percent, a restaurant with live entertainment is 12.025 percent, a downtown restaurant with no entertainment is 12.025 percent and a downtown restaurant with live entertainment is 15.025 percent. Liquor adds the separate rate in our guide on the 2.5 percent liquor tax. A cover or minimum charge is subject to the entertainment tax too, but the department says the drinks in a bar that only has a jukebox are not.

How do you set up the register?

Create separate tax codes, one for each combination you can sell: regular, entertainment hours and, if you are downtown, the downtown restaurant tax. Schedule the entertainment code to switch on during performance hours so staff do not have to remember. Print the tax lines on the guest check so the totals can be traced. Test a check from a regular lunch and a check during a live set, and compare each to the table.

What about rooms, private events and caterers?

Food and drink served in separate rooms run as separate business operations are not subject to the entertainment tax when the music is in another room. A caterer working in the downtown area charges the downtown restaurant tax. For a banquet room in a hotel, the fact sheet applies the liquor and restaurant taxes to delivery charges, mandatory tips, service charges and any other charges tied to serving food and drink. Ask the department about any mixed arrangement.

What should you do next?

Find your address on the department's current downtown map. Decide whether you will have live performances and on which nights. Then ask your point-of-sale provider to set up the tax codes before opening night.

More guides for your business:

• Minnesota sales tax on restaurant meals: the state and local layers
• Minnesota 2.5 percent liquor tax on bar and restaurant sales
• How to register and file Minnesota sales tax for a restaurant

More in the US guides for food businesses.