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Other State Taxes

Taxes, other than the income and sales taxes, yield over 25% of state tax revenues. Many of these taxes are minor revenue sources. Taxes that yield at least 1% of state tax revenues for fiscal year 2017 are described following the graph.

Graph showing proportion of income, sales, and other tax revenues

Corporate Franchise (Income) Tax

  • 9.8% of federal taxable income after numerous adjustments
  • Multistate corporations apportion income based on the percentage of their total sales that are made to Minnesota purchasers
  • Credit applies to Minnesota research and development expenses
  • Most volatile revenue source of any major state tax

Motor Vehicle Fuels Tax

  • $.25/gallon
  • Variable motor fuels surcharge (set at $.035/gallon for fiscal year 2017) to pay debt services on highway bonds
  • Dedicated by constitution to the highway user trust fund

Statewide Property Tax

  • Raised $862 million in calendar year 2016; adjusted annually for inflation
  • Levied against commercial/industrial and seasonal recreational property only

Motor Vehicle Registration (License) Tax

  • Tax on passenger vehicles is 1.25% of the value, plus a minimum fee of $10 (total tax cannot be less than $35)
  • Value is manufacturer's base value, reduced under a depreciation schedule after the first year
  • Trucks, buses, and other vehicles pay based on weight and age
  • Dedicated by constitution to the highway user trust fund

Cigarette and Tobacco Products Tax

  • $3.04/pack of 20 cigarettes; $22.25 million goes to the Academic Health Center fund, $8.55 million to the medical education and research costs account, and the rest to the general fund
  • Additional fee of $0.50/pack on cigarettes made by companies not part of the legal settlement with the state
  • Tax on tobacco products is 95% of wholesale price; moist snuff is subject to minimum tax of $3.04/container; premium cigars are subject to a maximum tax of $3.50/cigar

MinnesotaCare Tax

  • 2% of gross revenues tax on hospitals, surgical centers, health care providers, and wholesale drug distributors
  • Exemptions for Medicare, home health care services, and federal employee and military benefit programs
  • Revenues pay for MinnesotaCare program
  • Tax expires on January 1, 2020

Insurance Premiums Tax

  • Basic tax is 2% of insurance premiums
  • Mutual property-casualty insurers with 12/31/89 assets of no more than $5 million, 0.5% rate; $1.6 billion, 1.26% rate
  • HMOs and nonprofit health insurance companies (e.g., Blue Cross) are subject to a 1% rate
  • Life insurance rate is 1.5%
  • A "retaliatory tax" applies to non-Minnesota companies with higher home state taxes

Other State Tax Revenue

Other state tax revenues were $6,078 million in fiscal year 2017.

Graph showing other state tax revenues for ten years

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January 2017

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