Minnesota sales tax on restaurant meals: the state and local layers

A Minnesota restaurant owner usually learns the sales tax rate from the first month of the register's reports, and often from a surprise. The state rate is only one piece. County and metro taxes sit on top of it, some cities add their own, and the state's rate calculator does not show every layer. This guide, checked in November 2026, reads the Minnesota Department of Revenue's eating establishments guide and its Minneapolis fact sheet to explain what is taxable and how the layers stack. It is general information, not legal advice. The Department of Revenue is the authority for every rate.

What does Minnesota tax in a restaurant?

The department says most food and drink sold by an eating establishment is taxable unless a specific exemption applies. Prepared food is taxable if the seller prepares it or provides eating utensils. That covers a plate at your table, a sandwich wrapped to go and a catered tray with forks. The word to remember is most. Groceries sold by a grocery store are treated differently from prepared meals, so an owner who also sells packaged goods should ask the department how each item is classified.

What is the state rate?

The state general rate is 6.875 percent, according to the department. On a $40 check, the state share is $2.75. The state rate is the starting point and the other layers are added to it. The department's guide says a seller charges the state rate and any applicable local taxes, and for a license to sell intoxicating liquor, club or wine, the separate liquor tax described in our guide on the 2.5 percent liquor tax.

How do local taxes work?

Local taxes depend on where the customer receives the product, which the department says is typically your business or a delivery address. The department's Sales Tax Rate Map and Calculator give the combined rate for an address, but the department states that they do not include special local taxes. Special local taxes are separate charges that cities impose on certain kinds of sales, such as restaurants, liquor, entertainment and lodging, and the department lists the ones it administers on its special local taxes page. Add them to the calculator's answer when your location has one.

What does a Minneapolis restaurant check total?

The department's Minneapolis fact sheet, revised in February 2025, gives a table for a restaurant with no entertainment: 6.875 percent state, 0.5 percent Hennepin County transit, 0.15 percent Hennepin County, 0.25 percent Metro Area sales tax for housing, 0.75 percent Metro Area transportation tax and 0.5 percent Minneapolis sales tax, for a total of 9.025 percent. A downtown restaurant adds a 3 percent downtown restaurant tax, and live entertainment adds a further 3 percent entertainment tax in some cases. Our guide on Minneapolis restaurant taxes explains both.

Are tips, delivery and catering charges taxed?

Charges you add are taxed. The department says tips or service charges a seller adds to the bill are taxable, even if the tip amount is given to employees. A tip a customer leaves voluntarily, or adds to a credit card receipt, is not taxable. Delivery charges added to a customer's bill are taxable as part of the sales price, and catering is taxable including charges for delivery, preparation or services. Our guide on automatic gratuity and large parties explains the tip side in detail.

How do you set your register correctly?

Set the combined rate for your exact address, not for the county in general, and check it against the department's calculator. Add any special local tax your location owes as its own line so the report separates it. Test the register with three sample checks: a dine-in meal, a takeout order with a delivery fee and a catering order with a service charge. Compare each result with a hand calculation. If you run more than one location, set each separately.

What should you review each year?

Rates change. Review your combined rate each January and whenever a city or county announces a change, since the department updates its calculator. Keep a dated note of the rate you used and where you found it. If a customer or auditor asks why a check carried a certain tax, the note answers in seconds.

How do you price a menu with tax in mind?

Guests see the menu price first and the tax last, so a rate that looks small in a report can feel large on a check. Price the menu so that the total with tax lands on a number your regulars accept, and decide whether to round prices to the dollar. If you serve both dine-in and takeout, check that the two are taxed the same way, since the department treats both as prepared food. When rates go up, avoid an automatic menu increase that stacks on top of the tax change, and explain it plainly to staff so they can answer guests.

What should you do next?

Look up your address in the department's calculator and write down the answer. Ask the department whether any special local tax applies to your location. Print one test check from your register and compare. Then read how to register and file, because the rate you charge must reach the right return.

More guides for your business:

• Minneapolis restaurant taxes: city sales tax, downtown and entertainment
• How to register and file Minnesota sales tax for a restaurant
• Minnesota automatic gratuity, large parties and sales tax

More in the US guides for food businesses.